MASTER CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and entered into as
of February 16, 1996, by and between each Investment Company listed on
Exhibit A, for itself and for each of its Series listed on Exhibit A, and
BANK OF NEW YORK, a New York corporation authorized to do a banking business
(the "Custodian").
RECITALS
A. Each Investment Company is an investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act") that invests and reinvests, for itself or on behalf of its Series, in
Domestic Securities and Foreign Securities.
B. The Custodian is, and has represented to each Investment
Company that the Custodian is, a "bank" as that term is defined in Section
2(a)(5) of the Investment Company Act of 1940, as amended, and is eligible to
receive and maintain custody of investment company assets pursuant to Section
17(f) and Rule 17f-2 thereunder.
C. The Custodian and each Investment Company, for itself and for
each of its Series, desire to provide for the retention of the Custodian as a
custodian of the assets of each Investment Company and each Series, on the
terms and subject to the provisions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1.0 FORM OF AGREEMENT
Although the parties have executed this Agreement in the form of
a Master Custody Agreement for administrative convenience, this Agreement
shall create a separate custody agreement for each Investment Company and for
each Series designated on Exhibit A, as though each Investment Company had
separately executed an identical custody agreement for itself and for each of
its Series. No rights, responsibilities or liabilities of any Investment
Company or Series shall be attributed to any other Investment Company or
Series.
Section 1.1 DEFINITIONS
For purposes of this Agreement, the following terms shall have
the respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board" shall mean the Board of Trustees, Directors or Managing
General Partners, as applicable, of an Investment Company.
"Business Day" with respect to any Domestic Security means any
day, other than a Saturday or Sunday, that is not a day on which banking
institutions are authorized or required by law to be closed in The City of
New York and, with respect to Foreign Securities, a London Business Day.
"London Business Day" shall mean any day on which dealings and deposits in
U.S. dollars are transacted in the London interbank market.
"Custodian" shall mean Bank of New York.
"Domestic Securities" shall have the meaning provided in
Subsection 2.1 hereof.
"Executive Committee" shall mean the executive committee of a
Board.
"Foreign Custodian" shall have the meaning provided in Section
4.1 hereof.
"Foreign Securities" shall have the meaning provided in Section
2.1 hereof.
"Foreign Securities Depository" shall have the meaning provided
in Section 4.1 hereof.
"Fund" shall mean an entity identified on Exhibit A as an
Investment Company, if the Investment Company has no series, or a Series.
"Investment Company" shall mean an entity identified on Exhibit A
under the heading "Investment Company."
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
"Securities" shall have the meaning provided in Section 2.1
hereof.
"Securities System" shall have the meaning provided in Section
3.1 hereof.
"Securities System Account" shall have the meaning provided in
Subsection 3.8(a) hereof.
"Series" shall mean a series of an Investment Company which is
identified as such on Exhibit A.
"Shares" shall mean shares of beneficial interest of the
Investment Company.
"Subcustodian" shall have the meaning provided in Subsection 3.7
hereof, but shall not include any Foreign Custodian.
"Transfer Agent" shall mean the duly appointed and acting
transfer agent for each Investment Company.
"Writing" shall mean a communication in writing, a communication
by telex, facsimile transmission, bankwire or other teleprocess or electronic
instruction system acceptable to the Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 APPOINTMENT OF CUSTODIAN. Each Investment Company hereby
appoints and designates the Custodian as a custodian of the assets of each
Fund, including cash denominated in U.S. dollars or foreign currency
("cash"), securities the Fund desires to be held within the United States
("Domestic Securities") and securities it desires to be held outside the
United States ("Foreign Securities"). Domestic Securities and Foreign
Securities are sometimes referred to herein, collectively, as "Securities."
The Custodian hereby accepts such appointment and designation and agrees that
it shall maintain custody of the assets of each Fund delivered to it
hereunder in the manner provided for herein.
2.2 DELIVERY OF ASSETS. Each Investment Company may deliver to
the Custodian Securities and cash owned by the Funds, payments of income,
principal or capital distributions received by the Funds with respect to
Securities owned by the Funds from time to time, and the consideration
received by the Funds for such Shares or other securities of the Funds as may
be issued and sold from time to time. The Custodian shall have no
responsibility whatsoever for any property or assets of the Funds held or
received by the Funds and not delivered to the Custodian pursuant to and in
accordance with the terms hereof. All Securities accepted by the Custodian
on behalf of the Funds under the terms of this Agreement shall be in "street
name" or other good delivery form as determined by the Custodian.
2.3 SUBCUSTODIANS. The Custodian may appoint BNY Western Trust
Company as a Subcustodian to hold assets of the Funds in accordance with the
provisions of this Agreement. In addition, upon receipt of Proper
Instructions and a certified copy of a resolution of the Board or of the
Executive Committee, and certified by the Secretary or an Assistant
Secretary, of an Investment Company, the Custodian may from time to time
appoint one or more other Subcustodians or Foreign Custodians to hold assets
of the affected Funds in accordance with the provisions of this Agreement.
2.4 NO DUTY TO MANAGE. The Custodian, a Subcustodian or a
Foreign Custodian shall not have any duty or responsibility to manage or
recommend investments of the assets of any Fund held by them or to initiate
any purchase, sale or other investment transaction in the absence of Proper
Instructions or except as otherwise specifically provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO ASSETS OF THE FUNDS HELD
BY THE CUSTODIAN
3.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate from any property owned by the Custodian, for the account of each
Fund, all non-cash property delivered by each Fund to the Custodian hereunder
other than Securities which, pursuant to Subsection 3.8 hereof, are held
through a registered clearing agency, a registered securities depository, the
Federal Reserve's book-entry securities system (referred to herein,
individually, as a "Securities System"), or held by a Subcustodian, Foreign
Custodian or in a Foreign Securities Depository.
3.2 DELIVERY OF SECURITIES. Except as otherwise provided
in Subsection 3.5 hereof, the Custodian, upon receipt of Proper Instructions,
shall release and deliver Securities owned by a Fund and held by the
Custodian in the following cases or as otherwise directed in Proper
Instructions:
(a) except as otherwise provided herein, upon sale of such
Securities for the account of the Fund and receipt by the Custodian, a
Subcustodian or a Foreign Custodian of payment therefor;
(b) upon the receipt of payment by the Custodian, a
Subcustodian or a Foreign Custodian in connection with any repurchase
agreement related to such Securities entered into by the Fund;
(c) in the case of a sale effected through a Securities
System, in accordance with the provisions of Subsection 3.8 hereof;
(d) to a tender agent or other authorized agent in
connection with (i) a tender or other similar offer for Securities owned by
the Fund, or (ii) a tender offer or repurchase by the Fund of its own Shares;
(e) to the issuer thereof or its agent when such
Securities are called, redeemed, retired or otherwise become payable;
provided, that in any such case, the cash or other consideration is to be
delivered to the Custodian, a Subcustodian or a Foreign Custodian;
(f) to the issuer thereof, or its agent, for transfer into
the name or nominee name of the Fund, the name or nominee name of the
Custodian, the name or nominee name of any Subcustodian or Foreign Custodian;
or for exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of units;
provided that, in any such case, the new Securities are to be delivered to
the Custodian, a Subcustodian or Foreign Custodian;
(g) to the broker selling the same for examination in
accordance with the "street delivery" custom;
(h) for exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, or reorganization of the issuer of
such Securities, or pursuant to a conversion of such Securities; provided
that, in any such case, the new Securities and cash, if any, are to be
delivered to the Custodian or a Subcustodian;
(i) 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, a subcustodian or a Foreign Custodian;
(j) for delivery in connection with any loans of
Securities made by the Fund, but only against receipt by the Custodian, a
Subcustodian or a Foreign Custodian of adequate collateral as determined by
the Fund (and identified in Proper Instructions communicated to the
Custodian), which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited to the
account of the Custodian, a Subcustodian or a Foreign Custodian in the
Federal Reserve's book-entry securities system, the Custodian will not be
held liable or responsible for the delivery of Securities owned by the Fund
prior to the receipt of such collateral;
(k) for delivery as security in connection with any
borrowings by the Fund requiring a pledge of assets by the Fund, but only
against receipt by the Custodian, a Subcustodian or a Foreign Custodian of
amounts borrowed;
(l) for delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, a Subcustodian or a Foreign
Custodian and a broker-dealer relating to compliance with the rules of
registered clearing corporations 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;
(m) for delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, a Subcustodian or a Foreign
Custodian and a futures commission merchant, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any contract market,
or any similar organization or organizations, regarding account deposits in
connection with transactions by the Fund;
(n) upon the receipt of instructions from the Transfer
Agent for delivery to the Transfer Agent or to the holders of Shares in
connection with distributions in kind in satisfaction of requests by holders
of Shares for repurchase or redemption; and
(o) for any other proper purpose, but only upon receipt of
Proper Instructions, and a certified copy of a resolution of the Board or of
the Executive Committee certified by the Secretary or an Assistant Secretary
of the Fund, specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom delivery of such
securities shall be made.
3.3 REGISTRATION OF SECURITIES. Securities held by the
Custodian, a Subcustodian or a Foreign Custodian (other than bearer
Securities) shall be registered in the name or nominee name of the
appropriate Fund, in the name or nominee name of the Custodian or in the name
or nominee name of any Subcustodian or Foreign Custodian. Each Fund agrees
to hold the Custodian, any such nominee, Subcustodian or Foreign Custodian
harmless from any liability as a holder of record of such Securities.
3.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts for each Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof, all
cash received by it hereunder from or for the account of each Fund, other
than cash maintained by a Fund in a bank account established and used in
accordance with Rule 17f-3 under the Fund Act. Funds held by the Custodian
for a Fund may be deposited by it to its credit as Custodian in the banking
departments of the Custodian, a Subcustodian or a Foreign Custodian. Such
funds shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity. In the event a
Fund's account for any reason becomes overdrawn, or in the event an action
requested in Proper Instructions would cause such an account to become
overdrawn, the Custodian shall immediately notify the affected Fund.
3.5 COLLECTION OF INCOME; TRADE SETTLEMENT; CREDITING OF
Accounts. The Custodian shall collect income payable with respect to
Securities owned by each Fund, settle Securities trades for the account of
each Fund and credit and debit each Fund's account with the Custodian in
connection therewith as stated in this Subsection 3.5. This Subsection shall
not apply to repurchase agreements, which are treated in Subsection 3.2(b),
above.
(a) Upon receipt of Proper Instructions, the Custodian
shall effect the purchase of a Security by charging the account of the Fund
on the contractual settlement date, and by making payment against delivery.
If the seller or selling broker fails to deliver the Security within a
reasonable period of time, the Custodian shall notify the Fund and credit the
transaction amount to the account of the Fund, but the Custodian shall have
no further liability or responsibility for the transaction.
(b) Upon receipt of Proper Instructions, the Custodian
shall effect the sale of a Security by withdrawing a certificate or other
indicia of ownership from the account of the Fund and by making delivery
against payment, and shall credit the account of the Fund with the amount of
such proceeds on the contractual settlement date. If the purchaser or the
purchasing broker fails to make payment within a reasonable period of time,
the Custodian shall notify the Fund, debit the Fund's account for any amounts
previously credited to it by the Custodian as proceeds of the transaction
and, if delivery has not been made, redeposit the Security into the account
of the Fund.
(c) The Fund is responsible for ensuring that the
Custodian receives timely and accurate Proper Instructions to enable the
Custodian to effect settlement of any purchase or sale. If the Custodian
does not receive such instructions within the required time period, the
Custodian shall have no liability of any kind to any person, including the
Fund, for failing to effect settlement on the contractual settlement date.
However, the Custodian shall use its best reasonable efforts to effect
settlement as soon as possible after receipt of Proper Instructions.
(d) The Custodian shall credit the account of the Fund
with interest income payable on interest bearing Securities on payable date.
Dividends and other amounts payable with respect to Domestic Securities and
Foreign Securities shall be credited to the account of the Fund when received
by the Custodian. The Custodian shall not be required to commence suit or
collection proceedings or resort to any extraordinary means to collect such
income and other amounts payable with respect to Securities owned by the
Fund. The collection of income due the Fund on Domestic Securities loaned
pursuant to the provisions of Subsection 3.2(j) shall be the responsibility
of the Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data as
may be necessary to assist the Fund in arranging for the timely delivery to
the Custodian of the income to which the Fund is entitled. The Custodian
shall have no liability to any person, including the Fund, if the Custodian
credits the account of the Fund with such income or other amounts payable
with respect to Securities owned by the Fund (other than Securities loaned by
the Fund pursuant to Subsection 3.2(j) hereof) and the Custodian subsequently
is unable to collect such income or other amounts from the payors thereof
within a reasonable time period, as determined by the Custodian in its sole
discretion. In such event, the Custodian shall be entitled to reimbursement
of the amount so credited to the account of the Fund.
3.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions
the Custodian shall pay out monies of a Fund in the following cases or as
otherwise directed in Proper Instructions:
(a) upon the purchase of Securities, futures contracts or
options on futures contracts for the account of the Fund but only, except as
otherwise provided herein, (i) against the delivery of such securities, or
evidence of title to futures contracts or options on futures contracts, to
the Custodian or a Subcustodian registered pursuant to Subsection 3.3 hereof
or in proper form for transfer; (ii) in the case of a purchase effected
through a Securities System, in accordance with the conditions set forth in
Subsection 3.8 hereof; or (iii) in the case of repurchase agreements entered
into between the Fund and the Custodian, another bank or a broker-dealer (A)
against delivery of the Securities either in certificated form to the
Custodian or a Subcustodian or through an entry crediting the Custodian's
account at the appropriate Federal Reserve Bank with such Securities or (B)
against delivery of the confirmation evidencing purchase by the Fund of
Securities owned by the Custodian or such broker-dealer or other bank along
with written evidence of the agreement by the Custodian or such broker-dealer
or other bank to repurchase such Securities from the Fund;
(b) in connection with conversion, exchange or surrender
of Securities owned by the Fund as set forth in Subsection 3.2 hereof;
(c) for the redemption or repurchase of Shares issued by
the Fund;
(d) 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: custodian fees, interest, taxes, management, accounting,
transfer agent and legal fees and operating expenses of the Fund whether or
not such expenses are to be in whole or part capitalized or treated as
deferred expenses; and
(e) for the payment of any dividends or distributions
declared by the Board with respect to the Shares.
3.7 APPOINTMENT OF SUBCUSTODIANS. The Custodian may appoint BNY
Western Trust Company or, upon receipt of Proper Instructions, another bank
or trust company, which is itself qualified under the Investment Company Act
to act as a custodian (a "Subcustodian"), as the agent of the Custodian to
carry out such of the duties of the Custodian hereunder as a Custodian may
from time to time direct; provided, however, that the appointment of any
Subcustodian shall not relieve the Custodian of its responsibilities or
liabilities hereunder.
3.8 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. The Custodian
may deposit and/or maintain Domestic Securities owned by a Fund in a
Securities System in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject
to the following provisions:
(a) the Custodian may hold Domestic Securities of the Fund
in the Depository Trust Company or the Federal Reserve's book entry system
or, upon receipt of Proper Instructions, in another Securities System
provided that such securities are held in an account of the Custodian in the
Securities System ("Securities System Account") which shall not include any
assets of the Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
(b) the records of the Custodian with respect to Domestic
Securities of the Fund which are maintained in a Securities System shall
identify by book-entry those Domestic Securities belonging to the Fund;
(c) the Custodian shall pay for Domestic Securities
purchased for the account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to the
Securities System Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer Domestic Securities sold for the account
of the Fund upon (A) receipt of advice from the Securities System that
payment for such securities has been transferred to the Securities System
Account, and (B) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund. Copies of all
advices from the Securities System of transfers of Domestic Securities for
the account of the Fund shall be maintained for the Fund by the Custodian
and be provided to the Fund at its request. Upon request, the Custodian
shall furnish the Fund confirmation of the transfer to or from the account of
the Fund in the form of a written advice or notice; and
(d) upon request, the Custodian shall provide the Fund
with any report obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding domestic securities deposited in the Securities System.
3.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated account or accounts
for and on behalf of a Fund, into which account or accounts may be
transferred cash and/or Securities, including Securities maintained in an
account by the Custodian pursuant to Section 3.8 hereof, (i) in accordance
with the provisions of any agreement among the Fund, the Custodian and a
broker-dealer or futures commission merchant, relating to compliance with the
rules of registered clearing corporations and of any national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity futures contracts
or options thereon purchased or sold by the Fund, and (iii) for other proper
corporate purposes, but only, in the case of this clause (iii), upon receipt
of, in addition to Proper Instructions, a certified copy of a resolution of
the Board or of the Executive Committee certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
3.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Fund held by it and in connection
with transfers of such securities.
3.11 PROXIES. The Custodian shall, with respect to the
Securities held hereunder, promptly deliver to each Fund all proxies, all
proxy soliciting materials and all notices relating to such Securities. If
the Securities are registered otherwise than in the name of a Fund or a
nominee of a Fund, the Custodian shall use its best reasonable efforts,
consistent with applicable law, to cause all proxies to be promptly executed
by the registered holder of such Securities in accordance with Proper
Instructions.
3.12 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The
Custodian shall transmit promptly to each Fund all written information
(including, without limitation, pendency of calls and maturities of
Securities and expirations of rights in connection therewith and notices of
exercise of put and call options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund) received by the Custodian
from issuers of Securities being held for the Fund. With respect to tender
or exchange offers, the Custodian shall transmit promptly to each Fund all
written information received by the Custodian from issuers of the Securities
whose tender or exchange is sought and from the party (or its agents) making
the tender or exchange offer. If a Fund desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Fund shall notify the Custodian at least three Business Days prior to the
date of which the Custodian is to take such action.
3.13 REPORTS BY CUSTODIAn. The Custodian shall each business
day furnish each Fund with a statement summarizing all transactions and
entries for the account of the Fund for the preceding day. At the end of
every month, the Custodian shall furnish each Fund with a list of the cash
and portfolio securities showing the quantity of the issue owned, the cost of
each issue and the market value of each issue at the end of each month. Such
monthly report shall also contain separate listings of (a) unsettled trades
and (b) when-issued securities. The Custodian shall furnish such other
reports as may be mutually agreed upon from time-to-time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT TO ASSETS OF THE
FUNDS HELD OUTSIDE THE UNITED
STATES
4.1 CUSTODY OUTSIDE THE UNITED STATES. Each Fund authorizes the
Custodian to hold Foreign Securities and cash in custody accounts which have
been established by the Custodian with (i) its foreign branches, (ii) foreign
banking institutions, foreign branches of United States banks and
subsidiaries of United States banks or bank holding companies (each a
"Foreign Custodian") and (iii) Foreign Securities depositories or clearing
agencies (each a "Foreign Securities Depository"); provided, however, that
the appropriate Board or Executive Committee has approved in advance the use
of each such Foreign Custodian and Foreign Securities Depository and the
contract between the Custodian and each Foreign Custodian and that such
approval is set forth in Proper Instructions and a certified copy of a
resolution of the Board or of the Executive Committee certified by the
Secretary or an Assistant Secretary of the appropriate Investment Company.
Unless expressly provided to the contrary in this Section 4, custody of
Foreign Securities and assets held outside the United States by the
Custodian, a Foreign Custodian or through a Foreign Securities Depository
shall be governed by this Agreement, including Section 3 hereof.
4.2 ASSETS TO BE HELD. The Custodian shall limit the securities
and other assets maintained in the custody of its foreign branches, Foreign
Custodians and Foreign Securities Depositories to: (i) "foreign securities",
as defined in paragraph (c) (1) of Rule 17f-5 under the Fund Act, and (ii)
cash and cash equivalents in such amounts as the Custodian or an affected
Fund may determine to be reasonably necessary to effect the Fund's Foreign
Securities transactions.
4.3 OMITTED.
4.4 SEGREGATION OF SECURITIES. The Custodian shall identify on
its books and records as belonging to the appropriate Fund, the Foreign
Securities of each Fund held by each Foreign Custodian.
4.5 AGREEMENTS WITH FOREIGN CUSTODIANS. Each agreement between
the Custodian and a Foreign Custodian shall be substantially in the form as
delivered to the Investment Companies for their Boards' review, and shall not
be amended in a way that materially adversely affects any Fund without the
prior written consent of the Fund. Upon request, the Custodian shall certify
to the Funds that an agreement between the Custodian and a Foreign Custodian
meets the requirements of Rule 17f-5 under the 1940 Act.
4.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUNDS. Upon
request of a Fund, the Custodian will use its best reasonable efforts to
arrange for the independent accountants or auditors of the Fund to be
afforded access to the books and records of any Foreign Custodian insofar as
such books and records relate to the custody by any such Foreign Custodian of
assets of the Fund.
4.7 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNTS. Upon receipt of
Proper Instructions, the Custodian shall instruct the appropriate Foreign
Custodian to transfer, exchange or deliver Foreign Securities owned by a
Fund, but, except to the extent explicitly provided herein, only in any of
the cases specified in Subsection 3.2. Upon receipt of Proper Instructions,
the Custodian shall pay out or instruct the appropriate Foreign Custodian to
pay out monies of a Fund in any of the cases specified in Subsection 3.6.
Notwithstanding anything herein to the contrary, settlement and payment for
Foreign Securities received for the account of a Fund and delivery of Foreign
Securities maintained for the account of a Fund may be effected in accordance
with the customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities to
the purchaser thereof or to a dealer therefor (or an agent for such purchaser
or dealer) against a receipt with the expectation of receiving later payment
for such securities from such purchaser or dealer. Foreign Securities
maintained in the custody of a Foreign Custodian may be maintained in the
name of such entity or its nominee name to the same extent as set forth in
Section 3.3 of this Agreement and each Fund agrees to hold any Foreign
Custodian and its nominee harmless from any liability as a holder of record
of such securities.
4.8 LIABILITY OF FOREIGN CUSTODIAN. Each agreement between the
Custodian and a Foreign Custodian shall, unless otherwise mutually agreed to
by the Custodian and a Fund, require the Foreign Custodian to exercise
reasonable care or, alternatively, impose a contractual liability for breach
of contract without an exception based upon a standard of care in the
performance of its duties and to indemnify and hold harmless the Custodian
from and against any loss, damage, cost, expense, liability or claim arising
out of or in connection with the Foreign Custodian's performance of such
obligations, excepting, however, Citibank, N.A., and its subsidiaries and
branches, where the indemnification is limited to direct money damages and
requires that the claim be promptly asserted. At the election of a Fund, it
shall be entitled to be subrogated to the rights of the Custodian with
respect to any claims against a Foreign Custodian as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim, unless such subrogation is prohibited by local
law.
4.9 MONITORING RESPONSIBILITIES.
(a) The Custodian will promptly inform each Fund in the
event that the Custodian learns of a material adverse change in the financial
condition of a Foreign Custodian or learns that a Foreign Custodian's
financial condition has declined or is likely to decline below the minimum
levels required by Rule 17f-5 of the 1940 Act.
(b) The custodian will furnish such information as may be
reasonably necessary to assist each Investment Company's Board in its annual
review and approval of the continuance of all contracts or arrangements with
Foreign Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper Instructions" means
instructions of a Fund received by the Custodian via telephone or in Writing
which the Custodian believes in good faith to have been given by Authorized
Persons (as defined below) or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Custodian may
specify. Any Proper Instructions delivered to the Custodian by telephone
shall promptly thereafter be confirmed in accordance with procedures, and
limited in subject matter, as mutually agreed upon by the parties. Unless
otherwise expressly provided, all Proper Instructions shall continue in full
force and effect until canceled or superseded. If the Custodian requires test
arrangements, authentication methods or other security devices to be used
with respect to Proper Instructions, any Proper Instructions given by the
Funds thereafter shall be given and processed in accordance with such terms
and conditions for the use of such arrangements, methods or devices as the
Custodian may put into effect and modify from time to time. The Funds shall
safeguard any testkeys, identification codes or other security devices which
the Custodian shall make available to them. The Custodian may electronically
record any Proper Instructions given by telephone, and any other telephone
discussions, with respect to its activities hereunder. As used in this
Agreement, the term "Authorized Persons" means such officers or such agents
of a Fund as have been properly appointed pursuant to a resolution of the
appropriate Board or Executive Committee, a certified copy of which has been
provided to the Custodian, to act on behalf of the Fund under this
Agreement. Each of such persons shall continue to be an Authorized Person
until such time as the Custodian receives Proper Instructions that any such
officer or agent is no longer an Authorized Person.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority
from a Fund:
(a) make payments to itself or others for minor expenses
of handling Securities or other similar items relating to its duties under
this Agreement, provided that all such payments shall be accounted for to the
Fund;
(b) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and
(c) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer and
other dealings with the Securities and property of the Fund except as
otherwise provided in Proper Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions
(conveyed by telephone or in Writing), notice, request, consent, certificate
or other instrument or paper believed by it to be genuine and to have been
properly given or executed by or on behalf of a Fund. The Custodian may
receive and accept a certified copy of a resolution of a Board or Executive
Committee as conclusive evidence (a) of the authority of any person to act in
accordance with such resolution or (b) of any determination or of any action
by the Board or Executive Committee as described in such resolution, and such
resolution may be considered as in full force and effect until receipt by the
Custodian of written notice by an Authorized Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary
information in its possession (to the extent permissible under applicable
law) to the entity or entities appointed by the appropriate Board to keep the
books of account of a Fund and/or compute the net asset value per Share of
the outstanding Shares of a Fund.
Section 9. RECORDS
The Custodian shall create and maintain all records relating to
its activities under this Agreement which are required with respect to such
activities under Section 31 of the Investment Company Act and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the appropriate
Investment Company and shall at all times during the regular business hours
of the Custodian be open for inspection by duly authorized officers,
employees or agents of the Investment Company and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at a Fund's
request, supply the Fund with a tabulation of Securities and Cash owned by
the Fund and held by the Custodian and shall, when requested to do so by the
Fund and for such compensation as shall be agreed upon between the Fund and
the Custodian, include certificate numbers in such tabulations.
Section 10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time
between each Investment Company, on behalf of each Fund, and the Custodian.
In addition, should the Custodian in its discretion advance funds (to include
overdrafts) to or on behalf of a Fund pursuant to Proper Instructions, the
Custodian shall be entitled to prompt reimbursement of any amounts advanced.
In the event of such an advance, and to the extent permitted by the 1940 Act
and the Fund's policies, the Custodian shall have a continuing lien and
security interest in and to the property of the Fund in the possession or
control of the Custodian or of a third party acting in the Custodian's
behalf, until the advance is reimbursed. Nothing in this Agreement shall
obligate the Custodian to advance funds to or on behalf of a Fund, or to
permit any borrowing by a Fund except for borrowings for temporary purposes,
to the extent permitted by the Fund's policies.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance of only
such duties as are set forth herein or contained in Proper Instructions and
shall use reasonable care in carrying out such duties. The Custodian shall
be liable to a Fund for any loss which shall occur as the result of the
failure of a Foreign Custodian engaged directly or indirectly by the
Custodian to exercise reasonable care with respect to the safekeeping of
securities and other assets of the Fund to the same extent that the Custodian
would be liable to the Fund if the Custodian itself were holding such
securities and other assets. Nothing in this Agreement shall be read to
limit the responsibility or liability of the Custodian or a Foreign Custodian
for their failure to exercise reasonable care with regard to any decision or
recommendation made by the Custodian or Subcustodian regarding the use or
continued use of a Foreign Securities Depository. In the event of any loss
to a Fund by reason of the failure of the Custodian or a Foreign Custodian
engaged by such Foreign Custodian or the Custodian to utilize reasonable
care, the Custodian shall be liable to the Fund to the extent of the Fund's
damages, to be determined based on the market value of the property which is
the subject of the loss at the date of discovery of such loss and without
reference to any special conditions or circumstances. The Custodian shall be
held to the exercise of reasonable care in carrying out this Agreement, and
shall not be liable for acts or omissions unless the same constitute
negligence or willful misconduct on the part of the Custodian or any Foreign
Custodian engaged directly or indirectly by the Custodian. Each Fund agrees
to indemnify and hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including legal fees
and expenses) incurred by the Custodian or its nominess in connection with
the performance of this Agreement with respect to such Fund, except such as
may arise from any negligent action, negligent failure to act or willful
misconduct on the part of the indemnified entity or any Foreign Custodian.
The Custodian shall be entitled to rely, and may act, on advice of counsel
(who may be counsel for a Fund) on all matters and shall be without liability
for any action reasonably taken or omitted pursuant to such advice. The
Custodian need not maintain any insurance for the benefit of any Fund.
All collections of funds or other property paid or distributed in
respect of Securities held by the Custodian, agent, Subcustodian or Foreign
Custodian hereunder shall be made at the risk of the Funds. The Custodian
shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Custodian, agent, Subcustodian or by a Foreign
Custodian of any payment, redemption or other transaction regarding
securities in respect of which the Custodian has agreed to take action as
provided in Section 3 hereof. The Custodian shall not be liable for any
action taken in good faith upon Proper Instructions or upon any certified
copy of any resolution of the Board and may rely on the genuineness of any
such documents which it may in good faith believe to be validly executed.
Notwithstanding the foregoing, the Custodian shall not be liable for any loss
resulting from, or caused by, the direction of a Fund to maintain custody of
any Securities or cash in a foreign country including, but not limited to,
losses resulting from nationalization, expropriation, currency restrictions,
civil disturbance, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation or other similar occurrences, or events
beyond the control of the Custodian. Finally, the Custodian shall not be
liable for any taxes, including interest and penalties with respect thereto,
that may be levied or assessed upon or in respect of any assets of any Fund
held by the Custodian.
Section 12. LIMITED LIABILITY OF EACH INVESTMENT COMPANY
The Custodian acknowledges that it has received notice of and
accepts the limitations of liability as set forth in each Investment
Company's Agreement and Declaration of Trust, Articles of Incorporation, or
Agreement of Limited Partnership. The Custodian agrees that each Fund's
obligation hereunder shall be limited to the assets of the Fund, and that the
Custodian shall not seek satisfaction of any such obligation from the
shareholders of the Fund nor from any Board Member, officer, employee, or
agent of the Fund or the Investment Company on behalf of the Fund.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of its
execution and shall continue in full force and effect until terminated as
hereinafter provided. This Agreement may be terminated by each Investment
Company, on behalf of a Fund, or by the Custodian by 90 days notice in
Writing to the other provided that any termination by an Investment Company
shall be authorized by a resolution of the Board, a certified copy of which
shall accompany such notice of termination, and provided further, that such
resolution shall specify the names of the persons to whom the Custodian shall
deliver the assets of the affected Funds held by the Custodian. If notice of
termination is given by the Custodian, the affected Investment Companies
shall, within 90 days following the giving of such notice, deliver to the
Custodian a certified copy of a resolution of the Boards specifying the names
of the persons to whom the Custodian shall deliver assets of the affected
Funds held by the Custodian. In either case the Custodian will deliver such
assets to the persons so specified, after deducting therefrom any amounts
which the Custodian determines to be owed to it hereunder (including all
costs and expenses of delivery or transfer of Fund assets to the persons so
specified). If within 90 days following the giving of a notice of
termination by the Custodian, the Custodian does not receive from the
affected Investment Companies certified copies of resolutions of the Boards
specifying the names of the persons to whom the Custodian shall deliver the
assets of the Funds held by the Custodian, the Custodian, at its election,
may deliver such assets to a bank or trust company doing business in the
State of California to be held and disposed of pursuant to the provisions of
this Agreement or may continue to hold such assets until a certified copy of
one or more resolutions as aforesaid is delivered to the Custodian. The
obligations of the parties hereto regarding the use of reasonable care,
indemnities and payment of fees and expenses shall survive the termination of
this Agreement.
Section 14. MISCELLANEOUS
14.1 RELATIONSHIP. Nothing contained in this Agreement shall (i)
create any fiduciary, joint venture or partnership relationship between the
Custodian and any Fund or (ii) be construed as or constitute a prohibition
against the provision by the Custodian or any of its affiliates to any Fund
of investment banking, securities dealing or brokerages services or any other
banking or financial services.
14.2 FURTHER ASSURANCES. Each party hereto shall furnish to the
other party hereto such instruments and other documents as such other party
may reasonably request for the purpose of carrying out or evidencing the
transactions contemplated by this Agreement.
14.3 ATTORNEYS' FEES. If any lawsuit or other action or
proceeding relating to this Agreement is brought by a party hereto against
the other party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (including allocated
costs and disbursements of in-house counsel), in addition to any other relief
to which the prevailing party may be entitled.
14.4 NOTICES. Except as otherwise specified herein, each notice
or other communication hereunder shall be in Writing and shall be delivered
to the intended recipient at the following address (or at such other address
as the intended recipient shall have specified in a written notice given to
the other parties hereto):
if to a Fund or Investment Company: if to the Custodian:
[Fund or Investment Company] The Bank of New York
c/o Franklin Resources, Inc. Mutual Fund Custody Manager
000 Xxxxxxxx Xxxxxx Xxxx. BNY Western Trust Co.
Xxx Xxxxx, XX 00000 000 Xxxxxxx Xx., Xxxxx 00
Attention: Chief Xxxxx Xxxxxxx Xxx Xxxxxxxxx, XX 00000
14.5 HEADINGS. The underlined headings contained herein are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the interpretation
hereof.
14.6 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original and both of which,
when taken together, shall constitute one agreement.
14.7 GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
New York (without giving effect to principles of conflict of laws).
14.8 FORCE MAJEURE. Notwithstanding the provisions of Section
11 hereof regarding the Custodian's general standard of care, no failure,
delay or default in performance of any obligation hereunder shall constitute
an event of default or a breach of this agreement, or give rise to any
liability whatsoever on the part of one party hereto to the other, to the
extent that such failure to perform, delay or default arises out of a cause
beyond the control and without negligence of the party otherwise chargeable
with failure, delay or default; including, but not limited to: action or
inaction of governmental, civil or military authority; fire; strike; lockout
or other labor dispute; flood; war; riot; theft; earthquake; natural
disaster; breakdown of public or common carrier communications facilities;
computer malfunction; or act, negligence or default of the other party. This
paragraph shall in no way limit the right of either party to this Agreement
to make any claim against third parties for any damages suffered due to such
causes.
14.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns, if any.
14.10 WAIVER. No failure on the part of any person to exercise
any power, right, privilege or remedy hereunder, and no delay on the part of
any person in the exercise of any power, right, privilege or remedy
hereunder, shall operate as a waiver thereof; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any
other or further exercise thereof or of any other power, right, privilege or
remedy.
14.11 AMENDMENTS. This Agreement may not be amended, modified,
altered or supplemented other than by means of an agreement or instrument
executed on behalf of each of the parties hereto.
14.12 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as
to which it is determined to be invalid, unlawful, void or unenforceable,
shall not be impaired or otherwise affected and shall continue to be valid
and enforceable to the fullest extent permitted by law.
14.13 PARTIES IN INTEREST. None of the provisions of this
Agreement is intended to provide any rights or remedies to any person other
than the Investment Companies, for themselves and for the Funds, and the
Custodian and their respective successors and assigns, if any.
14.14 PRE-EMPTION OF OTHER AGREEMENTS. In the event of any
conflict between this Agreement, including without limitation any amendments
hereto, and any other agreement which may now or in the future exist between
the parties, the provisions of this Agreement shall prevail.
14.15 VARIATIONS OF PRONOUNS. Whenever required by the context
hereof, the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; and the
neuter gender shall include the masculine and feminine genders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.
THE BANK OF NEW YORK
By: /S/ XXXXXXX X. GRUNSTON
Name: Xxxxxxx X. Grunston
Title: Vice President
THE INVESTMENT COMPANIES LISTED ON EXHIBIT A TO THE AGREEMENT
By: /S/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
Their: VICE PRESIDENT & SECRETARY
