CUSTODIAN AGREEMENT
Pilgrim Troika Dialog Russia Fund, Inc.
THIS AGREEMENT, dated as of July 26, 2000 between Pilgrim Troika Dialog
Russia Fund, Inc., an open-end management investment company organized under the
laws of the state of Maryland and registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940 Act")
( "the FUND"), and ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., a limited partnership formed
under the laws of the State of New York (BBH&CO. or the CUSTODIAN),
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the Fund
and to provide related services, all as provided herein, and BBH&Co. is willing
to accept such employment, subject to the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints BBH&Co. as the Fund's
custodian, and BBH&Co. hereby accepts such appointment. All Investments of the
Fund delivered to the Custodian or its agents or Subcustodians shall be dealt
with as provided in this Agreement. The duties of the Custodian with respect to
the Fund's Investments shall be only as set forth expressly in this Agreement
which duties are generally comprised of safekeeping and various administrative
duties that will be performed in accordance with Instructions and as reasonably
required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Fund. This Agreement does not violate any Applicable Law or
conflict with or constitute a default under the Fund's prospectus or other
organic document, agreement, judgment, order or decree to which the Fund is a
party or by which it or its Investments is bound.
2.2 By providing an Instruction with respect to the first acquisition of an
Investment in a jurisdiction other than the United States of America, the Fund
shall be deemed to have confirmed to the Custodian that the Fund has (a)
assessed and accepted all material Country or Sovereign Risks and accepted
responsibility for their occurrence, (b) made all determinations required to be
made by the Fund under the 1940 Act, and (iii) appropriately and adequately
disclosed to its shareholders, all material investment risks, including those
relating to the custody and settlement infrastructure or the servicing of
securities in such jurisdictions.
2.3 The Fund shall safeguard and shall solely be responsible for the
safekeeping of any testkeys, identification codes, passwords, other security
devices or statements of account with which the Custodian provides it. In
furtherance and not limitation of the foregoing, in the event the Fund utilizes
any on-line service offered by the Custodian, the Fund and the Custodian shall
be fully responsible for the security of its respective connecting terminal,
access thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards in respect thereof.
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3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered by BBH&Co.
and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound.
BBH&Co. hereby further warrants to the Fund that as of the date of this
Agreement it is maintaining a sufficient bankers blanket bond and hereby agrees
to notify the Fund in the event its bankers blanket bond is canceled or
otherwise lapses.
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the Custodian
shall perform its duties pursuant to Instructions. As used herein, the term
INSTRUCTION shall mean a directive initiated by the Fund, acting directly or
through its board of directors, officers or other Authorized Persons, which
directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON shall be
a person or entity authorized to give Instructions for or on behalf of the Fund
by written notices to the Custodian or otherwise in accordance with procedures
delivered to and acknowledged by the Custodian, including without limitation the
Fund's Investment Adviser or Foreign Custody Manager. The Custodian may treat
any Authorized Person as having full authority of the Fund to issue Instructions
hereunder unless the notice of authorization contains explicit limitations as to
said authority. The Custodian shall be entitled to rely upon the authority of
Authorized Persons until it receives appropriate written notice from the Fund to
the contrary.
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4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall make
available to the Fund from time to time unless the Fund shall elect to transmit
such Instruction in accordance with Subsections 4.2.1 through 4.2.3 of this
Section.
4.2.1 FUND DESIGNATED SECURED-TRANSMISSION METHOD. Instructions may be
transmitted through a secured or tested electro-mechanical means identified
by the Fund or by an Authorized Person entitled to give Instruction and
acknowledged and accepted by the Custodian; it being understood that such
acknowledgment shall authorize the Custodian to receive and process
instructions received by such means of delivery but shall not represent a
judgment by the Custodian as to the reasonableness or security of the
method determined by the Authorized Person.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in a
writing that bears the manual signature of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be transmitted
by another means determined by the Fund or Authorized Persons and
acknowledged and accepted by the Custodian (subject to the same limits as
to acknowledgements as is contained in Subsection 4.2.1, above) including
Instructions given orally or by SWIFT, telex or telefax (whether tested or
untested).
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When an Instruction is given by means established under this Subsection 4.2, it
shall be the responsibility of the Custodian to use reasonable care to adhere to
any security or other procedures established in writing between the Custodian
and the Authorized Person with respect to such means of Instruction. When an
Instruction is given by means established under Subsections 4.2.1 through 4.2.3,
it shall be the responsibility of such Authorized Person for determining that
the particular means chosen is reasonable under the circumstances. Oral
Instructions shall be binding upon the Custodian only if and when the Custodian
takes action with respect thereto. With respect to telefax instructions, the
parties agree and acknowledge that receipt of legible Instructions cannot be
assured, that the Custodian cannot verify that authorized signatures on telefax
Instructions are original or properly affixed, and that the Custodian shall not
be liable for losses or expenses incurred through actions taken in reliance on
inaccurately stated, illegible or unauthorized telefax Instructions. The
provisions of Section 4A of the Uniform Commercial Code shall apply to funds
transfers performed in accordance with Instructions. In the event that a Fund's
Transfer Services Agreement is executed between the Fund or an Authorized Person
and the Custodian, such an agreement shall comprise a designation of form of a
means of delivering Instructions for purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person shall
be responsible for assuring the adequacy and accuracy of Instructions.
Particularly, upon any acquisition or disposition or other dealing in the Fund's
Investments and upon any delivery and transfer of any Investment or moneys, the
person initiating such Instruction shall give the Custodian an Instruction with
appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of settlement;
4.3.2 The specification of the type of transaction;
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4.3.4 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money to be
received or delivered and currency information. Where an Instruction is
communicated by electronic means, or otherwise where an Instruction
contains an identifying number such as a CUSIP, SEDOL or ISIN number, the
Custodian shall be entitled to rely on such number as controlling
notwithstanding any inconsistency contained in such Instruction,
particularly with respect to Investment description;
4.3.5 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, the Custodian may give prompt notice of such determination to the
Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any action in
response to the Instruction initially delivered until the redelivery of an
amended or reformed Instruction.
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund shall
take into consideration delays which may occur due to the involvement of a
Subcustodian or agent, differences in time zones, and other factors particular
to a given market, exchange or issuer. When the Custodian has established
specific timing requirements or deadlines with respect to particular classes of
Instruction, or when an Instruction is received by the Custodian at such a time
that it could not reasonably be expected to have acted on such Instruction due
to time zone differences or other factors beyond its reasonable control, the
execution of any Instruction received by the Custodian after such deadline or at
such time (including any modification or revocation of a previous Instruction)
shall be at the risk of the Fund.
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5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered
to it or Subcustodians for the Fund in accordance with the provisions of this
Section. The Custodian shall not be responsible for (a) the safekeeping of
Investments not delivered or that are not caused to be issued to it or its
Subcustodians; or (b) pre-existing faults or defects in Investments that are
delivered to the Custodian, or its Subcustodians. The Custodian is hereby
authorized to hold with itself or a Subcustodian, and to record in one or more
accounts, all Investments delivered to and accepted by the Custodian, any
Subcustodian or their respective agents pursuant to an Instruction or in
consequence of any corporate action. The Custodian shall hold Investments for
the account of the Fund and shall segregate Investments from assets belonging to
the Custodian and shall cause its Subcustodians to segregate Investments from
assets belonging to the Subcustodian in an account held for the Fund or in an
account maintained by the Subcustodian generally for non-proprietary assets of
the Custodian.
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and maintain
Investments in any Securities Depository, either directly or through one or more
Subcustodians appointed by the Custodian. Investments held in a Securities
Depository shall be held (a) subject to the agreement, rules, statement of terms
and conditions or other document or conditions effective between the Securities
Depository and the Custodian or the Subcustodian, as the case may be, and (b) in
an account for the Fund or in bulk segregation in an account maintained for the
non-proprietary assets of the entity holding such Investments in the Depository.
If market practice or the rules and regulations of the Securities Depository
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prevent the Custodian, the Subcustodian or (any agent of either) from holding
its client assets in such a separate account, the Custodian, the Subcustodian or
other agent shall as appropriate segregate such Investments for benefit of the
Fund or for benefit of clients of the Custodian generally on its own books.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be held in
registered or bearer form: (a) in the Custodian's vault; (b) in the vault of a
Subcustodian or agent of the Custodian or a Subcustodian; or (c) in an account
maintained by the Custodian, Subcustodian or agent at a Securities Depository;
all in accordance with customary market practice in the jurisdiction in which
any Investments are held.
5.3 REGISTERED ASSETS. Investments which are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Fund or a
nominee for any of the foregoing, and may be held in any manner set forth in
paragraph 5.2 above with or without any identification of fiduciary capacity in
such registration.
5.4 BOOK ENTRY ASSETS. Investments which are represented by book-entry may
be so held in an account maintained by the Book-Entry Agent on behalf of the
Custodian, a Subcustodian or another agent of the Custodian, or a Securities
Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of Investments
for which the Custodian is responsible under the terms of this Agreement, the
Custodian shall replace such Investment, or in the event that such replacement
cannot be effected, the Custodian shall pay to the Fund the fair market value of
such Investment based on the last available price as of the close of business in
the relevant market on the date that a claim was first made to the Custodian
with respect to such loss, or, if less, such other amount as shall be agreed by
the parties as the date for settlement.
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6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments purchased
for the account of the Fund shall be paid for (a) against delivery thereof to
the Custodian or a Subcustodian, as the case may be, either directly or through
a Clearing Corporation or a Securities Depository (in accordance with the rules
of such Securities Depository or such Clearing Corporation), or (b) otherwise in
accordance with an Instruction, Applicable Law, generally accepted trade
practices, or the terms of the instrument representing such Investment.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold for the
account of the Fund shall be delivered (a) against payment therefor in cash, by
check or by bank wire transfer, (b) by credit to the account of the Custodian or
the applicable Subcustodian, as the case may be, with a Clearing Corporation or
a Securities Depository (in accordance with the rules of such Securities
Depository or such Clearing Corporation), or (c) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the terms of
the instrument representing such Investment.
6.3 DELIVERY IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER COLLATERAL
AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian may deliver
Investments or cash of the Fund in connection with borrowings and other
collateral and margin requirements.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant regarding margin (TRI-PARTY AGREEMENT), the Custodian shall (a) receive
and retain, to the extent the same are provided to the Custodian, confirmations
or other documents evidencing the purchase or sale by the Fund of
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exchange-traded futures contracts and commodity options, (b) when required by
such Tri-Party Agreement, deposit and maintain in an account opened pursuant to
such Agreement (MARGIN ACCOUNT), segregated either physically or by book-entry
in a Securities Depository for the benefit of any futures commission merchant,
such Investments as the Fund shall have designated as initial, maintenance or
variation "margin" deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any exchange-traded futures
contracts and commodity options; and (c) thereafter pay, release or transfer
Investments into or out of the margin account in accordance with the provisions
of the such Agreement. Alternatively, the Custodian may deliver Investments, in
accordance with an Instruction, to a futures commission merchant for purposes of
margin requirements in accordance with Rule 17f-6 under the 1940 Act. The
Custodian shall in no event be responsible for the acts and omissions of any
futures commission merchant to whom Investments are delivered pursuant to this
Section; for the sufficiency of Investments held in any Margin Account; or, for
the performance of any terms of any exchange-traded futures contracts and
commodity options.
6.5 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to time, the
Fund's Investments may include Investments that are not ownership interests as
may be represented by certificate (whether registered or bearer), by entry in a
Securities Depository or by book entry agent, registrar or similar agent for
recording ownership interests in the relevant Investment. If the Fund shall at
any time acquire such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and derivative
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arrangements, the Custodian shall (a) receive and retain, to the extent the same
are provided to the Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund's account in accordance with the terms
of the applicable arrangement, but only to the extent directed to do so by
Instruction. The Custodian shall have no responsibility for agreements running
to the Fund as to which it is not a party other than to retain, to the extent
the same are provided to the Custodian, documents or copies of documents
evidencing the arrangement and, in accordance with Instruction, to include such
arrangements in reports made to the Fund.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the Fund for
other securities in connection with any reorganization, recapitalization,
conversion, split-up, change of par value of shares or similar event, and (b)
deposit any such securities in accordance with the terms of any reorganization
or protective plan.
6.7 SURRENDER OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian may surrender securities: (a) in temporary form for definitive
securities; (b) for transfer into the name of an entity allowable under Section
5.3; and (c) for a different number of certificates or instruments representing
the same number of shares or the same principal amount of indebtedness.
6.8 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian shall (a)
deliver warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, and (b) deposit securities in
response to any invitation for the tender thereof.
6.9 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by Instruction,
the Custodian shall: (a) comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions or similar rights of securities ownership
affecting securities held on the Fund's account and promptly notify the Fund of
such action, and (b) collect all stock dividends, rights and other items of like
nature with respect to such securities.
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6.10 INCOME COLLECTION. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with respect to
Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for: (a)
the collection of amounts due and payable with respect to Investments that are
in default, or (b) the collection of cash or share entitlements with respect to
Investments that are not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and deliver any
instrument required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law or
established market practice in connection with the receipt of income, capital
gains or other payments by the Fund with respect to Investments, or in
connection with the sale, purchase or ownership of Investments.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered, to the Fund proxy forms, notices of meeting, and any other notices or
announcements materially affecting or relating to Investments received by the
Custodian or any nominee.
6.13. TAXES. The Custodian shall, where applicable, assist the Fund in the
reclamation of taxes withheld on dividends and interest payments received by the
Fund. In the performance of its duties with respect to tax withholding and
reclamation, the Custodian shall be entitled to rely on the advice of counsel
and upon information and advice regarding the Fund's tax status that is received
from or on behalf of the Fund without duty of separate inquiry.
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6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of moneys
or the free delivery of securities, provided that such Instruction shall
indicate the purpose of such payment or delivery and that the Custodian shall
record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Fund shall have the right to request an accounting with respect to such
expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall provide to the Fund all material information pertaining to a
corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be received as a
result of any corporate action shall be subject to actual collection and may,
when the Custodian deems collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) agents (other than Subcustodians) to carry out some or all
of the administrative provisions of this Agreement (AGENTS), provided, however,
that the appointment of such agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
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7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Fund hereby authorizes the Custodian
to open and maintain, with itself or with Subcustodians, cash accounts in United
States Dollars, in such other currencies as are the currencies of the countries
in which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of the
Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the Fund. Such
accounts collectively shall be a deposit obligation of the Custodian and shall
be subject to the terms of this Section 7 and the general liability provisions
contained in Section 9. Cash accounts opened on the books of a Subcustodian may
be opened in the name of the Fund or the Custodian or in the name of the
Custodian for its customers generally (AGENCY ACCOUNTS). Such deposits shall be
obligations of the Subcustodian and shall be treated as an Investment of the
Fund. Accordingly, the Custodian shall be responsible for exercising reasonable
care in the administration of such accounts but shall not otherwise be liable
for their repayment in the event such Subcustodian, by reason of its bankruptcy,
insolvency or otherwise, fails to make repayment.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The Custodian
shall make payments from or deposits to any of said accounts in the course of
carrying out its administrative duties, including but not limited to income
collection with respect to the Fund's Investments, and otherwise in accordance
with Instructions. The Custodian and its Subcustodians shall be required to
credit amounts to the cash accounts only when moneys are actually received in
cleared funds in accordance with banking practice in the country and currency of
deposit. Any credit made to any Principal or Agency Account before actual
receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.
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7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or Subcustodian if
such branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in writing
to repay the deposit under such circumstances. All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Fund shall be for
the account of the Fund.
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to the
terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions. The
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Custodian may act as principal in any foreign exchange transaction with the Fund
in accordance with Section 7.4.2 of this Agreement. The obligations of the
Custodian in respect of all foreign exchange transactions (whether or not the
Custodian shall act as principal in such transaction) shall be contingent on the
free, unencumbered transferability of the currency transacted on the actual
settlement date of the transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall
process foreign exchange transactions (including without limitation
contracts, futures, options, and options on futures), where any third party
acts as principal counterparty to the Fund on the same basis it performs
duties as agent for the Fund with respect to any other of the Fund's
Investments. Accordingly the Custodian shall only be responsible for
delivering or receiving currency on behalf of the Fund in respect of such
contracts pursuant to Instructions. The Custodian shall not be responsible
for the failure of any counterparty (including any Subcustodian) in such
agency transaction to perform its obligations thereunder. The Custodian (a)
shall transmit cash and Instructions to and from the currency broker or
banking institution with which a foreign exchange contract or option has
been executed pursuant hereto, (b) may make free outgoing payments of cash
in the form of United States Dollars or foreign currency without receiving
confirmation of a foreign exchange contract or option or confirmation that
the countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received,
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and (c) shall hold all confirmations, certificates and other documents and
agreements received by the Custodian and evidencing or relating to such
foreign exchange transactions in safekeeping. The Fund accepts full
responsibility for its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and understands
that the Fund shall be responsible for any and all costs and interest
charges which may be incurred by the Fund or the Custodian as a result of
the failure or delay of third parties to deliver foreign exchange.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The Custodian
may undertake foreign exchange transactions with the Fund as principal as
the Custodian and the Fund may agree from time to time. In such event, the
foreign exchange transaction will be performed in accordance with the
particular agreement of the parties, or in the event a principal foreign
exchange transaction is initiated by Instruction in the absence of specific
agreement, such transaction will be performed in accordance with the usual
commercial terms of the Custodian.
7.5 DELAYS. If no event of Force Majeure shall have occurred and be
continuing and in the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian shall be liable to the Fund: (a) with
respect to Principal Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected; and,
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(b) with respect to Agency Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Subcustodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected. Except
is set forth in Section 8.3, the Custodian shall not be liable for delays in
carrying out such Instructions to transfer cash which are not due to the
Custodian's own negligence or willful misconduct.
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping duties
pursuant to Section 5 hereof or its administration of the Fund's assets pursuant
to Section 6 hereof, the Custodian or any Subcustodian advances monies to
facilitate settlement or otherwise for benefit of the Fund (whether or not any
Principal or Agency Account shall be overdrawn either during, or at the end of,
any Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title to any
Investments purchased with such Advance save a right to receive such
Investments upon: (a) the debit of the Principal or Agency Account; or, (b)
if such debit would produce an overdraft in such account, other
reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in all Investments;
and,
7.6.3 agree that the Custodian may secure the resulting Advance by
perfecting a security interest in all Investments under Applicable Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance
monies to the Fund, and in the event that such Advance occurs, any transaction
giving rise to an Advance shall be for the account and risk of the Fund and
shall not be deemed to be a transaction undertaken by the Custodian for its own
18
account and risk. If such Advance shall have been made by a Subcustodian or any
other person, the Custodian may assign the security interest and any other
rights granted to the Custodian hereunder to such Subcustodian or other person.
If the Fund shall fail to repay when due the principal balance of an Advance and
accrued and unpaid interest thereon, the Custodian or its assignee, as the case
may be, shall be entitled to utilize the available cash balance in any Agency or
Principal Account and to dispose of any Property to the extent necessary to
recover payment of all principal of, and interest on, such Advance in full. The
Custodian may assign any rights it has hereunder to a Subcustodian or third
party. Any security interest in Investments taken hereunder shall be treated as
financial assets credited to securities accounts under Articles 8 and 9 of the
Uniform Commercial Code as adopted in New York. Accordingly, the Custodian shall
have the rights and benefits of a secured creditor that is a securities
intermediary under such Articles 8 and 9.
7.7 INTEGRATED ACCOUNT. Subject to Section 16 hereof, for purposes hereof,
deposits maintained in all Principal Accounts (whether or not denominated in
United States Dollars) shall collectively constitute a single and indivisible
current account with respect to the Fund's obligations to the Custodian, or its
assignee, and balances in such Principal Accounts shall be available for
satisfaction of the Fund's obligations under this Section 7. The Custodian shall
further have a right of offset against the balances in any Agency Account
maintained hereunder to the extent that the aggregate of all Principal Accounts
is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
19
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may
deposit and/or maintain, either directly or through one or more agents appointed
by the Custodian, Investments of the Fund in any Securities Depository in the
United States, including The Depository Trust Company, The Participants Trust
Company and the Federal Reserve Book-Entry System provided such Depository meets
applicable requirements of the Federal Reserve Bank or of the Securities and
Exchange Commission. With the prior approval of Fund which shall not be
unreasonably withheld, Custodian may, appoint any bank as defined in Section
2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section
17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf
of the Fund as a Subcustodian for purposes of holding Investments of the Fund in
the United States. Such appointment of domestic Subcustodians shall be subject
to approval of the Fund in accordance with Section 8.2.1.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may
deposit and/or maintain Investments of the Fund for which the primary market is
outside the United States, and such cash and cash equivalents as are reasonably
necessary, (at the direction of the Fund) to effect the Fund's transactions in
such Investments, in any non-U.S. Securities Depository provided such Securities
Depository meets the requirements of an "eligible foreign custodian" under Rule
20
17f-5 promulgated under the 1940 Act, or any successor rule or regulation ("Rule
17f-5") or which by order of the Securities and Exchange Commission is exempted
therefrom. Additionally, the Custodian may, at any time and from time to time,
appoint (a) any bank, trust company or other entity meeting the requirements of
an eligible foreign custodian under Rule 17f-5 or which by order of the
Securities and Exchange Commission is exempted therefrom, or (b) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of the Fund as a Subcustodian for purposes of
holding Investments of the Fund (including foreign currencies) of the Fund for
which the primary market is outside the United States, and such cash and cash
equivalents as are reasonably necessary, (at the direction of the Fund) to
effect the Fund's transactions in such Investments. Such appointment of foreign
Subcustodians shall be subject to approval of the Fund in accordance with
Subsections 8.2.1 and 8.2.2.
8.2.1 BOARD APPROVAL OF SUBCUSTODIANS. Unless and except to the extent
that review of certain matters concerning the appointment of Subcustodians
shall have been delegated to the Custodian pursuant to Subsection 8.2.2,
the Custodian shall, prior to the appointment of any Subcustodian for
purposes of holding Investments of the Fund obtain written confirmation of
the approval of the Board of Trustees of the Fund with respect to (a) the
identity of a Subcustodian, (b) the country or countries in which, and the
Securities Depositories, if any, through which, any proposed Subcustodian
is authorized to hold Investments of the Fund, and (c) the Subcustodian
agreement which shall govern such appointment. Each such duly approved
country, Subcustodian and Securities Depository shall be listed on Appendix
A attached hereto as the same may from time to time be amended.
21
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time to time,
the Custodian may offer to perform, and the Fund may accept such offer to
perform, that the Custodian perform certain reviews of Subcustodians and of
Subcustodian contracts as delegate of the Fund's Board. In such event, the
Custodian's duties and obligations with respect to this delegated review
will be performed in accordance with the terms of SCHEDULE "1" (Foreign
Custody Manager Delegation Agreement) of this Agreement/the separate
delegation agreement between the Fund and the Custodian.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. With respect to those Subcustodians
listed on Appendix "A" hereto, the Custodian shall be liable to the Fund for any
loss or damage to the Fund caused by or resulting from the acts omissions of any
Subcustodian to the extent that such acts or omissions would be deemed to be
negligence, gross negligence or willful misconduct in accordance with the terms
of the relevant subcustodian agreement under the laws, circumstances and
practices prevailing in the place where the act or omission occurred. In the
countries indicated in Appendix "B" to this Agreement, the liability of the
Custodian shall be subject to the additional condition that the Custodian
actually recovers such loss or damage from the Subcustodian.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed Investment which is to be held
in a country in which no Subcustodian is authorized to act in order that the
Custodian shall, if it deems appropriate to do so, have sufficient time to
establish a subcustodial arrangement in accordance herewith. In the event,
however, the Custodian is unable to establish such arrangements prior to the
22
time such Investment is to be acquired, the Custodian is authorized to designate
at its discretion a local safekeeping agent, and the use of such local
safekeeping agent with respect to such Investment shall be at the sole risk of
the Fund, and accordingly the Custodian shall be responsible to the Fund for the
actions of such agent if and only to the extent the Custodian shall have
recovered from such agent for any damages caused the Fund by such agent.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall comply with all requirements of applicable law
and shall use reasonable care under the facts and circumstances prevailing in
the market where performance is effected. Subject to the specific provisions of
this Section, the Custodian shall be liable for any direct damage incurred by
the Fund in consequence of the Custodian's negligence, bad faith or willful
misconduct. In no event shall the Custodian be liable hereunder for any special,
indirect, punitive or consequential damages arising out of, pursuant to or in
connection with this Agreement even if the Custodian has been advised of the
possibility of such damages. It is agreed that the Custodian shall have no duty
to assess the risks inherent in the Fund's Investments or to provide investment
advice with respect to such Investments and that the Fund as principal shall
bear any risks attendant to particular Investments such as failure of
counterparty or issuer.
9.1 LIMITATIONS OF PERFORMANCE. The Custodian shall not be responsible
under this Agreement for any failure to perform its duties, and shall not liable
hereunder for any loss or damage in association with such failure to perform,
for or in consequence of the following causes:
23
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance or
event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and which
adversely affects the performance by the Custodian of its obligations
hereunder, by the Subcustodian of its obligations under its Subcustody
Agreement or by any other agent of the Custodian or the Subcustodian,
including any event caused by, arising out of or involving (a) an act of
God, (b) accident, fire, water damage or explosion, (c) any computer,
system or other equipment failure or malfunction caused by any computer
virus or the malfunction or failure of any communications medium, (d) any
interruption of the power supply or other utility service, (e) any strike
or other work stoppage, whether partial or total, (f) any delay or
disruption resulting from or reflecting the occurrence of any Sovereign
Risk, (g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting from or
reflecting the occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, or (i) any other
cause similarly beyond the reasonable control of the Custodian.
9.1.2 COUNTRY RISK. COUNTRY RISK shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of, systemic
and market factors affecting the acquisition, payment for or ownership of
Investments including (a) the prevalence of crime and corruption, (b) the
inaccuracy or unreliability of business and financial information, (c) the
instability or volatility of banking and financial systems, or the absence
24
or inadequacy of an infrastructure to support such systems, (d) custody and
settlement infrastructure of the market in which such Investments are held
and transactions in such Investment take place, (e) the acts, omissions and
operation of any Securities Depository, (f) the risk of the bankruptcy or
insolvency of banking agents, counterparties to cash and securities
transactions, registrars or transfer agents, and (g) the existence of
market conditions which prevent the orderly execution or settlement of
transactions or which affect the value of assets.
9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of any
jurisdiction, including the United States of America, where Investments are
acquired or held hereunder or under a Subcustody Agreement, (a) any act of
war, terrorism, riot, insurrection or civil commotion, (b) the imposition
of any investment, repatriation or exchange control restrictions by any
Governmental Authority, (c) the confiscation, expropriation or
nationalization of any Investment by any Governmental Authority, whether de
facto or de jure, (iv) any devaluation or revaluation of the currency, (d)
the imposition of taxes, levies or other charges affecting Investments,
(vi) any change in the Applicable Law, or (e) any other economic or
political risk incurred or experienced.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for any
loss, claim, damage or other liability arising from the following causes:
25
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other agent of
any issuer; (b) any counterparty with respect to any Investment, including
any issuer of exchange-traded or other futures, option, derivative or
commodities contract; (c) failure of an Investment Advisor, Foreign Custody
Manager or other agent of the Fund; or (d) failure of other third parties
similarly beyond the control or choice of the Custodian.
9.2.2 INFORMATION SOURCES. The Custodian may rely upon information
received from issuers of Investments or agents of such issuers, information
received from Subcustodians and from other commercially reasonable sources
such as commercial data bases and the like, but shall not be responsible
for specific inaccuracies in such information, provided that the Custodian
has relied upon such information in good faith, or for the failure of any
commercially reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's declaration
of trust or by-laws, Applicable Law, or actions by the trustees, or
shareholders of the Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in the rights,
transferability or similar investment characteristics of a given Investment
of the Fund.
26
10. INDEMNIFICATION. The Fund hereby indemnifies the Custodian and each
Subcustodian, and their respective agents, nominees and their partners,
employees, officers and directors, and agrees to hold each of them harmless from
and against all claims and liabilities, including counsel fees and taxes,
incurred or assessed against any of them in connection with the performance of
this Agreement and any Instruction, provided that such performance was without
negligence, bad faith or willful misconduct on the part of the Custodian or
Subcustodian. If a Subcustodian or any other person indemnified under the
preceding sentence, gives written notice of claim to the Custodian, the
Custodian shall promptly give written notice to the Fund.
11. REPORTS AND RECORDS. The Custodian shall:
11.1 create and maintain records relating to the performance of its
obligations under this Agreement;
11.2 make available to the Fund, its auditors, agents and employees, during
regular business hours of the Custodian, upon reasonable request, all records
maintained by the Custodian pursuant to Subsection 11.1 above, subject, however,
to all reasonable security requirements of the Custodian then applicable to the
records of its custody customers generally; and
11.3 make available to the Fund all electronic reports; it being understood
that the Custodian shall not be liable hereunder for the inaccuracy or
incompleteness thereof or for errors in any information included therein.
27
The Fund shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within 60 days after its receipt thereof, such records
shall be deemed to be true and accurate. It is understood that the Custodian now
obtains and will in the future obtain information on the value of assets from
outside sources which may be utilized in certain reports made available to the
Fund. The Custodian deems such sources to be reliable but it is acknowledged and
agreed that the Custodian does not verify nor represent nor warrant as to the
accuracy or completeness of such information and accordingly shall be without
liability in selecting and using such sources and furnishing such information,
provided such sources are selected and information is utilized with reasonable
care.
The books and records pertaining to the Fund and each designated series or
portfolio of the Fund, which are in the possession of the Custodian shall be the
property of the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The Custodian shall, send copies of statements of custodial
activity to the Fund and to its record-keeping agent. Such statements shall
include; statement of cash account(s) including transfers to and from such
account(s), statements regarding receipt and delivery of securities and
statements reflecting month end activity, such statements may also be available
through BBH&Co.'s BIDS system.
The Custodian shall enter into and shall maintain in effect, at no
additional expense to the Fund, with appropriate parties one or more agreements
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the event of
equipment failures, the Custodian shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions but shall have no
liability with respect thereto.
28
12. MISCELLANEOUS.
12.1 PROXIES, ETC. The Fund will promptly execute and deliver, upon
request, such proxies, powers of attorney or other instruments as may be
reasonably necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services to the Fund hereunder.
12.2 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the Custodian
with respect to the subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written agreements heretofore
in effect between the Fund and the Custodian with respect to the custody of the
Fund's Investments.
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be waived,
amended or modified, and no addendum to this Agreement shall be or become
effective, or be waived, amended or modified, except by an instrument in writing
executed by the party against which enforcement of such waiver, amendment or
modification is sought; provided, however, that an Instruction, whether or not
such Instruction shall constitute a waiver, amendment or modification for
purposes hereof, shall be deemed to have been accepted by the Custodian when it
commences actions pursuant thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE LAWS OF CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE BOROUGH OF
MANHATTAN WITH RESPECT TO MATTERS RESULTING FROM THIS AGREEMENT.
29
12.5 NOTICES. Notices and other writings contemplated by this Agreement,
other than Instructions, shall be delivered (a) by hand, (b) by first class
registered or certified mail, postage prepaid, return receipt requested, (c) by
a nationally recognized overnight courier or (d) by facsimile transmission,
provided that any notice or other writing sent by facsimile transmission shall
also be mailed, postage prepaid, to the party to whom such notice is addressed.
All such notices shall be addressed, as follows:
IF TO THE FUND:
Pilgrim Troika Dialog Russia Fund, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IF TO THE CUSTODIAN:
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Securities Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,
or such other address as the Fund or the Custodian may from time to time
designate in writing to the other.
30
12.6 HEADINGS. Paragraph headings included herein are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
the Fund and the Custodian.
12.8 CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering or obtaining services pursuant
to this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any bank examiner of the Custodian or any Subcustodian, any
regulatory authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by Applicable Law.
13. DEFINITIONS. For the purpose of this Agreement, the following defined terms
will have the respective meanings set forth below.
13.1 ADVANCE shall mean any extension of credit by or through the Custodian
or by or through any Subcustodian and shall include amounts paid to third
parties for account of the Fund or in discharge of any expense, tax or other
item payable by the Fund.
13.2 AGENCY ACCOUNT shall mean any deposit account opened on the books of a
Subcustodian or other banking institution in accordance with Section 7.1.
13.3 AGENT shall have the meaning set forth in the last system of Section
6.
31
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction, all (a)
laws, statutes, treaties, regulations, guidelines (or their equivalents); (b)
orders, interpretations licenses and permits; and (c) judgments, decrees,
injunctions writs, orders and similar actions by a court of competent
jurisdiction; compliance with which is required or customarily observed in such
jurisdiction.
13.5 AUTHORIZED PERSON shall mean any person or entity authorized to give
Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 BOOK-ENTRY AGENT shall mean an entity acting as agent for the issuer
of Investments for purposes of recording ownership or similar entitlement to
Investments, including without limitation a transfer agent or registrar.
13.7 CLEARING CORPORATION shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 DELEGATION AGREEMENT shall mean any separate agreement entered into
between the Custodian and the Fund or its authorized representative with respect
to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.9 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody manager
appointed pursuant to Rule 17f-5.
13.10 FUNDS TRANSFER SERVICES AGREEMENT shall mean any separate agreement
entered into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning the processing of payment orders from
Principal Accounts of the Fund.
13.11 INSTRUCTION(S) shall have the meaning assigned in Section 4.
32
13.12 INVESTMENT ADVISOR shall mean any person or entity who is an
Authorized Person to give Instructions with respect to the investment and
reinvestment of the Fund's Investments.
13.13 INVESTMENTS shall mean any investment asset of the Fund, including
without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
13.14 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
13.15 PRINCIPAL ACCOUNT shall mean deposit accounts of the Fund carried on
the books of BBH&Co. as principal in accordance with Section 7.
13.16 SAFEKEEPING ACCOUNT shall mean an account established on the books of
the Custodian or any Subcustodian for purposes of segregating the interests of
the Fund (or clients of the Custodian or Subcustodian) from the assets of the
Custodian or any Subcustodian.
13.17 SECURITIES DEPOSITORY shall mean a central or book entry system or
agency established under Applicable Law for purposes of recording the ownership
and/or entitlement to investment securities for a given market.
13.18 SUBCUSTODIAN shall mean each foreign bank appointed by the Custodian
pursuant to Section 8, but shall not include Securities Depositories.
13.19 TRI-PARTY AGREEMENT shall have the meaning set forth in Section 6.4
hereof.
13.20 1940 ACT shall mean the Investment Company Act of 1940, as amended.
33
14. COMPENSATION. The Fund agrees to pay to the Custodian (a) a fee in an amount
set forth in the fee letter between the Fund and the Custodian in effect on the
date hereof or as amended from time to time, and (b) all reasonable
out-of-pocket expenses incurred by the Custodian, including the fees and
expenses of all Subcustodians, and payable from time to time. Amounts payable by
the Fund under and pursuant to this Section 14 shall be payable by wire transfer
to the Custodian at BBH&Co. in New York, New York.
15. TERMINATION. This Agreement may be terminated by either party in accordance
with the provisions of this Section. The provisions of this Agreement and any
other rights or obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this Agreement.
15.1 NOTICE AND EFFECT. This Agreement may be terminated by either party by
written notice effective no sooner than seventy-five days following the date
that notice to such effect shall be delivered to other party at its address set
forth in paragraph 12.5 hereof.
15.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a successor
custodian, it is agreed that the Investments of the Fund held by the Custodian
or any Subcustodian shall be delivered to the successor custodian in accordance
with reasonable Instructions. The Custodian agrees to cooperate with the Fund in
the execution of documents and performance of other actions necessary or
desirable in order to facilitate the succession of the new custodian. If no
successor custodian shall be appointed, the Custodian shall in like manner
transfer the Fund's Investments in accordance with Instructions.
15.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the Fund either (a) deliver
the Investments of the Fund held hereunder to the Fund at the address designated
for receipt of notices hereunder; or (b) deliver any investments held hereunder
to a bank or trust company having a capitalization of $2 million United States
Dollars or equivalent and operating under the Applicable law of the jurisdiction
34
where such Investments are located and qualified to act as a Custodian or
Subcustodian of the Funds' Investments under the 1940 Act, such delivery to be
at the risk of the Fund. In the event that Investments or moneys of the Fund
remain in the custody of the Custodian or its Subcustodians after the date of
termination owing to the failure of the Fund to issue Instructions with respect
to their disposition or owing to the fact that such disposition could not be
accomplished in accordance with such Instructions despite diligent efforts of
the Custodian, the Custodian shall be entitled to compensation for its services
with respect to such Investments and moneys during such period as the Custodian
or its Subcustodians retain possession of such items and the provisions of this
Agreement shall remain in full force and effect until disposition in accordance
with this Section is accomplished.
16. LIMITATIONS ON LIABILITY. Pursuant to the Fund's Articles of Incorporation,
no trustee, officer, employee or agent of the Fund shall be subject to any
personal liability whatsoever, in his or her official or individual capacity, to
any person, including the Custodian or any Subcustodian, other than to the Fund
or its shareholders, in connection with Fund property or the affairs of the
Fund, save only that arising from his or her bad faith, willful misfeasance,
gross negligence or reckless disregard of his or her duty to such person; and
all persons shall look solely to the Fund property for satisfaction of claims of
any nature against a trustee, officer, employee or agent of the Fund arising in
connection with the affairs of the Fund. Moreover, notwithstanding any other
provision of this Agreement to the contrary, the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with respect to a
designated series or Portfolio of the Fund shall be enforceable against the
assets and property of such series or Portfolio only, and not against the assets
and property of any other series or Portfolio.
35
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
Pilgrim Troika Dialog Russia fund, inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
--------------------------------
By:
Title:
36