Exhibit C
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
DEFINITIONS.......................................................2
ARTICLE I - CUSTODY PROVISIONS....................................5
1. Appointment of Custodian....................................5
2. Custody of Cash and Securities..............................5
3. Settlement of Fund Transactions.............................9
4. Lending of Securities.......................................9
5. Persons Having Access to Assets of the Fund.................9
6. Standard of Care; Limit of Custodial Responsibilities......10
7. Appointment of Subcustodians...............................11
8. Overdraft Facility and Security for Payment................12
9. Tax Obligations............................................12
ARTICLE II - FOREIGN CUSTODY MANAGER SERVICES....................14
1. Delegation.................................................14
2. Changes to Appendix B......................................14
3. Reports to Board...........................................14
4. Monitoring System..........................................14
5. Standard of Care...........................................14
6. Use of Securities Depositories.............................15
ARTICLE III - Information Services...............................16
1. Risk Analysis.............................................16
2. Monitoring of Securities Depositories.....................16
3. Use of Agents.............................................16
4. Exercise of Reasonable Care...............................16
5. Liabilities and Warranties................................16
ARTICLE IV - GENERAL PROVISIONS..................................17
1. Compensation...............................................17
2. Insolvency of Foreign Custodians...........................17
3. Liability for Depositories.................................17
4. Damages....................................................17
5. Indemnification; Liability of the Fund.....................17
6. Force Majeure..............................................17
7. Termination................................................18
8. Books and Records..........................................18
9. Miscellaneous.............................................18
APPENDIX A List of Authorized Persons..........................21
APPENDIX B Selected Countries...................................2
APPENDIX C Self Custody Rider...................................2
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of May 21, 2001, and is
between Dreyfus Balanced Fund, Inc., (the "Fund") a corporation
organized under the laws of the State of Maryland having its
principal office and place of business at 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, and MELLON BANK, N.A., (the "Custodian"), a
national banking association with its principal place of business
at Xxx Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Fund and the Custodian desire to set forth their
agreement with respect to the custody of the Fund's Securities
and cash and the processing of Securities transactions;
WHEREAS, the Board desires to delegate certain of its
responsibilities for performing the services set forth in
paragraphs (c)(1), (c)(2) and (c)(3) of Rule 17f-5 to the
Custodian as a Foreign Custody Manager (as defined in Rule
17f-5);
WHEREAS, the Custodian agrees to accept such delegation with
respect to Assets, including those held by Foreign Custodians in
the Selected Countries; and
WHEREAS, the Custodian meets the requirements of a Primary
Custodian and agrees to perform the function of a Primary
Custodian under Rule 17f-7;
NOW THEREFORE, the Fund and the Custodian agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires
otherwise, shall have the following meanings:
1. "ACT": the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to
time.
2. "AGREEMENT": this agreement and any amendments.
3. "ASSETS": any of the Fund's investments, including
foreign currencies and investments for which the
primary market is outside the United States, and such
cash and cash equivalents as are reasonably necessary
to effect the Fund's transactions in such investments.
4. "AUTHORIZED PERSON": any person, whether or not any
such person is an officer or employee of the Fund, duly
authorized by the Board to give Instructions on behalf
of the Fund, who is listed in the Certificate annexed
hereto as APPENDIX A or such other Certificate as may
be received by the Custodian from time to time.
5. "BOARD": the Board of Directors (or the body authorized
to exercise authority similar to that of the board of
directors of a corporation) of the Fund.
6. "BOOK-ENTRY SYSTEM": the Federal Reserve/Treasury
book-entry system for United States and federal agency
Securities, its successor or successors and its nominee
or nominees.
7. "BUSINESS DAY": each day on which the Fund is required
to determine its net asset value, and any other day on
which the Securities and Exchange Commission may
require the Fund to be open for business.
8. "CERTIFICATE": any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is
actually received by the Custodian and signed on behalf
of the Fund by an Authorized Person.
9. "COUNTRY RISK": all factors reasonably related to the
systemic risk of holding assets in a particular country
including, but not limited to, such country's financial
infrastructure (including Securities Depositories),
prevailing or developing custody and settlement
practices and laws applicable to the safekeeping and
recovery of Assets held in custody.
10. "ELIGIBLE SECURITIES DEPOSITORY": the meaning of the
term set forth in Rule 17f-7(b)(1).
11. "FOREIGN CUSTODIAN": (a) a banking institution or trust
company incorporated or organized under the laws of a
country other than the United States, that is regulated
as such by the country's government or an agency of the
country's government; (b) a majority-owned direct or
indirect subsidiary of a U.S. Bank or bank holding
company; or (c) any entity other than a Securities
Depository with respect to which exemptive or no-action
relief has been granted by the Securities and Exchange
Commission to permit it to hold Assets of a registered
investment company. For the avoidance of doubt, the
term "Foreign Custodian" shall not include Euroclear,
Clearstream, or any other transnational system for the
central handling of securities or equivalent
book-entries regardless of whether or not such entities
or their service providers are acting in a custodial
capacity with respect to Assets, Securities or other
property of the Fund.
12. "INSTRUCTIONS": directions and instructions to the
Custodian from an Authorized Person in writing by
facsimile or electronic transmission subject to the
Custodian's practices or any other method specifically
agreed upon, provided that the Custodian may, in its
discretion, accept oral directions and instructions from
an individual it reasonably believes to be an Authorized
Person and may require confirmation in writing.
13. "PRIMARY CUSTODIAN": the meaning set forth in Rule
17f-7(b)(2).
14. "PROSPECTUS": the Fund's current prospectus and
statement of additional information relating to the
registration of the Fund's Shares under the Securities
Act of 1933, as amended.
15. "RISK ANALYSIS": the analysis required under Rule
17f-7(a)(1)(i)(A).
16. "RULES 17F-4, 17F-5 AND 17F-7": such Rules as
promulgated under Section 17(f) of the Act, as such
rules (and any successor rules or regulations) may be
amended from time to time.
17. "SECURITY" or "SECURITIES": bonds, debentures, notes,
stocks, shares, evidences of indebtedness, options,
futures, warrants and other securities, commodities,
interests and investments from time to time owned by the
Fund.
18. "SECURITIES DEPOSITORY": a system for the central
handling of securities as defined in Rule 17f-4.
19. "SELECTED COUNTRIES": the jurisdictions listed on
APPENDIX B as such may be amended from time to time in
accordance with Article II.
20. "SHARES" shares of the Fund, however designated.
21. "TRANSFER AGENT": the person which performs the
transfer agent functions for the Fund.
22. "U.S. BANK": the meaning set forth in Rule 17f-5(a)(7).
ARTICLE I
CUSTODY PROVISIONS
1. APPOINTMENT OF CUSTODIAN. The Board appoints the
Custodian, and the Custodian accepts such appointment, as
custodian of all the Securities and monies at the time owned by
or in the possession of the Fund during the period of this
Agreement.
2. CUSTODY OF CASH AND SECURITIES.
(a) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver
or cause to be delivered to the Custodian all
Securities and monies owned by it at any time during
the period of this Agreement. The Custodian will not
be responsible for such Securities and monies until
actually received. The Custodian shall establish and
maintain a separate account for the Fund and shall
credit to the separate account all Securities and
monies so received. The Board specifically authorizes
the Custodian to hold Securities, Assets or other
property of the Fund with any domestic subcustodian, or
Securities Depository; and Foreign Custodians or
Eligible Securities Depositories in the Selected
Countries as provided in Article II. Securities and
monies of the Fund deposited in a Securities Depository
or Eligible Securities Depositories will be reflected
in an account or accounts which include only assets
held by the Custodian or a Foreign Custodian for its
customers.
(b) DISBURSEMENTS OF CASH AND DELIVERY OF SECURITIES. The
Custodian shall disburse cash or deliver out Securities
only for the purposes listed below. Instructions must
specify or evidence the purpose for which any
transaction is to be made and the Fund shall be solely
responsible to assure that Instructions are in accord
with any limitations or restrictions applicable to the
Fund.
(1) In payment for Securities purchased for the Fund,
upon receipt of such Securities in accord with
market practice;
(2) In payment of dividends or distributions with
respect to Shares;
(3) In payment for Shares which have been redeemed
by the Fund;
(4) In payment of taxes;
(5) When Securities are called, redeemed, retired,
or otherwise become payable;
(6) In exchange for or upon conversion into other
securities alone or other securities and cash
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(7) Upon conversion of Securities pursuant to their terms
into other securities;
(8) Upon exercise of subscription, purchase or other
similar rights represented by Securities;
(9) For the payment of interest, management or supervisory
fees, distributions or operating expenses;
(10) In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable
to the Fund;
(11) In connection with any borrowings by the Fund or short
sales of securities requiring a pledge of Securities,
but only against receipt of amounts borrowed;
(12) In connection with any loans, but only against receipt
of adequate collateral as specified in Instructions
which shall reflect any restrictions applicable to the
Fund;
(13) For the purpose of redeeming Shares of the Fund and
the delivery to, or the crediting to the account of,
the Custodian or the Fund's transfer agent, net
amounts payable with respect to such Shares to be
redeemed;
(14) For the purpose of redeeming in kind Shares of the
Fund against delivery to the Custodian or the Transfer
Agent of such Shares to be so redeemed;
(15) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a
broker-dealer registered under the Securities Exchange
Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered
national securities exchange, or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions by
the Fund. The Custodian will act only in accordance
with Instructions in the delivery of Securities to be
held in escrow and will have no responsibility or
liability for any such Securities which are not
returned promptly when due other than to make proper
requests for such return;
(16) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from
Securities or related transactions;
(17) When Securities are sold by the Fund, upon receipt of
the total amount payable to the Fund therefore, in
accord with market practice;
(18) Upon the termination of this Agreement; and
(19) Pursuant to a Certificate setting forth the name and
address of the person to whom the payment is to be
made, the account from which payment is to be made,
the amount to be paid and the purpose for which
payment is to be made, provided that in the event of
disbursements pursuant to this paragraph 19 of Section
2(b), the Fund shall indemnify and hold the Custodian
harmless from any claims or losses arising out of such
disbursements in reliance on such Certificate.
(c) ACTIONS WHICH MAY BE TAKEN WITHOUT INSTRUCTIONS.
Unless an Instruction to the contrary is received, the
Custodian shall:
(1) Collect all income due or payable, provided that
the Custodian shall not be responsible for the
failure to receive payment of (or late payment of)
distributions or other payments with respect to
Securities or other property held in the account;
(2) Present for payment and collect the amount payable
upon all Securities which may mature or be called,
redeemed, retired or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall
have no responsibility to the Fund for monitoring
or ascertaining any call, redemption or retirement
dates with respect to put bonds or similar
instruments which are owned by the Fund and held by
the Custodian or its nominees where such dates are
not published in sources routinely used by the
Custodian. The Custodian shall have no
responsibility or liability to the Fund for any
loss by the Fund for any missed payments or other
defaults resulting therefrom when information is
not published in sources routinely used by the
Custodian, unless the Custodian received timely
notification from the Fund specifying the time,
place and manner for the presentment of any such
put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not
be responsible and assumes no liability for the
accuracy or completeness of any notification the
Custodian may furnish to the Fund with respect to
put bonds or similar instruments;
(3) Surrender Securities in temporary form for definitive
Securities;
(4) Hold directly, or through a Securities Depository with
respect to Securities therein deposited, for the
account of the Fund all rights and similar Securities
issued with respect to any Securities held by the
Custodian hereunder for the Fund;
(5) Submit or cause to be submitted to Fund or its
investment advisor, as designated by Fund, information
actually received by the Custodian regarding ownership
rights pertaining to property held for the Fund;
(6) Deliver or cause to be delivered any Securities held
for the Fund in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(7) Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to
such Securities entered into by the Fund;
(8) Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable;
provided, however, that in any such case the cash or
other consideration is to be delivered to the
Custodian. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Fund for
monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds or similar
instruments which are owned by the Fund and held by
the Custodian or its nominee where such dates are not
published in sources routinely used by the Custodian.
The Custodian shall have no responsibility or
liability to the Fund for any loss by the Fund for any
missed payment or other default resulting therefrom
when information is not published in sources routinely
used by the Custodian, unless the Custodian received
timely notification from the Fund specifying the time,
place and manner for the presentment of any such put
bond owned by the Fund and held by the Custodian or
its nominee. The Custodian shall not be responsible
and assumes no liability to the Fund for the accuracy
or completeness of any notification the Custodian may
furnish to the Fund with respect to put bonds or
similar investments;
(9) Endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for
the account of the Fund; and
(10) Execute any and all documents, agreements or other
instruments as may be necessary or desirable for the
accomplishment of the purposes of this Agreement.
(d) CONFIRMATION AND STATEMENTS. Promptly after the close
of business on each day, the Custodian shall furnish
the Fund with confirmations and a summary of all
transfers to or from the account of the Fund during the
day. Where securities purchased by the Fund are in a
fungible bulk of securities registered in the name of
the Custodian (or its nominee) or shown in the
Custodian's account on the books of a Securities
Depository, the Custodian shall by book-entry or
otherwise identify the quantity of those securities
belonging to the Fund. At least monthly, the Custodian
shall furnish the Fund with a detailed statement of the
Securities and monies held for the Fund under this
Agreement.
(e) REGISTRATION OF SECURITIES. The Custodian is
authorized to hold all Securities, Assets, or other
property of the Fund in nominee name, in bearer form or
in book-entry form. The Custodian may register any
Securities, Assets or other property of the Fund in the
name of the Fund, in the name of the Custodian, any
domestic subcustodian, or Foreign Custodian, in the
name of any duly appointed registered nominee of such
entity, or in the name of a Securities Depository or
its successor or successors, or its nominee or
nominees. The Fund agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register
in the name of its registered nominee or in the name of
a Securities Depository, any Securities which it may
hold for the account of the Fund and which may from
time to time be registered in the name of the Fund.
(f) SEGREGATED ACCOUNTS. Upon receipt of Instruction, the
Custodian will, from time to time establish segregated
accounts on behalf of the Fund to hold and deal with
specified assets as shall be directed.
3. SETTLEMENT OF FUND TRANSACTIONS.
(a)CUSTOMARY PRACTICES. Settlement of transactions may be
effected in accordance with trading and processing
practices customary in the jurisdiction or market where
the transaction occurs. The Fund acknowledges that this
may, in certain circumstances, require the delivery of
cash or Securities (or other property) without the
concurrent receipt of Securities (or other property) or
cash. In such circumstances, the Custodian shall have
no responsibility for nonreceipt of payments (or late
payment) or nondelivery of Securities or other property
(or late delivery) by the counterparty.
(b)CONTRACTUAL INCOME. Unless the parties agree to the
contrary, the Custodian shall credit the Fund; in
accordance with the Custodian's standard operating
procedure, with income and maturity proceeds on
securities on contractual payment date, net of any
taxes, or upon actual receipt. To the extent the
Custodian credits income on contractual payment date,
the Custodian may reverse such accounting entries with
back value to the contractual payment date if the
Custodian reasonably believes that such amount will not
be received.
(c)CONTRACTUAL SETTLEMENT. Unless the parties agree to the
contrary, the Custodian will attend to the settlement of
securities transactions in accordance with the
Custodian's standard operating procedure, on the basis of
either contractual settlement date accounting or actual
settlement date accounting. To the extent the Custodian
settles certain securities transactions on the basis of
contractual settlement date accounting, the Custodian
may reverse with back value to the contractual
settlement date any entry relating to such contractual
settlement if the Custodian reasonably believes that
such amount will not be received.
4. LENDING OF SECURITIES. The Custodian may lend the assets of
the Fund in accordance with the terms and conditions of a
separate securities lending agreement.
5. PERSONS HAVING ACCESS TO ASSETS OF THE FUND.
(a) No trustee or agent of the Fund, and no officer,
director, employee or agent of the Fund's investment
adviser, of any sub-investment adviser of the Fund, or
of the Fund's administrator, shall have physical access
to the assets of the 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, director, employee or agent of the
Custodian who holds any similar position with the
Fund's investment adviser, with any sub-investment
adviser of the Fund or with the Fund's administrator
shall have access to the assets of the Fund.
(b) Nothing in this Section 5 shall prohibit any duly
authorized officer, employee or agent of the Fund, or
any duly authorized officer, director, employee or
agent of the investment adviser, of any sub-investment
adviser of the Fund or of the Fund's administrator,
from giving Instructions to the Custodian or executing
a Certificate so long as it does not result in delivery
of or access to assets of the Fund prohibited by
paragraph (a) of this Section 5.
6. STANDARD OF CARE; LIMIT OF CUSTODIAL RESPONSIBILITIES.
(a) STANDARD OF CARE. In connection with its duties and
responsibilities under this Article I, the Custodian
shall not be liable for any loss or damage, including
counsel fees, resulting from its action or omission to
act or otherwise, except for any such loss or damage
arising out of the negligence or willful misconduct of
the Custodian, its employees, agents or domestic
subcustodians. The Custodian may, with respect to
questions of law, apply for and obtain the advice and
opinion of counsel to the Fund or of its own counsel,
at the expense of the Fund, and shall be fully
protected with respect to anything reasonably done or
omitted by it in conformity with such advice or opinion.
(b) LIMIT OF DUTIES. Without limiting the generality of
the foregoing, the Custodian shall be under no duty or
obligation to inquire into, and shall not be liable
for:
(1) The acts or omissions of any agent appointed
pursuant to Instructions of the Fund or its
investment advisor including, but not limited to,
any broker-dealer or other entity to hold any
Securities or other property of the Fund as
collateral or otherwise pursuant to any investment
strategy;
(2) The validity of the issue of any Securities
purchased by the Fund, the legality of the
purchase thereof, or the propriety of the amount
paid therefor;
(3) The legality of the sale of any Securities by the
Fund or the propriety of the amount for which the
same are sold;
(4) The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received
therefor;
(5) The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of the Fund;
(7) The legality of any borrowing for temporary or
emergency purposes.
(c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be
liable for, or considered to be the Custodian of, any
money, whether or not represented by any check, draft,
or other instrument for the payment of money, received
by it on behalf of the Fund until the Custodian
actually receives and collects such money, directly or
by the final crediting of the account representing the
Fund's interest in the Book- Entry System or Securities
Depository.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall
not be required to effect collection of any amount due
to the Fund from the Transfer Agent nor be required to
cause payment or distribution by the Transfer Agent of
any amount paid by the Custodian to the Transfer Agent.
(e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall
not be required to take action to effect collection of
any amount, if the Securities upon which such amount is
payable are in default, or if payment is refused after
due demand or presentation, unless and until it shall
be directed to take such action and it shall be assured
to its satisfaction of reimbursement of its related
costs and expenses.
(f) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall
not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held
by it for the Fund are such as may properly be held by
the Fund under the provisions of its governing
instruments or Prospectus.
(g) RELIANCE ON INSTRUCTIONS. The Custodian shall be entitled
------------------------- to rely upon any Certificate,
Instruction, notice or other instrument in writing received
by the Custodian and reasonably believed by the Custodian
to be genuine and to be signed by an Authorized Person of
the Fund. Where the Custodian is issued Instructions
orally, the Fund acknowledges that if written confirmation
is requested, the validity of the transactions or
enforceability of the transactions authorized by the Fund
shall not be affected if such confirmation is not received
or is contrary to oral Instructions given. The Custodian
shall be under no duty to question any direction of an
Authorized Person, to review any property held in the
Fund's account, to make any suggestions with respect to the
investment of the Assets in the Fund's account, or to
evaluate or question the performance of any Authorized
Person. The Custodian shall not be responsible or liable
for any diminution of value of any Securities or other
property held by the Custodian, absent a breach of the
Custodian's duties under this Agreement.
7. APPOINTMENT OF SUBCUSTODIANS. The Custodian is hereby
authorized to appoint one or more domestic subcustodians (which
may be an affiliate of the Custodian) to hold Securities and
monies at any time owned by the Fund. The Custodian is also
hereby authorized when acting pursuant to Instructions to: 1)
place Assets with any Foreign Custodian located in a jurisdiction
which is not a Selected Country and with Euroclear, Clearstream,
or any other transnational depository; and 2) place Assets with a
broker or other agent as subcustodian in connection with futures,
options, short selling or other transactions. When acting
pursuant to such Instructions, the Custodian shall not be liable
for the acts or omissions of any subcustodian so appointed.
8. OVERDRAFT FACILITY AND SECURITY FOR PAYMENT. In the event
that the Custodian receives Instructions to make payments or
transfers of monies on behalf of the Fund for which there would
be, at the close of business on the date of such payment or
transfer, insufficient monies held by the Custodian on behalf of
the Fund, the Custodian may, in its sole discretion, provide an
overdraft (an "Overdraft") to the Fund in an amount sufficient to
allow the completion of such payment or transfer. Any Overdraft
provided hereunder: (a) shall be payable on the next Business
Day, unless otherwise agreed by the Fund and the Custodian; and
(b) shall accrue interest from the date of the Overdraft to the
date of payment in full by the Fund at a rate agreed upon from
time to time, by the Custodian and the Fund or, in the absence of
specific agreement, at such rate as charged to other customers of
Custodian under procedures uniformly applied. The Custodian and
the Fund acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt
delivery in accordance with the terms hereof, to meet
unanticipated or unusual redemptions, to allow the settlement of
foreign exchange contracts or to meet other unanticipated Fund
expenses. The Custodian shall promptly notify the Fund (an
"Overdraft Notice") of any Overdraft. To secure payment of any
Overdraft, the Fund hereby grants to the Custodian a continuing
security interest in and right of setoff against the Securities
and cash in the Fund's account from time to time in the full
amount of such Overdraft. Should the Fund fail to pay promptly
any amounts owed hereunder, the Custodian shall be entitled to
use available cash in the Fund's account and to liquidate
Securities in the account as necessary to meet the Fund's
obligations under the Overdraft. In any such case, and without
limiting the foregoing, the Custodian shall be entitled to take
such other actions(s) or exercise such other options, powers and
rights as the Custodian now or hereafter has as a secured
creditor under the Massachusetts Uniform Commercial Code or any
other applicable law.
9. TAX OBLIGATIONS. For purposes of this Agreement, "Tax
Obligations" shall mean taxes, withholding, certification and
reporting requirements, claims for exemptions or refund,
interest, penalties, additions to tax and other related
expenses. To the extent that the Custodian has received relevant
and necessary information with respect to the Fund's account, the
Custodian shall perform the following services with respect to
Tax Obligations:
a. the Custodian shall file claims for exemptions or refunds
with respect to withheld foreign (non-U.S.) taxes in instances in
which such claims are appropriate;
b. the Custodian shall withhold appropriate amounts, as
required by U.S. tax laws, with respect to amounts received on
behalf of nonresident aliens; and
c. the Custodian shall provide to the Fund or an Authorized
Person such information received by the Custodian which could, in
the Custodian's reasonable belief, assist the Fund or the
Authorized Person in the submission of any reports or returns
with respect to Tax Obligations. The Fund shall inform the
Custodian in writing as to which party or parties shall receive
information from the Custodian.
The Custodian shall provide such other services with respect
to Tax Obligations, including preparation and filing of tax
returns and reports and payment of amounts due (to the extent
funded), as requested by the Fund and agreed to by the Custodian
in writing. The Custodian shall have no independent obligation
to determine the existence of any information with respect to, or
the extent of, any Tax Obligations now or hereafter imposed on
the Fund or its account by any taxing authority. Except as
specifically provided herein or agreed to in writing by the
Custodian, the Custodian shall have no obligations or liability
with respect to Tax Obligations, including, without limitation,
any obligation to file or submit returns or reports with any
taxing authorities.
In making payments to service providers pursuant to
Instructions, the Fund acknowledges that the Custodian is acting
as a paying agent and not as the payor, for tax information
reporting and withholding purposes.
ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. DELEGATION. The Board delegates to the Custodian, and the
Custodian hereby agrees to accept, responsibility as the Fund's
Foreign Custody Manager for selecting, contracting with and
monitoring Foreign Custodians in Selected Countries set forth in
Appendix B (except as noted therein) in accordance with Rule
17f-5(c).
2. CHANGES TO APPENDIX B. Appendix B may be amended from
time to time to add or
delete jurisdictions by written agreement signed by an Authorized
Person of the Fund and the Custodian, but the Custodian reserves
the right to delete jurisdictions upon reasonable notice to the
Fund.
3. REPORTS TO BOARD. Custodian shall provide written reports
notifying the Board of the placement of Assets with a particular
Foreign Custodian. Such reports shall be provided to the Board
quarterly, except as otherwise agreed by the Custodian and the
Fund. The Custodian shall promptly notify the Board, in writing,
of any material change in Fund's foreign custody arrangements.
4. MONITORING SYSTEM. In each case in which the Custodian has
exercised delegated authority to place Assets with a Foreign
Custodian, the Custodian shall monitor the appropriateness of
maintaining the Assets with such Foreign Custodian, and the
performance of the Foreign Custodian under its contract with the
Custodian, in accordance with Rule 17f-5(c)(3). The Custodian
will notify the Fund as soon as possible if an arrangement with a
Foreign Custodian no longer meets the requirements of Rule 17f-5,
so that the Fund may withdraw its Assets in accordance with Rule
17f-5(c)(3)(ii).
5. STANDARD OF CARE; INDEMNITY. In exercising the delegated
authority under this Article of the Agreement, the Custodian
agrees to exercise reasonable care, prudence and diligence such
as a person having responsibility for the safekeeping of the
Assets would exercise in like circumstances. Contracts with
Foreign Custodians shall comply with Rule 17f-5(c)(2), and
provide for reasonable care for Assets based on the standards
applicable to Foreign Custodians in the Selected Country. In
making this determination, the Custodian shall consider the
factors set forth in Rule 17f-5(c)(1). In addition, the Custodian
shall hold the Fund harmless from, and indemnify the Fund
against, any loss, action, claim, demand, expense and proceeding,
including counsel fees, that occurs as a result of the failure of
any Foreign Custodian to exercise reasonable care with respect to
the safekeeping of Securities and monies of the Fund.
Notwithstanding the generality of the foregoing, however, the
Custodian shall not be liable for any losses resulting from
Country Risk.
6. USE OF SECURITIES DEPOSITORIES. In exercising its delegated
authority, Custodian may assume, unless instructed in writing to
the contrary, that the Board or the Fund's investment adviser has
determined, pursuant to Rule 17f-7, to place and maintain foreign
assets with any Securities Depository as to which the Custodian
has provided the Fund with a Risk Analysis.
[BALANCE OF PAGE INTENTIONALLY BLANK]
ARTICLE III
INFORMATION SERVICES
1. RISK ANALYSIS. The Custodian will provide the Fund with a
Risk Analysis with respect to Securities Depositories operating
in the countries listed in Appendix B. If the Custodian is unable
to provide a Risk Analysis with respect to a particular
Securities Depository, it will notify the Fund. If a new
Securities Depository commences operation in one of the Appendix
B countries, the Custodian will provide the Fund with a Risk
Analysis in a reasonably practicable time after such Securities
Depository becomes operational. If a new country is added to
Appendix B, the Custodian will provide the Fund with a Risk
Analysis with respect to each Securities Depository in that
country within a reasonably practicable time after the addition
of the country to Appendix B.
2. MONITORING OF SECURITIES DEPOSITORIES. The Custodian will
monitor, on a continuing basis, the custody risks associated with
maintaining assets with each Securities Depository for which it
has provided the Fund with a Risk Analysis, as required under
Rule 17f-7. The Custodian will promptly notify Fund or its
investment adviser of any material change in these risks, or if
the custody arrangements with a Securities Depository may no
longer meet the requirements of Rule 17f-7.
3. USE OF AGENTS. Subject to its standard of care in Section
4, below, The Custodian may employ agents, including, but not
limited to Foreign Custodians, to perform its responsibilities
under Sections 1 and 2 above.
4. EXERCISE OF REASONABLE CARE. The Custodian will exercise
reasonable care, prudence, and diligence in performing its
responsibilities under this Article III. With respect to the
Risk Analyses provided or monitoring performed by an agent, the
Custodian will exercise reasonable care in the selection of such
agent, and shall be entitled to rely upon information provided by
agents so selected in the performance of its duties and
responsibilities under this Article III, unless the Custodian
knows or should have known such information to be incorrect,
incomplete or misleading.
5. LIABILITIES AND WARRANTIES. While the Custodian will
take reasonable precautions to ensure that information provided
is accurate, the Custodian shall have no liability with respect
to information provided to it by third parties, unless the
Custodian knows or should have known such information to be
incorrect, incomplete or misleading. Except as provided, due to
the nature and source of information, and the necessity of
relying on various information sources, most of which are
external to the Custodian, the Custodian shall have no liability
for direct or indirect use of such information.
ARTICLE IV
GENERAL PROVISIONS
1. COMPENSATION.
(a) The Fund will compensate the Custodian for its services
rendered under this Agreement in accordance with the
fees, including out of pocket disbursements, set forth
in a separate Fee Schedule, which schedule may be
modified by the Custodian upon not less than sixty days
prior written notice to the Fund. The Custodian shall
also be entitled to reimbursement from the Fund for the
amount of any loss, damage, liability or expense
incurred with respect to the Fund, including counsel
fees, for which it shall be entitled to reimbursement
under the provisions of this Agreement.
(b) The Custodian will xxxx the Fund as soon as practicable
after the end of each calendar month. The Fund will
promptly pay to the Custodian the amount of such
billing.
(c) If not paid timely by the Fund, and unless otherwise
reasonably disputed by the Fund, the Custodian may
charge against assets held on behalf of the Fund
compensation and any expenses incurred by the Custodian
in the performance of its duties pursuant to this
Agreement.
2. INSOLVENCY OF FOREIGN CUSTODIANS. The Custodian shall be
responsible for losses or damages suffered by the Fund arising as
a result of the insolvency of a Foreign Custodian only to the
extent that the Custodian failed to comply with the standard of
care set forth in Article II with respect to the selection and
monitoring of such Foreign Custodian.
3. LIABILITY FOR DEPOSITORIES. The Custodian shall not be
responsible for any losses resulting from the deposit or
maintenance of Securities, Assets or other property of the Fund
with a Securities Depository. Nothing in this provision shall
preclude damages for a breach of duties under Article III.
4. DAMAGES. The Custodian shall not be liable for any
indirect, consequential or special damages with respect to its
role as Foreign Custody Manager, Custodian or information vendor,
except as may arise from its bad faith or willful misconduct in
performing its responsibilities hereunder.
5. LIABILITY OF THE FUND. The Fund and the Custodian
agree that the obligations of the Fund under this Agreement shall
not be binding upon any of the Directors, Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or
future, of the Fund individually, but are binding only upon the
assets and property of the Fund.
6. FORCE MAJEURE. The Custodian shall not be liable for any
losses resulting from or caused by events or circumstances beyond
its reasonable control, including, but not limited to, losses
resulting from nationalization, strikes, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or the breakdown, failure or
malfunction of any utilities or telecommunications systems; or
any order or regulation of any banking or securities industry
including changes in market rules and market conditions affecting
the execution or settlement of transactions; or acts of war,
terrorism, insurrection or revolution; or any other similar
event.
7. TERMINATION.
(a) Either party may terminate this Agreement by giving the
other party two hundred seventy (270) days notice in
writing, specifying the date of such termination. In
the event notice is given by the Fund, it shall be
accompanied by a Certificate evidencing the vote of the
Fund's Board to terminate this Agreement.
(b) The Fund shall, on or before a specified termination
date, deliver to the Custodian a Certificate evidencing
the vote of the Board designating a successor
custodian. In the absence of such designation, the
Custodian may designate a successor custodian, which
shall be a person qualified to so act under the Act, or
the Fund. If both the Custodian and the Fund fail to
designate a successor custodian, the Fund shall, upon
the date specified in the notice of termination, and
upon the delivery by the Custodian of all Securities
and monies then owned by the Fund, be deemed to be its
own custodian and the Custodian shall thereby be
relieved of all duties and responsibilities under this
Agreement, other than the duty with respect to
Securities held in the Book-Entry System which cannot
be delivered to the Fund.
(c) Upon termination of the Agreement, the Custodian shall,
upon receipt of a notice of acceptance by the successor
custodian, deliver to the successor all Securities and
monies then held by the Custodian on behalf of the
Fund, after deducting all fees, expenses and other
amounts owed which have not been reasonably disputed.
(d) In the event of a dispute following the termination of
this Agreement, all relevant provisions shall be deemed
to continue to apply to the obligations and liabilities
of the parties with respect thereto.
8. BOOKS AND RECORDS. The books and records pertaining to the
Fund which are in the possession of the Custodian shall be the
property of the Fund. (The Custodian may, however, to the extent
required by law or regulation retain copies of the same if the
Fund requests the return of its books and records.) Such books
and records shall be prepared and maintained as required by the
Act, and other applicable securities laws, rules and
regulations. Such books and records shall be open to inspection
and audit at reasonable times by officers and auditors employed
by the Fund at its own expense and with prior written notice to
the Custodian, and by the appropriate employees of the Securities
and Exchange Commission.
9. MISCELLANEOUS.
(a) APPENDIX A is a Certificate signed by the Secretary of
the Fund setting forth the names and the signatures of
Authorized Persons. The Fund shall furnish a new
Certificate when the list of Authorized Persons is
changed in any way. Until a new certification is
received, the Custodian shall be fully protected in
acting upon Instructions from Authorized Persons as set
forth in the last delivered Certificate.
(b) Any required written notice or other instrument shall
be sufficiently given if addressed to the Custodian or
the Fund as the case may be and delivered to it at its
offices at:
The Custodian:
Boston Safe Deposit and Trust Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
The Fund:
Dreyfus Balanced Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
or at such other place as the parties may from time to
time designate to the other in writing.
(c) This Agreement may not be amended or modified except by
a written agreement executed by both parties.
(d) This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective
successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without
the written consent of the Custodian, or by the
Custodian without the written consent of the Fund
authorized or approved by a vote of the Board,
provided, however, that the Custodian may assign the
Agreement or any function thereof to any corporation or
entity which directly or indirectly is controlled by,
or is under common control with, the Custodian and any
other attempted assignment without written consent
shall be null and void.
(e) Nothing in this Agreement shall give or be construed to
give or confer upon any third party any rights
hereunder.
(f) The Custodian represents that it is a U.S. Bank within
the meaning of paragraph (a)(7) of Rule 17f-5.
(g) The Fund acknowledges and agrees that, except as
expressly set forth in this Agreement, the Fund is
solely responsible to assure that the maintenance of
the Fund's Securities and cash hereunder complies with
applicable laws and regulations, including without
limitation the Act and the rules and regulations
promulgated thereunder and applicable interpretations
thereof or exemptions therefrom. The Fund represents
that it has determined that it is reasonable to rely on
the Custodian to perform the responsibilities delegated
pursuant to this Agreement.
(h) This Agreement shall be construed in accordance with
the laws of The Commonwealth of Pennsylvania.
(i) The captions of the Agreement are included for
convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise
affect their construction or effect.
(j) Each party represents to the other that it has all
necessary power and authority, and has obtained any
consent or approval necessary, to permit it to enter
into and perform this Agreement and that this Agreement
does not violate, give rise to a default or right of
termination under or otherwise conflict with, any
applicable law, regulation, ruling, decree or other
governmental authorization or any contract to which it
is a party or by which any of its assets is bound.
(k) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective representatives duly
authorized as of the day and year first above written.
DREYFUS BALANCED FUND, INC.
By: /S/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary
MELLON BANK, N.A.
By: /S/XXXXXXXXXXX XXXXX
Name: Xxxxxxxxxxx Xxxxx
Title: First Vice President
APPENDIX A
DREYFUS BALANCED FUND, INC.
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN
ACCOUNT FOR PORTFOLIO SECURITIES
TRANSACTIONS
GROUP I
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx
Xxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxxxxxx,
Xxxx XxXxx, Xxxxxx Xxxxxx, Xxxx
Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxxx
Xxxxx, Xxxx Xxxxxxxx and Xxxxxxxxxxx
Xxxxxxxx
GROUP II
Xxxxxxx X. Xxxxxxxx, Xx.
Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxxx XxXxxxxx
Xxxxxx Xxxxx
CASH ACCOUNT
1. Fees payable to Mellon Bank, N.A. or Boston Safe Deposit and
Trust Company pursuant to written agreement with the Fund
for services rendered in its capacity as Custodian or agent
of the Fund, or to Dreyfus Transfer, Inc. in its capacity as
Transfer Agent or agent of the Fund:
Two (2) signatures required, one of which must be
from Group II, except that no individual shall be
authorized to sign more than once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either
Group I or Group II, or both such Groups, except that
no individual shall be authorized to sign more than
once.
3. Other expenses of the Fund, over $5,000:
Two (2) signatures required, one of which must be
from Group II, except that no individual shall be
authorized to sign more than once.
CUSTODIAN ACCOUNT FOR PORTFOLIO SECURITIES TRANSACTIONS
Two (2) signatures required from any of the following:
Xxxx Xxxxx, Xxxxxx Xxx, Xxxx Xxxxxxxx, Xxxx Xxxxxxx and
Xxxxx Xxxxx.
APPENDIX B
SELECTED COUNTRIES
Argentina Luxembourg
Australia Malaysia
Austria Mauritius
Bangladesh Mexico
Belgium Morocco
Bermuda Namibia
Bolivia The Netherlands
Botswana New Zealand
Brazil Norway
Canada Pakistan
Chile Panama
China/Shenzhen Peru
China/Shanghai The Philippines
Colombia Poland
Costa Rica * Portugal
Croatia Romania
Czech Republic Russia*
Denmark Singapore
Ecuador Slovakia
Egypt Slovenia
Estonia* South Africa
Finland Spain
France Sri Lanka
Germany Sweden
Ghana Switzerland
Greece Taiwan
Hong Kong Thailand
Hungary Trinidad*
India Tunisia*
Indonesia Turkey
Ireland United Kingdom
Israel Uruguay
Italy Venezuela
Japan Vietnam
Jordan Zambia
Kenya Zimbabwe
Korea, Republic of
"*Note, Custodian will not act as a Foreign Custody Manager with
respect to assets held in this country. Holding assets and use
of Mellon's usual subcustodian in this country is subject to
Instructions by the Fund and its execution of a separate
letter-agreement pertaining to custody and market risks."
APPENDIX C
SELF CUSTODY RIDER
Notwithstanding any other provisions of this Agreement to the
contrary, the following provisions shall apply to this Agreement
as being subject to Rule 17f-2 under the Act.
1. PHYSICAL SEPARATIONS OF SECURITIES. Except as permitted by
Rule 17f-2 or Rule 17f-4, the Custodian shall hold all
Securities deposited with it physically segregated at all
times from those of any other person.
2. ACCESS TO SECURITIES. Except as otherwise provided by law,
no person shall be authorized or permitted to have access to
the Securities deposited with the Custodian except pursuant
to a Board resolution. Each such resolution shall designate
not more than five persons who shall be either officers or
responsible employees of the Fund and shall provide that
access to such investments shall be had only by two or more
such persons jointly, at least one of whom shall be an
officer; except that access to such investments shall be
permitted (1) to properly authorized officers and employees
of the Custodian and (2) to the Fund's independent public
accountant jointly with any two persons so designated or
with such officer or employee of the Custodian.
3. DEPOSITS AND WITHDRAWALS. Each person when depositing such
securities or similar investments in or withdrawing them
from a Securities Depository or when ordering their
withdrawal and delivery from the safekeeping of the
Custodian, shall comply with the requirements of Rule
17f-2(e).
4. EXAMINATION. The Fund shall comply with the requirements of
Rule 17f-2(f) with regard to examinations by an independent
public accountant.
Acknowledged:
/S/ XXXXXX X. Xxxxxx /s/ Xxxxxxxxxxx Xxxxx
---------------------------------- --------------------------
Dreyfus Balanced Fund, Inc. Mellon Bank, N.A
