Exhibit (j)(1)
XXXXX XXXXX ENHANCED EQUITY INCOME FUND
September 24, 2004
Xxxxx Xxxxx Enhanced Equity Income Fund hereby adopts and agrees to become a
party to the attached Custodian Agreement as amended and extended with Investors
Bank & Trust Company.
XXXXX XXXXX ENHANCED EQUITY
INCOME FUND
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
President, and not Individually
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By:
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Title:
MASTER CUSTODIAN AGREEMENT
between
XXXXX XXXXX GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
1. Definitions..................................................................................... 1-2
2. Employment of Custodian and Property to be held by it........................................... 2-3
3. Duties of the Custodian with Respect to Property of the Fund.................................... 3
A. Safekeeping and Holding of Property......................................................... 3
B. Delivery of Securities...................................................................... 3-6
C. Registration of Securities.................................................................. 6
D. Bank Accounts............................................................................... 6
E. Payments for Shares of the Fund............................................................. 6-7
F. Investment and Availability of Federal Funds................................................ 7
G. Collections................................................................................. 7-8
H. Payment of Fund Moneys...................................................................... 8-9
I. Liability for Payment in Advance of Receipt of Securities Purchased......................... 9
J. Payments for Repurchases of Redemptions of Shares of the Fund............................... 9-10
K. Appointment of Agents by the Custodian...................................................... 10
L. Deposit of Fund Portfolio Securities in Securities Systems.................................. 10-12
M. Deposit of Fund Commercial Paper in an Approved Book-Entry System for Commercial Paper...... 12-13
X. Xxxxxxxxxx Account.......................................................................... 14
O. Ownership Certificates for Tax Purposes..................................................... 14
P. Proxies..................................................................................... 14
Q. Communications Relating to Fund Portfolio Securities........................................ 14
R. Exercise of Rights; Tender Offers.......................................................... 15
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S. Depository Receipts........................................................................ 15
T. Interest Bearing Call or Time Deposits..................................................... 15-16
U. Options, Futures Contracts and Foreign Currency Transactions............................... 16-17
V. Actions Permitted Without Express Authority................................................ 17
W. Advances by the Bank....................................................................... 18
4. Duties of Bank with Respect to Books of Account and Calculations of Net Asset Value............ 18
5. Records and Miscellaneous Duties............................................................... 18-19
6. Opinion of Fund's Independent Public Accountants............................................... 19
7. Compensation and Expenses of Bank.............................................................. 19
8. Responsibility of Bank......................................................................... 19-20
9. Persons Having Access to Assets of the Fund.................................................... 20
10. Effective Period, Termination and Amendment; Successor Custodian............................... 20-21
11. Interpretive and Additional Provisions......................................................... 21
12. Notices........................................................................................ 21
13. Massachusetts Law to Apply..................................................................... 22
14. Adoption of the Agreement by the Fund.......................................................... 22
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MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Xxxxx
Xxxxx Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted
this Agreement. If the Fund is a Massachusetts business trust, it may in the
future establish and designate other separate and distinct series of shares,
each of which may be called a "portfolio"; in such case, the term "Fund" shall
also refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing
general partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", 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 and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", 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 and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic
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 but only if the Custodian has received a certified copy of a vote of
the Board approving such clearing agency as a securities depository for the
Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but only
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Xxxxx Xxxxx
Management to the Custodian through the Xxxxx Xxxxx equity trading system and
the Xxxxx Xxxxx fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote delegating
authority to any person or persons to give a particular class of instructions
specifically requires that the approval of any person, persons or committee
shall first have been obtained before the Custodian may act on instructions of
that class, the Custodian shall be under no obligation to question the right of
the person or persons giving such instructions in so doing. 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. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. Employment of Custodian and Property to be Held by It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
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owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("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 by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
A. Safekeeping and Holding of Property The Custodian shall keep
safely all property of the Fund and on behalf of the Fund
shall from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate
on its books and records for the account of the Fund all
property of the Fund, including all securities, participation
interests and other assets of the Fund (1) physically held by
the Custodian, (2) held by any subcustodian referred to in
Section 2 hereof or by any agent referred to in Paragraph K
hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved
Clearing Agency or in the Federal Book-Entry System or in an
Approved Foreign Securities Depository, each of which from
time to time is referred to herein as a "Securities System",
and (4) held by the Custodian or by any subcustodian referred
to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.
B. Delivery of Securities The Custodian shall release and deliver
securities or participation interests owned by the Fund held
(or deemed to be held) by the Custodian or maintained in a
Securities System account or in an Approved Book-Entry System
for Commercial Paper account only upon receipt of proper
instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or
participation interests for the account of
the Fund, but only against receipt of
payment therefor; if delivery is made in
Boston or New York City, payment therefor
shall be made in accordance with generally
accepted clearing house procedures or by use
of Federal Reserve Wire System procedures;
if delivery is made elsewhere payment
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therefor shall be in accordance with the
then current
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"street delivery" custom or in accordance
with such procedures agreed to in writing
from time to time by the parties hereto; if
the sale is effected through a Securities
System, delivery and payment therefor shall
be made in accordance with the provisions of
Paragraph L hereof; if the sale of
commercial paper is to be effected through
an Approved Book-Entry System for Commercial
Paper, delivery and payment therefor shall
be made in accordance with the provisions of
Paragraph M hereof; if the securities are to
be sold outside the United States, delivery
may be made in accordance with procedures
agreed to in writing from time to time by
the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include
the disposition of a portfolio security (i)
upon the exercise of an option written by
the Fund and (ii) upon the failure by the
Fund to make a successful bid with respect
to a portfolio security, the continued
holding of which is contingent upon the
making of such a bid;
2) Upon the receipt of payment in connection
with any repurchase agreement or reverse
repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with
tender or other similar offers for portfolio
securities of the Fund;
4) To the issuer thereof or its agent when such
securities or participation interests 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 or any
subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for
transfer into the name of the Fund or into
the name of any nominee of the Custodian or
into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or
into the name or nominee name of any
subcustodian employed pursuant to Section 2
hereof; 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
or participation interests are to be
delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
6) To the broker selling the same for
examination in accordance with the "street
delivery" custom; provided that the
Custodian shall adopt such procedures as the
Fund from time to time shall approve to
ensure their prompt return to the Custodian
by the broker in the event the broker elects
not to accept them;
7) For exchange or conversion pursuant to any
plan of merger, consolidation,
recapitalization, reorganization or
readjustment of the securities of the Issuer
of such securities, or pursuant to
provisions for conversion of such
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securities, or pursuant to any deposit
agreement;
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provided that, in any such case, the new
securities and cash, if any, are to be
delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
8) In the case of warrants, rights or similar
securities, the surrender thereof in
connection with 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 or any
subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of
securities made by the Fund (such loans to
be made pursuant to the terms of the Fund's
current registration statement), 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 securities loans for which
collateral is to be credited to the
Custodian's account in the book-entry system
authorized by the U.S. Department of
Treasury, the Custodian will not be held
liable or responsible for the delivery of
securities loaned by the Fund prior to the
receipt of such collateral;
10) For delivery as security in connection with
any borrowings by the Fund requiring a
pledge or hypothecation of assets by the
Fund (if then permitted under circumstances
described in the current registration
statement of the Fund), provided, that the
securities shall be released only upon
payment to the Custodian of the monies
borrowed, except that in cases where
additional collateral is required to secure
a borrowing already made, further securities
may be released for that purpose; upon
receipt of proper instructions, the
Custodian may pay any such loan upon
redelivery to it of the securities pledged
or hypothecated therefor and upon surrender
of the note or notes evidencing the loan;
11) When required for delivery in connection
with any redemption or repurchase of Shares
of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the
provisions of any agreement between the
Custodian (or a subcustodian employed
pursuant to Section 2 hereof) and a
broker-dealer registered under the
Securities Exchange Act of 1934 and, if
necessary, the Fund, relating to compliance
with the rules of The Options Clearing
Corporation or of any registered national
securities exchange, or of any similar
organization or organizations, regarding
deposit or escrow or other arrangements in
connection with options transactions by the
Fund;
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13) For delivery in accordance with the
provisions of any agreement among the Fund,
the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance
with the rules of the Commodity Futures
Trading Commission and/or of any contract
market or commodities exchange or similar
organization, regarding futures margin
account deposits or payments in connection
with futures transactions by the Fund;
14) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board specifying the securities to be
delivered, setting forth the purpose for
which such delivery is to be made, declaring
such purpose to be proper corporate purpose,
and naming the person or persons to whom
delivery of such securities shall be made.
C. Registration of Securities Securities held by the Custodian
(other than bearer securities) for the account of the Fund
shall be registered in the name of the Fund or in the name of
any nominee of the Fund or of any nominee of the Custodian, or
in the name or nominee name of any agent appointed pursuant to
Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the
name or nominee name of The Depository Trust Company or
Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for
Commercial Paper; provided, that securities are held in an
account of the Custodian or of such agent or of such
subcustodian containing only assets of the Fund or only assets
held by the Custodian or such agent or such subcustodian as a
custodian or subcustodian or in a fiduciary capacity for
customers. All certificates for securities accepted by the
Custodian or any such agent or subcustodian on behalf of the
Fund shall be in "street" or other good delivery form or shall
be returned to the selling broker or dealer who shall be
advised of the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only
to draft or order by the Custodian acting in pursuant to the
terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received
by it from or for the account of the 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 the Custodian 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 deposited with each
such bank or trust company shall be approved in writing by two
officers of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to
withdrawal only by the Custodian in that capacity.
E. Payment for Shares of the Fund The Custodian shall make
appropriate arrangements with the Transfer Agent and the
principal underwriter of the Fund to enable the Custodian to
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make certain it promptly receives the cash or other
consideration due to the Fund for
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such new or treasury Shares as may be issued or sold from time
to time by the Fund, in accordance with the governing
documents and offering prospectus and statement of additional
information of the Fund. The Custodian will provide prompt
notification to the Fund of any receipt by it of payments for
Shares of the Fund.
F. Investment and Availability of Federal Funds Upon agreement
between the Fund and the Custodian, the Custodian shall, upon
the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such securities and instruments as
may be set forth in such instructions on the
same day as received all federal funds
received after a time agreed upon between
the Custodian and the Fund; and
2) 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 Fund which are deposited into
the Fund's account.
G. Collections The Custodian shall promptly collect 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
promptly collect 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 agent thereof and
shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in
connection with such prompt collections and, without limiting
the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other
income items requiring presentations;
2) Present for payment all securities which may
mature or be called, redeemed, retired or
otherwise become payable;
3) Endorse and deposit for collection, in the
name of the Fund, checks, drafts or other
negotiable instruments;
4) Credit income from securities maintained in
a Securities System or in an Approved
Book-Entry System for Commercial Paper at
the time funds become available to the
Custodian; in the case of securities
maintained in The Depository Trust Company
funds shall be deemed available to the Fund
not later than the opening of business on
the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably
practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does
not receive any due and unpaid income after it has made demand
for the same, it shall
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immediately so notify the Fund in writing, enclosing copies of
any demand letter, any
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written response thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability
for any nonpayment of such income provided the Custodian meets
the standard of care set forth in Section 8 hereof. The
Custodian shall not be obligated to take legal action for
collection unless and until reasonably indemnified to its
satisfaction.
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal
with the same pursuant to proper instructions relative
thereto.
H. Payment of Fund Moneys Upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of the Fund
in the following cases only:
1) Upon the purchase of securities,
participation interests, options, futures
contracts, forward contracts and options on
futures contracts purchased for the account
of the Fund but only (a) against the receipt
of
(i) such securities registered as
provided in Paragraph C hereof or in
proper form for transfer or
(ii) detailed instructions signed by
an officer of the Fund regarding the
participation interests to be
purchased or
(iii) written confirmation of the
purchase by the Fund of the options,
futures contracts, forward contracts
or options on futures contracts
by the Custodian (or by a subcustodian
employed pursuant to Section 2 hereof or by
a clearing corporation of a national
securities exchange of which the Custodian
is a member or by any bank, banking
institution or trust company doing business
in the United States or abroad which is
qualified under the Investment Company Act
of 1940 to act as a custodian and which has
been designated by the Custodian as its
agent for this purpose or by the agent
specifically designated in such instructions
as representing the purchasers of a new
issue of privately placed securities); (b)
in the case of a purchase effected through a
Securities System, upon receipt of the
securities by the Securities System in
accordance with the conditions set forth in
Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected
through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper
by the Custodian or subcustodian in
accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of
repurchase agreements entered into between
the Fund and another bank or a
broker-dealer, against receipt by the
Custodian of the securities underlying the
repurchase agreement either in certificate
form or through an entry crediting the
Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of
Boston with such securities along with
written evidence of the agreement by the
bank or
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broker-dealer to repurchase such securities
from the Fund; or (e) with respect to
securities purchased outside of the United
States, in accordance with written
procedures agreed to from time to time in
writing by the parties hereto;
2) When required in connection with the
conversion, exchange or surrender of
securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or
repurchase of Shares of the Fund in
accordance with the provisions of Paragraph
J 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: advisory fees,
distribution plan payments, interest, taxes,
management compensation and expenses,
accounting, transfer agent and legal fees,
and other 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 or other
distributions to holders of Shares declared
or authorized by the Board; and
6) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board, 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 corporate purpose,
and naming the person or persons to whom
such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities
Purchased 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 signed by two
officers of the Fund to so pay in 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; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of (i) the
securities in certificate form subject to such repurchase
agreement or (ii) written evidence that the securities subject
to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston
or (iii) the safekeeping receipt, provided that such
securities have in fact been so transfered by book-entry and
the written repurchase agreement is received by the Custodian
in due course; and except that if the securities are to be
purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to
time by the parties hereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund
From such funds as may be available for the purpose, but
subject to any applicable votes of the Board and the
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current redemption and repurchase procedures of the Fund, the
Custodian shall, upon receipt of written instructions from the
Fund or from the Fund's transfer agent or from the principal
underwriter, make funds and/or portfolio securities available
for payment to holders of Shares who have caused their Shares
to be redeemed or repurchased by the Fund or for the Fund's
account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon
which special checks may be drawn by shareholders of the Fund
holding Shares for which certificates have not been issued.
Such checking account and such special checks shall be subject
to such rules and regulations as the Custodian and the Fund
may from time to time adopt. The Custodian or the Fund may
suspend or terminate use of such checking account or such
special checks (either generally or for one or more
shareholders) at any time. The Custodian and the Fund shall
notify the other immediately of any such suspension or
termination.
K. Appointment of Agents by the Custodian The Custodian may at
any time or times in its discretion appoint (and may at any
time remove) any other bank or trust company (provided such
bank or trust company is itself qualified under the Investment
Company Act of 1940 to act as a custodian or is itself an
eligible foreign custodian within the meaning of Rule 17f-5
under said Act) as the agent of the Custodian to carry out
such of the duties and functions of the Custodian described in
this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent
shall not relieve the Custodian of any of its responsibilities
or liabilities hereunder, and as between the Fund and the
Custodian the Custodian shall be fully responsible for the
acts and omissions of any such agent. For the purposes of this
Agreement, any property of the Fund held by any such agent
shall be deemed to be held by the Custodian hereunder.
L. Deposit of Fund Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the
Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2 keep
securities of the Fund in a Securities System provided that
such securities are maintained in a non-proprietary account
("Account") of
-14-
the Custodian or such subcustodian in the Securities System
which shall not include any assets of the Custodian or such
subcustodian or any other person other than assets held by the
Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund, and the Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings
maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased
in book-entry form for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
such securities have been transferred to the Account, and (ii)
the making of any entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account
of the Fund only upon (i) receipt of notice or 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 notices or
advices from the Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be promptly
provided to the Fund at its request. The Custodian shall
promptly send to the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice
or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to the Securities System's accounting
system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities
System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating
to the Fund's participation in each Securities System will at
all times during regular business hours be open to the
inspection of the Fund's authorized officers, employees or
agents.
(e) The Custodian shall not act under this Paragraph
L in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Securities System; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has
annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
-15-
(f) Anything to the contrary in this Agreement
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
subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the
Securities System or any other person; 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.
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper Upon receipt of proper
instructions with respect to each issue of direct issue
commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by
the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the
following provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry System
for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of
an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such
paper is maintained in a non-proprietary account ("Account")
of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include
any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to
commercial paper of the Fund which is maintained in an
Approved Book-Entry System for Commercial Paper shall identify
by book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the
Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately
and currently stating the Fund's holdings of commercial paper
maintained in each such System.
(c) The Custodian shall pay for commercial paper
purchased in book-entry form for the account of the Fund only
upon contemporaneous (i) receipt of notice or advice from the
issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such purchase, payment and
transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund
only upon contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of
-16-
the Custodian to reflect such transfer or redemption and payment
-17-
for the account of the Fund. Copies of all notices, advices
and confirmations of transfers of commercial paper for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to each System's accounting system, system
of internal accounting controls or procedures for safeguarding
commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication
relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in any
Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph
M in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the Custodian
shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for
Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such System
as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved
Book-Entry System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund or in
the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper
by book-entry.
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of any
Approved Book-Entry System for Commercial Paper by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it
may have against the System, the issuer of the commercial
paper or any other person; 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 System, the
issuer of the commercial paper 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.
-18-
N. 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 Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and any
registered broker-dealer (or any futures commission merchant),
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of the Commodity Futures Trading Commission or of any
contract market or commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or
written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes 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
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to proper instructions, a certificate signed
by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.
O. 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 securities of the
Fund held by it and in connection with transfers of
securities.
P. Proxies The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly delivered to the
Fund all forms of proxies and all notices of meetings and any
other notices or announcements or other written information
affecting or relating to the securities, and upon receipt of
proper instructions shall execute and deliver or cause its
nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute
any proxy to vote thereon or give any consent or take any
other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
Q. Communications Relating to Fund Portfolio Securities The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call
and maturities of securities and participation interests 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 and other persons
relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange offers,
the Custodian shall deliver promptly to the Fund all written
information received by the Custodian from issuers and other
persons relating to the securities and participation interests
whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
-19-
R. Exercise of Rights; Tender Offers In the case of tender
offers, similar offers to purchase or exercise rights
(including, without limitation, pendency of calls and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and
participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for
promptly notifying the Fund of all such offers in accordance
with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall
have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of
proper instructions, the Custodian shall timely deliver to the
issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, rights or similar securities for the
purpose of being exercised or sold upon proper receipt
therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired
by such action are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely
deposit securities upon invitations for tenders of securities
upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the consideration to be
paid or delivered or the tendered securities are to be
returned to the Custodian or subcustodian employed pursuant to
Section 2 hereof. Notwithstanding any provision of this
Agreement to the contrary, the Custodian shall take all
necessary action, unless otherwise directed to the contrary by
proper instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or
similar rights of security ownership, and shall thereafter
promptly notify the Fund in writing of such action.
S. Depository Receipts The Custodian shall, upon receipt of
proper instructions, surrender or cause to be surrendered
foreign securities to the depository used by an issuer of
American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs") for
such securities, against a written receipt therefor adequately
describing such securities and written evidence satisfactory
to the Custodian that the depository has acknowledged receipt
of instructions to issue with respect to such securities ADRs
in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section
2 hereof, for delivery to the Custodian or such subcustodian
at such place as the Custodian or such subcustodian may from
time to time designate. The Custodian shall, upon receipt of
proper instructions, surrender ADRs to the issuer thereof
against a written receipt therefor adequately describing the
ADRs surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged receipt
of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian or to a
subcustodian employed pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall,
upon receipt of proper instructions, place interest bearing
fixed term and call deposits with the banking department of
such banking institution (other than the Custodian) and in
such amounts as the Fund may designate. Deposits may be
denominated in U.S. Dollars or other currencies. The Custodian
shall include in its records with respect to the assets of the
Fund appropriate notation as to the amount and currency of
each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of
-20-
advice or receipt evidencing the deposit, if any, as may be
forwarded to the Custodian by the banking institution. Such
deposits shall be deemed portfolio securities of the
applicable Fund for the purposes of this Agreement, and the
Custodian shall be responsible for the collection of income
from such accounts and the transmission of cash to and from
such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of
proper instructions and in accordance with the
provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, the
Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered
national securities exchange or similar organization
or organizations, receive and retain confirmations or
other documents, if any, evidencing the purchase or
writing of an option on a security or securities
index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account
for each Fund separately, either physically or by
book-entry in a Securities System, securities subject
to a covered call option written by the Fund; and
release and/or transfer such securities or other
assets only in accordance with a notice or other
communication evidencing the expiration, termination
or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or
options exchange on which such covered option is
traded or such other organization as may be
responsible for handling such options transactions.
The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in
each Fund's segregated account in compliance with
applicable margin maintenance requirements.
2. Futures Contracts The Custodian shall, upon
receipt of proper instructions, receive and retain
confirmations and other documents, if any, evidencing
the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and
maintain in a segregated account, for the benefit of
any futures commission merchant, assets designated by
the Fund as initial, maintenance or variation
"margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its
obligations under any futures contracts purchased or
sold or any options on futures contracts written by
Fund, in accordance with the provisions of any
agreement or agreements among the Fund, the Custodian
and such futures commission merchant, designed to
comply with the rules of the Commodity Futures
Trading Commission and/or of any contract market or
commodities exchange or similar organization
regarding such margin deposits or payments; and
release and/or transfer assets in such margin
accounts only in accordance with any such agreements
or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance
with the applicable margin maintenance and
mark-to-market payment requirements.
-21-
3. Foreign Exchange Transactions The Custodian shall,
pursuant to proper instructions, enter into or cause
a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be
portfolio securities of the Fund; and accordingly,
the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's
responsibility in respect of other portfolio
securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of
cash from the currency broker or banking or financial
institution with which the contract or option is
made, the maintenance of proper records with respect
to the transaction and the maintenance of any
segregated account required in connection with the
transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or
banking or financial institutions with which the Fund
deals or for their failure to comply with the terms
of any contract or option. Without limiting the
foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available
to the Custodian for the purpose, the Custodian may
(if determined necessary by the Custodian to
consummate a particular transaction on behalf and for
the account of the Fund) make free outgoing payments
of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign
exchange contract or confirmation that the
countervalue currency completing the foreign exchange
contact has been delivered or received. The Custodian
shall not be responsible for any costs and interest
charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of
third parties to deliver foreign exchange; provided
that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to
the Fund in accordance with, the provisions of
Section 8.
V. 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 Agreement, provided, that all such
payments shall be accounted for by the
Custodian to the Treasurer of 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 nondiscretionary
details in connection with the sale,
exchange, substitution, purchase, transfer
and other dealings with the securities and
property of the Fund except as otherwise
directed by the Fund.
-22-
W. Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment
permitted by this Agreement upon receipt of any proper
authorization required by this Agreement for such payments by
the Fund. Should such a payment or payments, with advanced
funds, result in an overdraft (due to insufficiencies of the
Fund's account with the Bank, or for any other reason) this
Agreement deems any such overdraft or related indebtedness a
loan made by the Bank to the Fund payable on demand. Such
overdraft shall bear interest at the current rate charged by
the Bank for such secured loans unless the Fund shall provide
the Bank with agreed upon compensating balances. The Fund
agrees that the Bank shall have a continuing lien and security
interest to the extent of any overdraft or indebtedness or the
extent required by law, whichever is greater, in and to any
property at any time held by it for the Fund's benefit or in
which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any
third party acting on the Bank's behalf). The Fund authorizes
the Bank, in the Bank's sole discretion, at any time to charge
any overdraft or indebtedness, together with interest due
thereon, against any balance of account standing to the credit
of the Fund on the Bank's books.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement 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,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the
-23-
performance of its duties under this Agreement shall be the property of the
Fund, shall at all times during the regular business hours of the Bank be open
for inspection by authorized officers, employees or agents of the Fund, and in
the event of termination of this Agreement shall be delivered to the Fund or to
such other person or persons as shall be designated by the Fund. Disposition of
any account or record after any required period of preservation shall be only in
accordance with specific instructions received from the Fund. The Bank shall
assist generally in the preparation of reports to shareholders, to the
Securities and Exchange Commission, including Forms N-SAR and N-1Q, to state
"blue sky" authorities and to others, audits of accounts, and other ministerial
matters of like nature; and, upon request, shall furnish the Fund's auditors
with an attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent 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.
The Bank as Custodian and Agent 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.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to
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act. Notwithstanding the foregoing, nothing contained in this paragraph is
intended to nor shall it be construed to modify the standards of care and
responsibility set forth in Section 2 hereof with respect to subcustodians and
in subparagraph f of Paragraph L of Section 3 hereof with respect to Securities
Systems and in subparagraph g of Paragraph M of Section 3 hereof with respect to
an Approved Book-Entry System for Commercial Paper.
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
subcustodians generally in Section 2 hereof, provided that, 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, 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 of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank 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.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated by either party after August
31, 2000 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, that the Fund may at any
time by action of its Board, (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian in the event
the Custodian assigns this Agreement to another party without consent of the
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noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts 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 Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of
the parties hereto. If a majority of the non-interested trustees of any of the
Funds determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of shareholders of any Fund or Funds or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.
The Board of the Fund shall, forthwith, upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian, a bank or
trust company having the qualifications required by the Investment Company Act
of 1940 and the Rules thereunder. The Bank, as Custodian, Agent or otherwise,
shall, upon termination of the Agreement, deliver to such successor custodian,
all securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by 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 governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
shall be
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deemed to have been properly delivered or given hereunder to the respective
addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
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