AGREEMENT BETWEEN BROWN BROTHERS HARRIMAN & CO. AND EACH OF THE INVESTMENT COMPANIES LISTED ON SCHEDULE A ATTACHED HERETO
Exhibit
9
AGREEMENT
BETWEEN
▇▇▇▇▇
BROTHERS ▇▇▇▇▇▇▇▇ & CO.
AND
EACH
OF THE INVESTMENT COMPANIES
LISTED
ON SCHEDULE A ATTACHED HERETO
Table
of Contents
|
ARTICLE
I. DEFINED TERMS
|
1
|
|
|
Section
1.01.
|
"Account"
|
1
|
|
Section
1.02.
|
"Affiliate"
|
2
|
|
Section
1.03.
|
"Agreement"
|
2
|
|
Section
1.04.
|
"Authorized
Person(s)"
|
2
|
|
Section
1.05.
|
"Bank
Account"
|
2
|
|
Section
1.06.
|
"Banking
Institution"
|
2
|
|
Section
1.07.
|
"Board"
|
2
|
|
Section
1.08.
|
"Business
▇▇▇"
|
▇
|
|
Section
1.09.
|
"Commission"
|
2
|
|
Section
1.10.
|
"DR".
|
3
|
|
Section
1.11.
|
"Domestic
Subcustodian".
|
3
|
|
Section
1.12.
|
"Eligible
Securities Depository"
|
3
|
|
Section
1.13.
|
"Foreign
Subcustodian"
|
3
|
|
Section
1.14.
|
"Fund"
|
3
|
|
Section
1.15.
|
"Institutional
Client"
|
4
|
|
Section
1.16.
|
"Interest
Bearing Deposits"
|
4
|
|
Section
1.17.
|
"Investment
Company Act"
|
4
|
|
Section
1.18.
|
"Loans"
|
4
|
|
Section
1.19.
|
"Overdraft"
|
4
|
|
Section
1.20.
|
"Overdraft
Notice"
|
4
|
|
Section
1.21.
|
"Person"
|
4
|
|
Section
1.22.
|
"Procedural
Agreement"...
|
4
|
|
Section
1.23.
|
"Proper
Instructions"
|
4
|
|
Section
1.24.
|
"Property"
|
5
|
|
Section
1.25.
|
"Securities
System"
|
5
|
|
Section
1.26.
|
"Segregated
Account"
|
5
|
|
Section
1.27.
|
"Series"
|
6
|
|
Section
1.28.
|
"Shareholder
Servicing Agent"
|
6
|
|
Section
1.29.
|
"Shares".
|
6
|
|
Section
1.30.
|
"Subcustodian"
|
6
|
|
Section
1.31.
|
"Terminating
Fund"
|
6
|
|
ARTICLE
II. APPOINTMENT OF CUSTODIAN
|
6
|
|
|
ARTICLE
III. POWERS AND DUTIES OF CUSTODIAN
|
7
|
|
|
Section
3.01.
|
Safekeeping.
|
7
|
|
Section
3.02.
|
Manner
of Holding Securities
|
7
|
|
Section
3.03.
|
Security
Purchases and Sales
|
9
|
|
Section
3.04.
|
Exchanges
of Securities
|
11
|
|
Section
3.05.
|
Depositary
Receipts
|
12
|
|
Section
3.06.
|
Exercise
of Rights; Tender Offers
|
12
|
|
Section
3.07.
|
Stock
Dividends, Rights, Etc.
|
13
|
|
Section
3.08.
|
Options
|
13
|
| i |
|
Section
3.09.
|
Futures
Contracts
|
14
|
|
Section
3.10.
|
Borrowings
|
14
|
|
Section
3.11.
|
Interest
Bearing Deposits
|
16
|
|
Section
3.12.
|
Foreign
Exchange Transactions
|
16
|
|
Section
3.13.
|
Securities
Loans
|
17
|
|
Section
3.14.
|
Collections
|
18
|
|
Section
3.15.
|
Dividends,
Distributions and Redemptions
|
19
|
|
Section
3.16.
|
Proceeds
from Shares Sold
|
19
|
|
Section
3.17.
|
Proxies,
Notices, Etc
|
20
|
|
Section
3.18.
|
Bills
and Other Disbursements
|
20
|
|
Section
3.19.
|
Nondiscretionary
Functions
|
20
|
|
Section
3.20.
|
Bank
Accounts
|
20
|
|
Section
3.21.
|
Deposit
of Fund Assets in Securities Systems
|
21
|
|
Section
3.22.
|
Maintenance
of Assets in Underlying Fund Systems
|
23
|
|
Section
3.23.
|
Other
Transfers
|
24
|
|
Section
3.24.
|
Establishment
of Segregated Accounts
|
24
|
|
Section
3.25.
|
Custodian's
Books and Records
|
24
|
|
Section
3.26.
|
Opinion
of Fund's Independent Certified Public Accountants
|
26
|
|
Section
3.27.
|
Reports
by Independent Certified Public Accountants
|
26
|
|
Section
3.28.
|
Overdrafts
|
26
|
|
Section
3.29.
|
Reimbursement
for Advances
|
28
|
|
Section
3.30.
|
Claims
|
28
|
|
ARTICLE
IV. PROPER INSTRUCTIONS AND RELATED MATTERS
|
28
|
|
|
Section
4.01.
|
Proper
Instructions
|
28
|
|
Section
4.02.
|
Authorized
Persons
|
29
|
|
Section
4.03.
|
Persons
Having Access to Assets of the Fund or Series
|
30
|
|
Section
4.04.
|
Actions
of Custodian Based on Proper Instructions
|
30
|
|
ARTICLE
V. SUBCUSTODIANS
|
30
|
|
|
Section
5.01.
|
Domestic
Subcustodians
|
30
|
|
Section
5.02.
|
Foreign
Subcustodians
|
31
|
|
Section
5.03.
|
Termination
of a Subcustodian
|
31
|
|
Section
5.04
|
Eligible
Securities Depositories
|
31
|
|
ARTICLE
VI. STANDARD OF CARE; INDEMNIFICATION
|
33
|
|
|
Section
6.01.
|
Standard
of Care
|
33
|
|
Section
6.02.
|
Liability
of Custodian for Actions of Other Persons
|
36
|
|
Section
6.03.
|
Indemnification
|
37
|
|
Section
6.04.
|
Fund's
Right to Proceed
|
40
|
|
ARTICLE
VII. COMPENSATION
|
40
|
|
|
ARTICLE
VIII. TERMINATION
|
41
|
|
|
Section
8.01.
|
Termination
of Agreement as to One or More Funds.
|
39
|
|
Section
8.02.
|
Termination
as to One or More Series
|
42
|
|
ARTICLE
IX. MISCELLANEOUS
|
43
|
|
|
Section
9.01.
|
Execution
of Documents, Etc.
|
43
|
|
Section
9.02.
|
Representative
Capacity; Nonrecourse Obligations
|
43
|
| ii |
|
Section
9.03.
|
Several
Obligations of the Funds and the Series
|
44
|
|
Section
9.04.
|
Representations
and Warranties
|
44
|
|
Section
9.05.
|
Entire
Agreement
|
45
|
|
Section
9.06.
|
Waivers
and Amendments
|
46
|
|
Section
9.07.
|
Interpretation
|
46
|
|
Section
9.08.
|
Captions
|
47
|
|
Section
9.09.
|
Governing
Law
|
47
|
|
Section
9.10.
|
Notices
|
47
|
|
Section
9.11.
|
Assignment
|
47
|
|
Section
9.12.
|
Counterparts
|
48
|
|
Section
9.13.
|
Confidentiality;
Survival of Obligations
|
48
|
|
Section
9.14.
|
Shareholder
Communications
|
48
|
| iii |
CUSTODIAN
AGREEMENT
AGREEMENT
made this 26th day of
October, 2001 between each of the investment companies listed on Schedule A
hereto, as the same may be amended from time to time and ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇
& Co. (the "Custodian").
WITNESSETH:
WHEREAS,
each Fund (as defined in Section 1.14 below) desires to appoint the Custodian as
custodian on its own behalf and, if a series fund, on behalf of each of its
series, in accordance with the provisions of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder, under the terms and
conditions set forth in this Custodian Agreement (including any Schedules or
Appendices hereto), and the Custodian has agreed to act as custodian for such
Fund; and
WHEREAS,
the Board of Directors/Trustees of each Fund has approved the appointment of the
Custodian as "Foreign Custody Manager," as such term is defined in Rule 17f-5
under the Investment Company Act of 1940, as amended, of such Fund, and the
Custodian has agreed to assume the responsibilities of a Foreign Custody Manager
under the terms and conditions of this Agreement and the guidelines and
procedures adopted by the Board of Directors/Trustees of each Fund and annexed
hereto as Schedule B.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
ARTICLE
I.
DEFINED
TERMS
The
following terms are defined as follows:
Section
1.01. "Account" shall mean an account of the Custodian established at a bank,
Securities System or Subcustodian (as defined in Sections 1.25 and 1.30,
respectively), which
| 1 |
shall
include only Property (as defined in Section 1.24) held as custodian or
otherwise for a Fund or a series of a Fund. To the extent required by law or in
accord with standard industry practice in a particular market, an Account may be
an omnibus account in the name of the Custodian or its nominee provided that the
records of the Custodian shall indicate at all times the Fund or other customer
for which Property is held in such Account and the respective interests
therein.
Section
1.02. "Affiliate" shall mean any entity that controls, is controlled by, or is
under common control with any other entity.
Section
1.03. "Agreement" shall mean this agreement between each of the Funds and the
Custodian and all current or subsequent schedules and appendices
hereto.
Section
1.04. "Authorized Person(s)" shall mean all persons authorized in writing by
each Fund to give Proper Instructions (as defined in Section 1.23) or any other
notice, request, direction, instruction, certificate or instrument on behalf of
a Fund or a series thereof.
Section
1.05. "Bank Account" shall mean any demand deposit bank account (provided that
demand may not be made by check), which will be an interest bearing bank account
where permitted by law and agreed between the Custodian and a Fund, held on the
books of the Custodian or a Subcustodian for the account of a Fund or a series
of a Fund.
Section
1.06. "Banking Institution" shall mean a bank or trust company, including the
Custodian, any Subcustodian or any subsidiary or Affiliate of the
Custodian.
Section
1.07. "Board" shall mean the Board of Directors or Trustees, as applicable, of a
Fund.
Section
1.08. "Business Day" shall mean any day on which the New York Stock Exchange or
the Custodian is open for business that is not a Saturday or
Sunday.
Section
1.09. "Commission" shall mean the U.S. Securities and Exchange
Commission.
| 2 |
Section
1.10. "DR" shall mean an American Depositary Receipt, European Depositary
Receipt, or Global Depositary Receipt or similar instrument issued by a
depositary to represent the underlying securities held by the
depositary.
Section
1.11. "Domestic Subcustodian" shall mean any bank as defined in Section 2(a)(5)
of the Investment Company Act (as defined in Section 1.17) meeting the
requirements of a custodian under Section 17(f) of the Investment Company Act
and the rules and regulations thereunder, that acts on behalf of one or more
Funds, or on behalf of the Custodian as custodian for one or more Funds, as a
Subcustodian for purposes of holding cash, securities and other assets of such
Funds and performing other functions of the Custodian within the United
States.
Section
1.12. "Eligible Securities Depository" shall mean a system for the central
handling of securities as defined in Rule 17f-4 under the Investment Company Act
that meets the requirements of an "eligible securities depository" under Rule
17f-7 under the Investment Company Act, as such may be amended or interpreted
from time to time by the Commission.
Section
1.13. "Foreign Subcustodian" shall mean (i) any bank, trust company, or other
entity meeting the requirements of an "eligible foreign custodian" under the
rules and regulations under Section 17(f) of the Investment Company Act or by
order of the Commission exempted therefrom, or (ii) any bank as defined in
Section 2(a)(5) of the Investment Company Act meeting the requirements of a
custodian under Section 17(f) of the Investment Company Act and the rules and
regulations thereunder to act on behalf of one or more Funds as a Subcustodian
for purposes of holding cash, securities and other assets of such Fund(s) and
performing other functions of the Custodian in countries other than the United
States.
Section
1.14. "Fund" shall mean any registered, open-end or closed-end investment
company listed on Schedule A hereto as it shall be amended from time to time.
Collectively, they shall be referred to as the "Funds."
| 3 |
Section
1.15. "Institutional Client" shall mean a major commercial bank, corporation,
insurance company, or substantially similar institution that purchases or sells
securities and makes substantial use of custodial services.
Section
1.16. "Interest Bearing Deposits" shall mean interest bearing fixed term and
call deposits.
Section
1.17. "Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
Section
1.18. "Loans" shall mean corporate loans or participation interests therein, or
assignments thereof.
Section
1.19. "Overdraft" shall mean any payment or transfer of funds on behalf of a
Fund or series of a Fund for which there are, at the close of business on the
date of such payment or transfer, insufficient funds held by the Custodian on
behalf of such Fund or series thereof.
Section
1.20. "Overdraft Notice" shall mean any written notification of an Overdraft by
facsimile transmission or any other such manner as a Fund and the Custodian may
agree in writing.
Section
1.21. "Person" shall mean the Custodian or any Subcustodian or Securities
System, or any Eligible Securities Depository used by any such Subcustodian, or
any nominee of the Custodian or any Subcustodian.
Section
1.22. "Procedural Agreement" shall mean any futures margin procedural agreement
among a Fund or series of a Fund, the Custodian and any futures commission
merchant.
Section
1.23. "Proper Instructions" shall mean: (i) either a tested telex or a written
(including, without limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by or on behalf of the
applicable Fund or series of a Fund by one
| 4 |
or
more Authorized Persons; (ii) a telephonic or other oral communication by one or
more Authorized Persons; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) by or on behalf of the applicable Fund that is
transmitted in compliance with the security procedures established for such
communications by the Custodian and the Fund; provided, however, that communications
purporting to be given by an Authorized Person shall be considered Proper
Instructions only if the Custodian reasonably believes such communications to
have been given by an Authorized Person with respect to the transaction
involved. Proper Instructions shall include all information necessary to permit
the Custodian to fulfill its duties and obligations thereunder. Proper
Instructions provided by facsimile transmission or under subsection (ii) shall
be subject to a commercially reasonable authentication procedure, such as call
back.
Section
1.24. "Property" shall mean any securities or other assets of a Fund or series
that are accepted by the Custodian for safekeeping, or cash accepted by the
Custodian for deposit on behalf of a Fund or series of a Fund.
Section
1.25. "Securities System" shall mean (i) the Depository Trust Company, including
its Mortgage Backed Securities Division and/or (ii) any book-entry system as
provided in (1) Subpart O of Treasury Circular ▇▇. ▇▇▇, ▇▇ ▇▇▇ ▇▇▇, (▇)
▇▇▇▇▇▇▇ ▇ of 31 CFR Part 350, (3) the book-entry regulations of federal agencies
substantially in the form of Subpart ), (4) any other domestic clearing agency
registered with the Commission under Section 17A of the Securities Exchange Act
of 1934, as amended, which acts as a securities depository. Each such Securities
System shall be approved by each Fund's Board.
Section
1.26. "Segregated Account" shall mean an account established for and on behalf
of a Fund in which may be held Property that is maintained: (i) for the purposes
set forth in Section 3.08, 3.09, and 3.10, hereof; (ii) for the purposes of
compliance by the Fund with the
| 5 |
procedures
required by Investment Company Act Release No. 10666, or any subsequent release
or releases of the Commission relating to the maintenance of Segregated Accounts
by registered investment companies, or (iii) for any other lawful purposes as
may be deemed necessary by the Fund.
Section
1.27. "Series" shall mean the one or more series of shares into which a Fund may
be organized, each of which shall represent an interest in a separate portfolio
of Property and shall include all of the existing and additional Series now or
hereafter listed on Schedule A.
Section
1.28. "Shareholder Servicing Agent" shall mean a Fund's transfer agent or person
performing comparable duties.
Section
1.29. "Shares" shall mean all classes of shares of a Fund or
Series.
Section
1.30. "Subcustodian" shall mean any duly appointed Domestic Subcustodian or
Foreign Subcustodian.
Section
1.31. "Terminating Fund" shall mean a Fund or Series that has terminated the
Agreement with the Custodian or as to which the Custodian has terminated the
Agreement, all in accordance with the provisions of Section 8.01.
ARTICLE
II.
APPOINTMENT
OF CUSTODIAN
Each
Fund hereby appoints the Custodian as custodian and as Foreign Custody Manager
for the term and subject to the provisions of this Agreement. Custodian's duties
and obligations as Foreign Custody Manager and with respect to Eligible
Securities Depositories shall be as set forth in this Agreement, including
Schedule B hereto. Each Fund shall deliver to the Custodian or a Subcustodian,
or shall cause to be delivered to the Custodian or a Subcustodian, Property
| 6 |
owned
by such Fund and, where applicable, shall specify to which of its Series such
Property is to be specifically allocated.
ARTICLE
III.
POWERS
AND DUTIES OF CUSTODIAN
With
respect to Property of each Fund or Series, the Custodian shall have and perform
the following powers and duties:
Section
3.01. Safekeeping. The Custodian
shall from time to time receive delivery of Property of a Fund or Series and
shall maintain, hold and, with respect to Property that is not cash, keep safely
all Property of each Fund or each Series that has been delivered to and accepted
by the Custodian. Custodian shall accept and maintain Property received in the
form of cash as a deposit obligation of the Custodian or a
Subcustodian.
Section
3.02. Manner of Holding
Securities.
(a) The
Custodian shall at all times hold securities of each Fund or Series (i) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (ii) in book-entry form by a
Securities System or by a transfer agent or registrar of another investment
company (an "Underlying Fund System"), or (iii) with respect to Loans, by
possession of all documents, certificates and other such instruments, including
any schedule of payments ("Financing Documents") as are delivered to the
Custodian.
(b) Upon
receipt of Proper Instructions, the Custodian shall open an Account in the name
of each Fund or Series and shall hold registered securities of each Fund or
Series (i) in the name or any nominee name of the Custodian, a Subcustodian or
the Fund, or (ii) in street name. In carrying out the foregoing obligation, the
Custodian shall, to the extent permitted by law and, where Custodian deems it
advisable based upon any legal advice Custodian has
| 7 |
obtained
with respect to a particular market and upon other factors the Custodian deems
appropriate, hold registered securities of each Fund or Series in a manner that
is appropriate to the Fund's tax domicile and that takes into consideration the
best interests of the Fund with respect to regulatory matters relating to
custody; and provided further that the Custodian shall, on an ongoing basis,
provide accurate information to a Fund and such other persons as a Fund may
designate with respect to the registration status of each Fund's securities, and
an accurate record of securities held by each Fund and such Fund's respective
interest therein.
(c) The
Custodian may hold Property for all of its customers, including a Fund or
Series, with any Foreign Subcustodian in an Account that is identified as
belonging to the Custodian for the benefit of its customers or in a depository
account, including an omnibus account, with an Eligible Securities Depository;
provided, however, that (i) the
records of the Custodian with respect to Property of any Fund or Series that are
maintained in such Account or depository account shall identify such Property as
belonging to the applicable Fund or Series and (ii) to the extent permitted and
customary in the market in which the Account or depository account is
maintained, the Custodian shall require that Property so held by a Foreign
Subcustodian or Eligible Securities Depository be held separately from any
assets of the Custodian or such Foreign Subcustodian.
(d) The
Custodian shall send each Fund a written statement, advice or notification of
any transfers of any Property of the Fund to or from an Account or an account at
an Eligible Securities Depository (a "depository account"). Each such statement,
advice or notification shall identify the Property transferred and the entity
that has custody of the Property. Unless a Fund provides the Custodian with a
written exception or objection to any such statement, advice or notification
within ninety (90) days of Fund's receipt thereof, the Fund shall be deemed to
have approved such statement, advice or notification. To the extent permitted by
law and the terms of
| 8 |
this
Agreement, the Custodian shall not be liable for the contents of any such
statement, advice or notification that has been approved by a Fund.
Section
3.03. Security Purchases and
Sales.
(a) Upon
receipt of Proper Instructions, insofar as funds are available for the purpose,
the Custodian shall pay for and receive securities purchased for the account of
a Fund or Series, payment being made by the Custodian only: (i) upon receipt of
the securities, certificates, or other acceptable evidence of ownership (1) by
the Custodian, or (2) by a clearing corporation of a national securities
exchange of which the Custodian is a member, (3) by a Securities System or (4)
by an Underlying Fund System; or (ii) otherwise in accordance with (1) Proper
Instructions, (2) applicable law, (3) generally accepted trading practices, or
(4) the terms of any instrument representing the purchase. With respect to a
clearing corporation or Securities System, securities may be held only with an
entity approved by a Fund's Board. Notwithstanding the foregoing, in the case of
U.S. repurchase agreements entered into by a Fund, the Custodian may release
funds to a Securities System or to a Domestic Subcustodian prior to the receipt
of advice from the Securities System or Domestic Subcustodian that the
securities underlying such repurchase agreement have been transferred by book
entry into the Account of the Custodian maintained with such Securities System
or Domestic Subcustodian, so long as such payment instructions to the Securities
System or Domestic Subcustodian require that the Securities System or Domestic
Subcustodian may make payment of such funds to the other party to the repurchase
agreement only upon transfer by book-entry of the securities underlying the
repurchase agreement into the Account. In the case of time deposits, call
account deposits, currency deposits, and other deposits, contracts or options
pursuant to Sections 3.08, 3.09, 3.11
| 9 |
and
3.12, the Custodian may not make payment therefor without receiving an
instrument or other document evidencing said deposit except in accordance with
standard industry practice.
(b) Upon
receipt of Proper Instructions, the Custodian shall make delivery of securities
that have been sold for the account of a Fund or Series, but only: (i) against
payment therefor (1) in the form of cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, (2) by credit to the Account of the
Custodian with a clearing corporation of a national securities exchange of which
the Custodian is a member, or (3) by credit to the Account of the Custodian with
a Securities System subject to final end-of-day settlement in accordance with
the rules of the applicable Securities System; or (ii) otherwise in accordance
with (1) Proper Instructions, (2) applicable law, (3) generally accepted trading
practices, or (4) the terms of any instrument representing the
sale.
(c) In
the case of the purchase or sale of securities the settlement of which occurs
outside of the United States or the receipt of which and payment therefor take
place in different countries, such securities shall be delivered and paid for in
accordance with local custom and practice generally accepted by Institutional
Clients in the applicable country or countries. In the case of securities held
in physical form, if standard industry practice in the country so requires, such
securities shall be delivered and paid for in accordance with "street delivery
custom" to a broker or its clearing agent (for example, against delivery to the
Custodian or a Subcustodian of a receipt for such securities) provided that the
Custodian shall take reasonable steps (which shall not include the institution
of legal proceedings except pursuant to Section 6.03(c)) in its discretion to
seek to ensure prompt collection of the payment for, or the return of, such
securities by the broker or its clearing agent, and provided further that the
Custodian shall not be responsible for the selection of or the failure or
inability to perform of such broker or its clearing agent.
| 10 |
Section
3.04. Exchanges of Securities.
Upon receipt of Proper Instructions, the Custodian shall, to the extent
permitted by applicable law and in accord with standard industry practice in the
relevant market, exchange securities held by the Custodian for the account of
any Fund or Series for other securities in connection with any reorganization,
recapitalization, stock split, change of par value, conversion or other event
relating to the securities or the issuer of such securities, and to deposit any
such securities in accordance with the terms of any reorganization or protective
plan. With respect to tender or exchange offers, the Custodian shall transmit
promptly to a Fund all written information actually received by the Corporate
Actions Department or other applicable department of the Custodian, or from a
Subcustodian, an Eligible Securities Depository, or a Securities System, or
directly from issuers of the securities whose tender or exchange is sought and
from the parties (or their agents) making the tender or exchange offer. If the
Fund desires to take action with respect to any tender offer, exchange offer, or
any other similar transaction, the Fund shall notify the Custodian, within a
time period set by the Custodian and communicated promptly to the Fund, prior to
the date on which the Custodian is to take such action. Without receiving such
instructions, the Custodian may surrender securities in temporary form for
definitive securities, may surrender securities for transfer into a name or
nominee name as permitted in Section 3.02(b), and may surrender securities for a
different number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the securities to
be issued will be delivered to the Custodian or nominee of the Custodian and
further provided that the Custodian shall, consistent with local market
practice, at the time of surrendering the securities or instruments (i) receive
a receipt or other instrument or document evidencing the ownership thereof or
(ii) take other reasonable steps to seek to ensure proper delivery of the
securities and adequate protection of a Fund's ownership interest in the
securities.
| 11 |
Section
3.05. Depositary Receipts. Upon
receipt of Proper Instructions, the Custodian shall instruct a Subcustodian
appointed pursuant to Article V hereof to surrender securities to the depositary
that holds securities of an issuer that are represented by DRs for such
securities against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Subcustodian that the
depositary has acknowledged receipt of instructions to issue DRs with respect to
such securities in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in [Location of
Custodian], or at such other place as the Custodian may from time to time
designate.
Upon
receipt of Proper Instructions, the Custodian shall surrender DRs to the issuer
thereof against a written receipt therefor adequately describing the DRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the DRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such DRs to a Subcustodian.
Section
3.06. Exercise of Rights; Tender
Offers. Upon receipt of Proper Instructions, the Custodian shall deliver
to the issuer or trustee thereof, or to the agent of either, warrants, puts,
calls, rights or similar securities, for the purpose of being exercised or sold,
provided that the new Property, if any, acquired by such action is to be
delivered to the Custodian, and, upon receipt of Proper Instructions, to deposit
securities upon invitations for tenders of securities, provided that the
consideration for such securities is to be paid or delivered to the Custodian,
or the tendered securities are to be returned to the Custodian. Notwithstanding
any provision of this Agreement to the contrary, the Custodian shall take all
commercially reasonable action, unless otherwise directed to the contrary in
Proper Instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security ownership
of which the Custodian has actual knowledge, and shall promptly notify each
| 12 |
applicable
Fund of such action in writing by facsimile transmission or in such other manner
as such Fund and the Custodian may agree in writing.
Section
3.07. Stock Dividends, Rights,
Etc. The Custodian shall receive and collect all stock dividends, rights,
foreign tax reclaims and other items of a like nature, and deal with the same
pursuant to Proper Instructions relative thereto. Custodian duties and
obligations under this Section 3.07 may from time to time be limited by written
agreement between the Custodian and a Fund or Series. With respect to securities
held by the Custodian in street name, Custodian's duties and obligations under
this Section 3.07 shall be limited to those stock dividends, foreign tax
reclaims and other items of a like nature that the Custodian is able, using
commercially reasonable methods (which shall not include the institution of
legal proceedings except pursuant to Section 6.03(c)) in its discretion, to
receive and collect from the record holders of such securities. The Custodian's
further duties and obligations with respect to tax reclaims shall be as set
forth in Schedule C hereto.
Section
3.08. Options. Upon receipt of
Proper Instructions and in accordance with the provisions of any agreement
between the Custodian, any registered broker-dealer and, if necessary, a Fund on
its own behalf or on behalf of any applicable Series relating to compliance with
the rules of the Options Clearing Corporation or of any registered national
securities exchange or similar organization(s), the Custodian shall: (i) receive
and retain confirmations or other documents, if any, evidencing the purchase or
writing of an option on a security or securities index by the applicable Fund or
Series; (ii) deposit and maintain Property in a Segregated Account; and (iii)
pay, release and/or transfer such Property in accordance with notices or other
communications evidencing the expiration, termination or exercise of such
options furnished by the Options Clearing Corporation, the securities or options
exchange on which such options are traded, or such other organization as may be
responsible for handling
| 13 |
such
option transactions. Each Fund or Series (severally and not jointly) and the
broker-dealer shall be responsible for the sufficiency of assets held in any
Segregated Account established in compliance with applicable margin maintenance
requirements and the performance of other terms of any option contract, or
releases of the Commission or interpretive positions of the Commission
staff.
Section
3.09. Futures Contracts. Upon
receipt of Proper Instructions, or pursuant to the provisions of any Procedural
Agreement among a Fund, the Custodian, and any futures commission merchant
regarding "margin," the Custodian shall: (i) receive and retain confirmations,
if any, evidencing the purchase or sale of a futures contract or an option on a
futures contract by the applicable Fund; (ii) segregate and maintain in a
Segregated Account Property designated as initial, maintenance or variation
margin deposits intended to secure the performance by the applicable Fund or
Series of its obligations under any futures contracts purchased or sold or any
options on futures contracts written by the Fund, in accordance with the
provisions of any Procedural Agreement designed to comply with the rules of the
Commodity Futures Trading Commission and/or any commodity exchange or contract
market (such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (iii) release assets from and/or transfer
assets into such margin accounts only in accordance with any such Procedural
Agreement. Alternatively, the Custodian may deliver assets in accordance with
Proper Instructions to a futures commission merchant for purposes of the margin
requirements in accordance with Rule 17f-6 under the Investment Company Act. If
delivery is made in accordance with Proper Instructions, Custodian shall be
deemed to have acted in accordance with Rule 17f-6. Each Fund or Series
(severally and not jointly) and such futures commission merchant shall be
responsible for the sufficiency of assets held in the Segregated
| 14 |
Account
in compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section
3.10. Borrowings. Upon receipt
of Proper Instructions, the Custodian shall deliver securities of any Fund or
Series thereof to lenders or their agents or otherwise establish a Segregated
Account at the Custodian as agreed to by the applicable Fund or Series and the
Custodian and, where applicable, any third-party lender, as collateral for
borrowings effected by such Fund, provided that such borrowed money is payable
to or upon the Custodian's order as Custodian for the applicable Fund and
concurrently with the delivery of such securities.
Section
3.11. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase Interest
Bearing Deposits for the account of a Fund or Series, the Custodian shall
purchase such Interest Bearing Deposits in the name of the Custodian on behalf
of the applicable Fund or Series with such Banking Institutions and in such
amounts as the applicable Fund or Series may direct pursuant to Proper
Instructions. Such Interest Bearing Deposits may be denominated in U.S. dollars
or other currencies, as the applicable Fund or Series may determine and direct
pursuant to Proper Instructions. The Custodian shall include in its records with
respect to the assets of each Fund or Series appropriate notation as to the
amount and currency of each such Interest Bearing Deposit, the accepting Banking
Institution and all other appropriate details, and shall receive and retain such
forms of advice or receipt, if any, evidencing such Interest Bearing Deposit as
may be forwarded to the Custodian by the Banking Institution. The
responsibilities of the Custodian to each Fund for Interest Bearing Deposits
accepted on the Custodian's books in the United States on behalf of a Fund or
Series shall be that of an U.S. bank for a similar deposit.
With
respect to Interest Bearing Deposits other than those accepted on the
Custodian's books (i) the Custodian shall be responsible for the collection of
income as set forth in Section
| 15 |
3.14
and the transmission of cash and instructions to and from such Interest Bearing
Deposit; and (ii) except upon the request of a Fund and as agreed by the
Custodian, the Custodian shall have no duty with respect to the selection of the
Banking Institution. So long as the Custodian acts in accordance with Proper
Instructions, the Custodian shall have no responsibility for the failure of such
Banking Institution to pay upon demand. As mutually agreed from time to time by
a Fund and the Custodian, the Custodian shall be responsible for the prudent
selection and monitoring of a Banking Institution. The Custodian shall not be
liable for the insolvency of any Banking Institution that is not a branch or
Affiliate of the Custodian. Upon receipt of Proper Instructions, the Custodian
shall take such commercially reasonable actions as the applicable Fund deems
necessary or appropriate to cause each such Interest Bearing Deposit to be
insured to the maximum extent possible by all applicable deposit insurers
including, without limitation, the Federal Deposit Insurance Corporation (it
being understood and acknowledged that such deposits are not eligible for
"pass-through" insurance).
Section
3.12. Foreign Exchange
Transactions.
(a) Foreign Exchange Transactions Other Than as
Principal. Upon receipt of Proper Instructions, the Custodian shall
settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf of and for the account of a
Fund or Series with such currency brokers or Banking Institutions as the
applicable Fund or Series may determine and direct pursuant to Proper
Instructions. The Custodian shall be responsible for the transmission of cash to
and receipt of cash from the currency broker or Banking Institution with which
the contract or option is made, the safekeeping of all certificates and other
documents and agreements delivered to the Custodian or a Subcustodian evidencing
or relating to such foreign exchange transactions and the maintenance of proper
records as set forth in Section 3.25. Except as agreed upon in writing by the
Custodian and a Fund from time to time, the Custodian
| 16 |
shall
have no duty under this Section 3.12(a) with respect to the selection of the
currency brokers or Banking Institutions with which the Fund or a Series deals
or, so long as the Custodian acts in accordance with Proper Instructions, for
the failure of selected brokers or Banking Institutions to comply with the terms
of any contract or option.
(b) Foreign Exchange Contracts as
Principal. The Custodian shall not be obligated to enter into foreign
exchange transactions as principal. However, if the Custodian has made available
to a Fund its services as a principal in foreign exchange transactions, upon
receipt of Proper Instructions, the Custodian shall enter as principal into
foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a Fund or
Series. When acting as principal, the Custodian shall be responsible for the
prudent selection of the currency brokers or Banking Institutions and the
failure of such currency brokers or Banking Institutions to comply with the
terms of any contract or option. In cases where the Custodian, or its
subsidiaries, Affiliates, or Subcustodians enter into a separate master foreign
exchange contract with a Fund that covers foreign exchange transactions for an
Account, the terms and conditions of that foreign exchange contract, and, to the
extent not inconsistent, this Agreement, shall apply to such
transactions.
Section
3.13. Securities Loans. Upon
receipt of Proper Instructions, the Custodian shall deliver securities of any
Fund in connection with loans of securities by such Fund, to the borrower
thereof or a securities lending agent identified by the Fund, upon, or, upon
Proper Instructions, prior to, the receipt of cash collateral, if any, for such
borrowing. In the event U.S. Government securities are to be used as collateral,
the Custodian will not release the securities to be loaned until it has received
confirmation that such collateral has been delivered to the Custodian. The
Custodian and each Fund understand that the timing of receipt of such
confirmation will normally require that the delivery of securities to be loaned
will be made one
| 17 |
day
after receipt of collateral in the form of U.S. Government securities. To the
extent the Custodian acts as lending agent for a Fund, each party's duties and
obligations with respect to that arrangement will be governed by a separate
written agreement mutually agreed upon by the Fund and the
Custodian.
Section
3.14. Collections. Consistent
with standard industry practice in the applicable market, the Custodian shall,
and shall cause any Subcustodian to, take all commercially reasonable steps
(which shall not include the institution of legal proceedings except pursuant to
Section 6.03(c)) at its discretion to: (i) collect amounts due and payable to
each Fund or Series with respect to portfolio securities and other assets of
each such Fund or Series; (ii) promptly credit to the Account of each applicable
Fund or Series all income and other payments relating to portfolio securities
and other assets held by the Custodian hereunder no later than upon Custodian's
receipt of such income or payments or as otherwise agreed in writing by the
Custodian and the applicable Fund; (iii) promptly endorse and deliver any
instruments required by standard industry practice in each market to effect such
collections; and (iv) pursuant to Proper Instructions, promptly execute
ownership and other certificates and affidavits for all federal, state and
foreign tax purposes in connection with receipt of income, capital gains or
other payments with respect to portfolio securities and other assets of each
applicable Fund or Series, or in connection with the purchase, sale or transfer
of such securities or other assets. The Custodian shall promptly notify each
applicable Fund in accordance with standard operating procedures if any amount
payable with respect to portfolio securities or other assets of the Fund or
Series is not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect to
portfolio securities or other assets that are in default. With respect to
amounts due and payable on portfolio securities held by the Custodian in street
name, Custodian's duties and obligations under this Section 3.14 shall be
| 18 |
limited
to the collection of amounts of which Custodian has actual knowledge and that it
is able, using commercially reasonable methods, to collect from the record
holder of such securities. Subject to the provisions of any separate written
agreement entered into by the Custodian and a Fund pursuant to Section 3.13,
income due each Fund or Series on securities loaned shall be the responsibility
of such Fund or Series, provided that the Custodian shall use all commercially
reasonable methods to assist the Fund or Series to collect such
income.
Section
3.15. Dividends, Distributions and
Redemptions. Upon receipt of Proper Instructions, the Custodian shall
promptly release funds or securities to the Shareholder Servicing Agent or
otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of Proper
Instructions, the Custodian shall release funds or securities, insofar as
available, to the Shareholder Servicing Agent or as such Shareholder Servicing
Agent shall otherwise instruct for payment to Fund shareholders who have
delivered to such Shareholder Servicing Agent a request for repurchase or
redemption of their shares of capital stock of such Fund.
Section
3.16. Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments received for Shares
issued or sold from time to time by a Fund or Series and shall promptly credit
such funds to the Account(s) of the applicable Fund or Series. The Custodian
shall promptly notify each applicable Fund or Series of Custodian's receipt of
cash in payment for Shares issued by such Fund or Series by facsimile
transmission or in such other manner as the Fund or Series and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian shall: (i)
deliver all federal funds received by the Custodian in payment for Shares in
payment for such investments as may be set forth in such Proper Instructions and
at a time agreed upon between the Custodian and the applicable Fund or Series;
and (ii) make federal funds received by the Custodian available to the
applicable Fund or Series
| 19 |
as
of specified times agreed upon from time to time by the applicable Fund or
Series and the Custodian, in the amount received in payment for Shares which are
deposited to the Accounts of each applicable Fund or Series.
Section
3.17. Proxies, Notices, Etc. The
Custodian shall provide each Fund or Series with proxy services in accordance
with the terms and conditions set forth in Schedule D to this
Agreement.
Section
3.18. Bills and Other
Disbursements. Upon receipt of Proper Instructions, the Custodian shall
pay or cause to be paid, insofar as funds are available for the purpose, bills,
statements, or other obligations of each Fund or Series.
Section
3.19. Nondiscretionary
Functions. The Custodian shall attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities or other assets of each Fund held by the Custodian,
except as otherwise directed from time to time pursuant to Proper
Instructions.
Section
3.20. Bank
Accounts.
(a) Accounts with the Custodian and any
Subcustodians. The Custodian shall open and operate a Bank Account on the
books of the Custodian or any Subcustodian or a Banking Institution other than
the Custodian or any Subcustodian provided that such Bank Account(s) shall be in
the name of the Custodian or a nominee of the Custodian, for the account of a
Fund or Series, and shall be subject only to the draft or order of the
Custodian; provided, however, that such Bank Accounts in countries other than
the United States may be held in an Account of the Custodian containing only
assets held by the Custodian as a fiduciary or custodian for customers, and
provided further, that the records of the Custodian shall indicate at all times
the Fund or other customer for which Property is held in such Account and the
respective interests therein. Such Bank Accounts may be denominated in either
U.S. Dollars or
| 20 |
other
currencies. The responsibilities of the Custodian to each applicable Fund or
Series for deposits accepted on the Custodian's books in the United States shall
be that of a U.S. bank for a similar deposit. The responsibilities of the
Custodian to each applicable Fund or Series for deposits accepted on any
Subcustodian's books shall be governed by the provisions of Section 6.01. ).
Except upon the request of a Fund and as agreed by the Custodian, the Custodian
shall have no duty with respect to the selection of a Banking Institution. As
mutually agreed from time to time by a Fund and the Custodian, the Custodian
shall be responsible for the prudent selection and monitoring of a Banking
Institution. The Custodian shall not be liable for the insolvency of any
Subcustodian or Banking Institution that is not a branch or Affiliate of the
Custodian.
(b) Deposit Insurance. Upon receipt of
Proper Instructions, the Custodian shall take such commercially reasonable
actions as the applicable Fund deems necessary or appropriate to cause each
deposit account established by the Custodian pursuant to this Section 3.20 to be
insured to the maximum extent possible by all applicable government deposit
insurers including, without limitation, the Federal Deposit Insurance
Corporation.
Section
3.21. Deposit of Fund Assets in
Securities Systems. The Custodian may deposit and/or maintain securities
owned by a Fund or Series in a Securities System provided that such Fund's Board
has specifically approved such Securities System prior to its use. Use of a
Securities System shall be in accordance with applicable Federal Reserve Board
and Commission rules and regulations, if any, and Custodian's duties and
obligations with respect to securities deposited or maintained therein will at
all times be subject to the rules and procedures of the applicable Securities
System. To the extent permitted by the foregoing, use of a Securities System
shall also be subject to the following provisions:
| 21 |
(a) The
Custodian may deposit and/or maintain Fund securities, either directly or
through one or more Subcustodians appointed by the Custodian (provided that any
such Subcustodian shall be qualified to act as a custodian of such Fund pursuant
to the Investment Company Act and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an Account of
the Custodian or such Subcustodian in the Securities System, which Account shall
not include any assets of the Custodian or Subcustodian other than assets held
as a fiduciary, custodian, or otherwise for customers and shall be so designated
on the books and records of the Securities System.
(b) The
Securities System shall be obligated to comply with the directions of the
Custodian or Subcustodian, as the case may be, with respect to the securities
held in such Account.
(c) Each
Fund or Series hereby designates the Custodian, or the Custodian's or Securities
System's nominee, as the case may be, as the party in whose name or nominee name
any securities deposited by the Custodian in the Account at the Securities
System are to be registered.
(d) The
books and records of the Custodian with respect to securities of a Fund or
Series that are maintained in a Securities System shall identify by book-entry
those securities belonging to the Fund or Series.
(e) Upon
receipt of Proper Instructions and subject to the provisions of Section 3.03,
the Custodian shall pay for securities purchased for the account of any Fund or
Series upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account of the Custodian, and (ii) the
making of an entry on the records of the Custodian to reflect such payment and
transfer for the account of such Fund or Series. The Custodian shall transfer
securities sold for the account of any Fund or Series upon (i) receipt of
| 22 |
an
advice from the Securities System that payment for such securities has been
transferred to the Account of the Custodian, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and payment for the
account of such Fund or Series. Copies of all advices from the Securities System
of transfers of securities for the account of a Fund or Series shall identify
the Fund or Series, be maintained for the Fund or Series by the Custodian or
Subcustodian as referred to in Section 3.21(a), and be provided to the Fund or
Series at its request. The Custodian shall furnish to each Fund or Series
confirmation of each transfer to or from the account of such Fund or Series in
the form of a written report or notice and shall furnish to each Fund or Series
copies of daily transaction reports reflecting each day's transactions in the
Securities System for the account of that Fund or Series on the next succeeding
Business Day. Such transaction reports shall be delivered to each applicable
Fund or Series, or any Subcustodian designated by such Fund or Series, pursuant
to Proper Instructions by computer or in any other manner as such Fund or Series
and the Custodian may agree in writing.
(f) The
Custodian shall provide each Fund with any report obtained by the Custodian or
Subcustodian as referred to in Section 3.21(a) on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(g) Upon
receipt of Proper Instructions, the Custodian shall terminate the use of any
such Securities System on behalf of that Fund or Series as promptly as
practicable and shall take all actions reasonably practicable to safeguard the
securities of any Fund or Series maintained with such Securities
System.
Section
3.22. Maintenance of Assets in
Underlying Fund Systems. The Custodian may maintain securities owned by
each Fund or Series by book-entry in an Underlying Fund System provided that the
Custodian's books and records identify the specific type and amount of
| 23 |
securities
so held and the Custodian reconciles those records against the book-entry
records of the Underlying Fund System on a monthly basis.
Section
3.23. Other Transfers. Upon
receipt of Proper Instructions, the Custodian shall deliver securities, funds
and other Property of each Fund to a Subcustodian or another custodian of such
Fund; and, upon receipt of Proper Instructions, make such other disposition of
securities, funds or other Property of such Fund in a manner other than, or for
purposes other than, as enumerated elsewhere in this Agreement, provided that
Proper Instructions relating to such disposition shall include a statement of
the amount of securities to be delivered and the name of the person or persons
to whom delivery is to be made.
Section
3.24. Establishment of Segregated
Account(s). Upon receipt of Proper Instructions, the Custodian shall
establish and maintain on its books a Segregated Account for and on behalf of a
Fund or Series in which Segregated Account may be held Property of such Fund or
Series, including securities maintained by the Custodian in a Securities System
pursuant to Section 3.21 hereof, said Segregated Account to be maintained: (i)
for the purposes set forth in Section 3.08, 3.09, and 3.10, hereof; (ii) for the
purposes of compliance by the Fund with the procedures required by Investment
Company Act Release No. 10666 (pub. avail. Apr. 18, 1979), or any subsequent
release or releases of the Commission relating to the maintenance of Segregated
Accounts by registered investment companies, or (iii) for any other lawful
purposes as may be deemed necessary by the Fund.
Section
3.25. Custodian's Books and
Records. The Custodian shall provide any assistance reasonably requested
by a Fund in the preparation of reports to such Fund's shareholders and others,
audits of accounts, and other ministerial matters of like nature. The Custodian
shall maintain complete and accurate records with respect to securities and
other assets held for the account of each Fund or Series as required by the
rules and regulations of the
| 24 |
Commission
applicable to investment companies registered under the Investment Company Act,
including, without limitation: (i) journals or other records of original entry
containing a detailed and itemized daily record of all receipts and deliveries
of securities (including certificate and transaction identification numbers, if
any), and all receipts and disbursements of cash; (ii) ledgers or other records
reflecting (1) securities in transfer, (2) securities in physical possession,
(3) securities borrowed, loaned or collateralizing obligations of each Fund, (4)
monies borrowed and monies loaned (together with a record of the collateral
therefor and substitutions of such collateral), (5) dividends and interest
received, (6) the amount of tax withheld by any person in respect of any
collection made by the Custodian or any Subcustodian, and (7) the amount of
reclaims or refunds for foreign taxes paid; and (iii) canceled checks and bank
records related thereto. The Custodian shall keep such other books and records
of each Fund or Series as such Fund or Series shall reasonably request and
Custodian shall agree, which agreement shall not be unreasonably withheld. All
such books and records maintained by the Custodian shall be maintained in a form
acceptable to the applicable Fund or Series and in compliance with the rules and
regulations of the Commission, including, but not limited to, books and records
required to be maintained by Section 31(a) of the Investment Company Act and the
rules and regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be available upon reasonable prior notice during normal business hours for
inspection and use by such Fund or Series and its agents, including, without
limitation, its independent certified public accountants. Notwithstanding the
preceding sentence, no Fund or Series shall take any actions or cause the
Custodian to take any actions that would cause the Custodian, either directly or
indirectly, to violate any applicable laws, regulations or orders.
| 25 |
Section
3.26. Opinion of Fund's Independent
Certified Public Accountants. The Custodian shall take all commercially
reasonable actions as a Fund may request to obtain from year to year favorable
opinions from such Fund's independent certified public accountants with respect
to the Custodian's activities hereunder in connection with the preparation of
the Fund's Form N-1A and the Fund's Form N-SAR or other periodic reports to the
Commission and with respect to any other requirements of the
Commission.
Section
3.27. Reports by Independent Certified
Public Accountants. At the request of a Fund, the Custodian shall deliver
to such Fund a written report prepared by the Custodian's independent certified
public accountants with respect to the custodial services provided by the
Custodian under this Agreement, including, without limitation, the Custodian's
accounting system, internal accounting controls and procedures for safeguarding
Property, including Property deposited and/or maintained in a Securities System
or Eligible Securities Depository or with a Subcustodian. Such report shall be
of sufficient scope and in sufficient detail as may reasonably be required by
any Fund and as may reasonably be obtained by the Custodian. Delivery by the
Custodian of its then current SAS 70 Report shall constitute compliance with
this Section 3.27.
Section
3.28. Overdrafts. In the event
that the Custodian is directed by Proper Instructions to make any payment or
transfer of funds on behalf of a Fund for which there are, at the close of
business on the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Fund, the Custodian may, in its discretion, provide
an Overdraft to the applicable Fund, in an amount sufficient to allow the
completion of such payment. Overdrafts may also arise by reason of the
Custodian's reversal of any provisional credit extended to a Fund. Any Overdraft
provided hereunder (i) shall be payable on demand or at such time as shall be
agreed upon by the applicable Fund and the Custodian; and (ii) shall accrue
| 26 |
interest
from the date of the Overdraft to the date of payment in full by the applicable
Fund at a rate agreed upon in writing, from time to time, by the Custodian and
the applicable Fund. The Custodian and each Fund acknowledge that the purpose of
such Overdrafts is to support on a temporary basis the purchase or sale of
securities for prompt delivery in accordance with the terms hereof, or to meet
emergency cash needs not reasonably foreseeable by such Fund. The Custodian
shall promptly provide an Overdraft Notice of any Overdraft by facsimile
transmission or in such other manner as such Fund and the Custodian may agree in
writing. If, pursuant to Proper Instructions, a Fund or Series requests the
Custodian to take any action with respect to securities, which action involves
the payment of money or which action may, in the reasonable opinion of the
Custodian, result in the Custodian or its nominee assigned to the Fund or Series
being liable for the payment of money or incurring liability in some other form,
the Fund, or the Fund on behalf of a Series, shall, as a prerequisite to the
Custodian agreeing to take such action, provide indemnity to the Custodian in an
amount and form satisfactory to the Fund and the Custodian.
Section
3.29. Reimbursement for
Advances. If, in carrying out Proper Instructions, the Custodian advances
cash or securities or makes any payment from Custodian's own funds for any
purpose for the benefit of a Fund or Series, including the purchase or sale of
foreign exchange or of contracts for foreign exchange, or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from the Custodian's or its
nominee's own negligence, fraud, willful default or willful misconduct, any
Property held for the account of that Fund or Series shall be security for such
advance or payment in an amount not to exceed the amount of such advance or
payment. If the applicable Fund or Series fails to promptly repay the advance,
the Custodian shall be entitled to use such Fund's or Series' available cash and
to dispose of the
| 27 |
Property
of such Fund or Series to the extent necessary to obtain reimbursement in full
for the amount of such advance or payment. The security interest granted to the
Custodian under this Section 3.29 shall apply to all advances provided by the
Custodian to a Fund or Series, including Overdrafts as defined in Section 1.19
and intraday overdrafts that arise and are settled during the same Business Day,
for the period during which any such advance remains outstanding.
Section
3.30. Claims. The Custodian
agrees that all claims upon a Fund with respect to subjects covered by the
attached Schedule E shall be made in accordance with Schedule E. In the event
that the Custodian needs to make a claim against a Fund pursuant to Schedule E,
the Custodian must make such claim within ninety (90) Business Days of the event
causing the necessary claim, or within such other period as may be mutually
agreed upon from time to time by the Custodian and a Fund. Claims not covered by
Schedule E shall be made within such period as may be mutually agreed upon from
time to time by the Custodian and a Fund. The applicable Fund will research the
cause and make payment if applicable, or forward the claim to the appropriate
party.
ARTICLE
IV.
PROPER
INSTRUCTIONS AND RELATED MATTERS
Section
4.01. Proper
Instructions.
(a) Oral Communications. Proper
Instructions in the form of oral communications shall be confirmed on the same
day as such instructions are given by the applicable Fund or Series by tested
telex or in a writing (including a facsimile transmission) signed or initialed
by or on behalf of the applicable Fund or Series by one or more Authorized
Persons, but the lack of such confirmation shall in no way affect any action
taken by the Custodian in reasonable reliance upon such oral instructions prior
to the Custodian's receipt of
| 28 |
such
confirmation. Each Fund and the Custodian are hereby authorized to record any
and all telephonic or other oral instructions communicated to the
Custodian.
(b) Form of Proper Instructions. Proper
Instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions. Proper
Instructions may be transmitted electronically or by computer, provided that a
Fund or Series has followed any relevant security procedures agreed to from time
to time by the Fund and the Custodian. Each Fund shall be responsible for
safeguarding any testkeys, identification codes or other security devices that
the Custodian makes available to the Fund. The Custodian shall be without
liability for relying on any instruction, including any instruction transmitted
via facsimile, that it reasonably believes to be a Proper
Instruction.
(c) Address for Proper Instructions.
Proper Instructions shall be delivered to the Custodian at the address and/or
telephone, telecopy or telex number, or appropriate electronic address, agreed
upon from time to time by the Custodian and the applicable Fund.
Section
4.02. Authorized Persons.
Concurrently with the execution of this Agreement and from time to time
thereafter, as appropriate, each Fund shall deliver to the Custodian, duly
certified as appropriate by a Treasurer or Secretary of such Fund, a certificate
setting forth the names, titles, signatures and scope of authority of Authorized
Person(s) of such Fund. Such certificate may be accepted and relied upon by the
Custodian as conclusive evidence of the facts set forth therein and shall be
considered to be in full force and effect until delivery to the Custodian of a
similar certificate to the contrary. Upon delivery of a certificate that deletes
the name(s) of a person previously authorized by a Fund to give Proper
Instructions, such persons shall no longer be considered an Authorized Person or
authorized to issue Proper Instructions for that Fund and the Custodian shall
promptly notify the Fund of any outstanding notice, request, direction,
instruction, certificate or instrument(s) signed by such person on behalf of
such Fund.
| 29 |
Section
4.03. Persons Having Access to Assets
of the Fund or Series. Notwithstanding anything to the contrary contained
in this Agreement, no Authorized Person, Director, Trustee, officer, employee or
agent of any Fund or Series shall have physical access to the assets of the Fund
or Series held by the Custodian nor shall the Custodian deliver any assets of
such Fund or Series for delivery to an account the Custodian knows or should
know to be the account of such person; provided, however, that nothing in this
Section 4.03 shall prohibit (i) any Authorized Person from giving Proper
Instructions so long as such action does not result in delivery of or access to
assets of any Fund or Series prohibited by this Section 4.03; or (ii) each
Fund's independent certified public accountants from examining or reviewing the
assets of the Fund or Series held by the Custodian. Each Fund or Series shall
deliver to the Custodian a written certificate (duly certified by the Secretary
or Treasurer of the Fund) identifying all Authorized Persons, Directors,
Trustees, officers, employees and agents of such Fund or Series.
Section
4.04. Actions of Custodian Based on
Proper Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions and (b) the terms of this Agreement,
the Custodian shall not be responsible for the title, validity or genuineness of
any property, or evidence of title thereof, received by it or delivered by it
pursuant to this Agreement.
ARTICLE
V.
SUBCUSTODIANS
The
Custodian may, from time to time, in accordance with the relevant provisions of
this Article V, select and appoint one or more Domestic Subcustodians and/or
Foreign Subcustodians to act on behalf of a Fund or Series.
Section
5.01. Domestic Subcustodians.
Upon receipt of Proper Instructions and in accordance therewith, the Custodian
may from time to time select and appoint one or more
| 30 |
Domestic
Subcustodians to hold and maintain Property of a Fund or a Series in the United
States. The Custodian may also, at any time and from time to time, without
instructions from a Fund or Series, appoint a Domestic Subcustodian; provided, that, the Custodian shall notify each
applicable Fund in writing of the identity and qualifications of any proposed
Domestic Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and such Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of the
appointment of such Domestic Subcustodian. If, following notice by the Custodian
to each applicable Fund regarding appointment of a Domestic Subcustodian and the
expiration of thirty (30) days after the date of such notice, such Fund shall
have failed to notify the Custodian of its disapproval thereof, the Custodian
may, in its discretion, appoint such proposed Domestic Subcustodian as its
Subcustodian.
Section
5.02. Foreign Subcustodians. The
Custodian may, at any time and from time to time, select and appoint a Foreign
Subcustodian, subject to the provisions of the I7f-5 Procedures and Guidelines
included in Schedule B attached hereto. Each Foreign Subcustodian and the
countries where it may hold securities and other assets of the applicable Funds
shall be listed on Schedule F attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.06 hereof. Each Fund shall
be responsible for informing the Custodian sufficiently in advance of a proposed
investment of the Fund or one of its Series that is to be held in a country in
which no Foreign Subcustodian is authorized to act, in order that there shall be
sufficient time for the Custodian (i) to effect the appropriate arrangements
with a proposed foreign subcustodian or (ii) to determine in its sole discretion
and timely inform the Fund that such appropriate arrangements are not available
through the Custodian.
Section
5.03. Termination of a
Subcustodian. The Custodian shall monitor each Domestic Subcustodian and
Foreign Subcustodian on a continuing basis and shall take all
| 31 |
reasonable
actions to ensure that each such Subcustodian performs all of its obligations in
accordance with the terms and conditions of the subcustodian agreement between
the Custodian and such Subcustodian. In the event that the Custodian determines
that a Subcustodian has failed to substantially perform its obligations
thereunder, the Custodian shall promptly notify each applicable Fund of such
failure to perform. Upon receipt of Proper Instructions, the Custodian shall
terminate a Subcustodian with respect to a Fund and either (i) select and
appoint in its sole discretion a replacement Subcustodian in accordance with the
provisions of Section 5.01 or Section 5.02, as the case may be, or (ii)
determine in its sole discretion and inform the Fund in a timely manner that
appropriate alternate arrangements are not available through the Custodian. In
addition to the foregoing, the Custodian may, at any time in its discretion,
upon written notification to each applicable Fund, terminate any Domestic
Subcustodian or Foreign Subcustodian.
Section
5.04. Eligible Securities
Depositories. The Custodian or a Subcustodian may at any time and from
time to time place and maintain Property of a Fund or Series with an Eligible
Securities Depository subject to the provisions of this Agreement, including the
17f-7 Procedures and Guidelines included in Schedule B. Each Eligible Securities
Depository through which the Custodian or any Subcustodian may hold securities
and other assets of the Funds shall be listed on Schedule G attached hereto, as
it may be amended from time to time. Each Fund or Series and the Custodian
understand and acknowledge that a Fund or Series may maintain Property with an
Eligible Securities Depository prior to the receipt of the initial risk analysis
required by Schedule B and prior to its inclusion on Schedule G; provided,
however, that such analysis shall be completed by the Custodian and provided to
the Fund or Series as soon as practicable after such Property is placed with the
Eligible Securities Depository.
| 32 |
ARTICLE
VI.
STANDARD
OF CARE; INDEMNIFICATION
Section
6.01. Standard of
Care.
(a) General Standard of Care. The
Custodian shall be responsible for the performance only of those duties and
obligations set forth in this Agreement, including any Schedules or Appendices
hereto, and/or in Proper Instructions, and shall have no implied duties or
obligations hereunder. The Custodian shall exercise reasonable care, diligence,
and prudence in carrying out all of these duties and obligations. The Custodian
shall be liable to each Fund or Series for all losses, damages and expenses
suffered or incurred by such Fund or Series as a direct result of the failure of
the Custodian to exercise such reasonable care, diligence and prudence, or as a
result of the negligence, fraud, willful default or willful misconduct of the
Custodian.
(b) General Limitation on Liability. The
Custodian shall have no liability for any indirect, consequential, special or
speculative losses, damages, or expenses incurred by a Fund or Series even if
Custodian has been advised of the possibility of same and regardless of the form
of action. The Custodian shall not be liable for any loss that results from (i)
the general risk of investing or (ii) the risk of investing or holding assets in
a particular country. The Custodian shall not be liable for the insolvency of a
Securities System or Eligible Securities Depository, nor shall the Custodian be
liable for the insolvency of any Subcustodian that is not a branch or Affiliate
of the Custodian unless the Custodian was negligent in the appointment of such
Subcustodian. The Custodian also shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from, or caused by, force majeure,
including but not limited to, nationalization, expropriation, or other
governmental actions such as currency restrictions or devaluations, strikes or
| 33 |
work
stoppages (except with respect to employees of the Custodian or a branch or
affiliate of the Custodian), insurrection, revolution, acts of war or terrorism,
or acts of God.
(c) Actions Prohibited by Applicable Law,
Etc. In no event shall the Custodian incur liability hereunder if any
Person is prevented, forbidden or delayed from performing, or omits to perform,
any act that this Agreement provides shall be performed or omitted to be
performed, by reason of: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or of
any foreign country, or political subdivision thereof or of any court of
competent jurisdiction; or (ii) any act of God or war or other similar
circumstance beyond the control of the Custodian, unless and to the extent that,
in each case, such delay or nonperformance is caused by (1) the negligence,
fraud, willful default or willful misconduct of the applicable Person, or (2) a
malfunction or failure of equipment operated or used by the applicable Person
other than a malfunction or failure beyond such Person's control that could not
reasonably be anticipated and/or prevented by such Person.
(d) Mitigation by Custodian. Upon the
occurrence of any event that causes or that the Custodian believes or a Fund
reasonably believes will imminently cause any loss, damage or expense to any
Fund or Series, the Custodian (i) shall take and (ii) shall take all reasonable
steps to cause any applicable Domestic Subcustodian or Foreign Subcustodian to
take all commercially reasonable steps to mitigate the effects of such event and
to avoid continuing harm to a Fund or Series. If the Custodian must seek Proper
Instructions from a Fund or Series in order either to take such commercially
reasonable steps itself or to take all reasonable steps to cause any applicable
Domestic Subcustodian or Foreign Subcustodian to take all commercially
reasonable steps and timely requests such Proper Instructions, but the
applicable Fund or Series
| 34 |
does
not provide such Proper Instructions, the Custodian (both as to itself and with
respect to any applicable Subcustodian) shall have no further obligations under
this Section 6.01(d).
(e) Advice of Counsel. The Custodian shall
be entitled to receive and act upon advice of counsel on all matters. The
Custodian shall be without liability for any action reasonably taken or omitted
in good faith pursuant to the advice of (i) counsel for the applicable Fund or
Funds, or (ii) at the expense of the Custodian, such other counsel as the
Custodian may choose; provided, however, with respect to the performance of any
action or omission of any action upon such advice, the Custodian shall be
required to conform to the standard of care set forth in Section
6.01(a).
(f) Liability for Past Records. The
Custodian shall have no liability in respect of any loss, damage or expense
suffered by a Fund, insofar as such loss, damage or expense arises from the
performance of the Custodian's duties hereunder by reason of the Custodian's
reliance upon records that were maintained for such Fund by entities other than
the Custodian prior to the Custodian's appointment as custodian for such
Fund.
(g) Authorization to Take Action. Subject
to the provisions of this Agreement, each Fund or Series authorizes the
Custodian to take such actions as may be necessary to fulfill Custodian's duties
and obligations under this Agreement notwithstanding that Custodian or any of
its divisions or Affiliates may have a material interest in a transaction or
circumstances are such that Custodian may have a potential conflict of duty or
interest in connection with a transaction, including a conflict arising from the
fact that the Custodian or any of its Affiliates may provide brokerage services
to other customers, act as financial adviser to the issuer of Property, act as a
lender to the issuer of Property, act as agent for more than one customer in the
same transaction, have a material interest in the issuance of Property or earn
profits from any of the activities set forth above.
| 35 |
Section
6.02. Liability of Custodian for
Actions of Other Persons.
(a) Domestic Subcustodians and Foreign
Subcustodians. The Custodian shall be liable for the actions or omissions
of any Domestic Subcustodian selected by the Custodian, or, subject to the
provisions of the Rule 17f-5 Procedures and Guidelines included in Schedule B,
any Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. If a Fund directs the Custodian to appoint a
specific Domestic Subcustodian, the Custodian shall, with respect to such
Domestic Subcustodian, be responsible only for losses arising from its own
negligence, fraud, willful default or willful misconduct. In the event of any
loss, damage or expense suffered or incurred by a Fund caused by or resulting
from the actions or omissions of any Domestic Subcustodian or Foreign Subcustodi
an for which the Custodian is liable, the Custodian shall reimburse such Fund in
the amount of any such loss, damage or expense.
(b) Securities Systems. Notwithstanding
the provisions of Sections 6.01 and 6.02(a) to the contrary, the Custodian shall
only be liable to a Fund for any loss, damage or expense suffered or incurred by
such Fund resulting from the use by the Custodian or a Subcustodian of a
Securities System to the extent the Custodian or Subcustodian, as applicable, is
able to recover from the Securities System, unless such loss, damage or expense
is caused by, or results from, the Custodian's or Subcustodian's negligence,
fraud, willful default or willful misconduct in its interactions with the
Securities System; provided, however, that in the event of any such loss, damage
or expense, the Custodian shall, or cause its Subcustodians to, take all
commercially reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Fund.
(c) Eligible Securities Depositories. With
respect to Eligible Securities Depositories, the Custodian shall be responsible
only for those duties and obligations set forth in
| 36 |
the
17f-7 Procedures and Guidelines included in Schedule B to this Agreement
pursuant to the requirements of Rule 17f-7 under the Investment Company Act. The
Custodian shall exercise reasonable care, diligence and prudence in carrying out
its duties and responsibilities with respect to Eligible Securities
Depositories.
(d) Reimbursement of Expenses. Each Fund
shall reimburse the Custodian for all reasonable out-of-pocket expenses incurred
by the Custodian on behalf of such Fund in connection with the fulfillment of
its obligations under this Section 6.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from the
negligence, fraud, willful default or willful misconduct of the
Custodian.
Section
6.03. Indemnification.
(a) Indemnification Obligations. Subject
to the limitations set forth in this Agreement, each Fund or Series severally
and not jointly agrees to indemnify and hold harmless the Custodian and its
nominees, directors, officers, agents, and employees (collectively, the
"Indemnitees") from all loss, damage and expense (including reasonable
attorneys' fees), including but not limited to those arising out of claims of
negligence made by third parties, suffered or incurred by the Indemnitees
arising out of or related to actions taken by the Custodian on behalf of such
Fund or Series in the performance of its duties and obligations under this
Agreement; provided, however, that such indemnity shall not
apply to any loss, damage and expense arising out of or related to the
negligence, fraud, willful default or willful misconduct of any Indemnitee or to
any consequential, special, or speculative loss, damage or expense. In addition,
each Fund or Series agrees severally and not jointly to indemnify any Person
against any liability incurred by reason of taxes assessed to such Person, or
other loss, damage or expenses incurred by such Person, resulting solely from
the fact that securities and other property of such Fund or Series are
registered in the name of such Person; provided, however, that in no
| 37 |
event
shall such indemnification be applicable to income, franchise or similar taxes
that may be imposed or assessed against any Person.
(b) Notice of Litigation, Right to Prosecute,
Etc. No Fund or Series shall be liable for indemnification for
losses or expenses arising out of litigation against an Indemnitee under this
Section 6.03 if such Indemnitee shall have failed promptly to notify such Fund
in writing of the commencement of any litigation or proceeding brought against
such Indemnitee in respect of which indemnity may be sought under this Section
6.03 to the extent that such failure to notify shall have had a material adverse
effect on such Fund or Series. With respect to claims in such litigation or
proceedings for which indemnity by a Fund may be sought and subject to
applicable law and the ruling of any court of competent jurisdiction, such Fund
shall be entitled to participate in any such litigation or proceeding and, after
written notice from such Fund to any Indemnitee, such Fund may assume the
defense of such litigation or proceeding with counsel of its choice at its own
expense in respect of that portion of the litigation for which such Fund may be
subject to an indemnification obligation; provided, however, an Indemnitee shall
be entitled to participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if such Fund has not acknowledged
in writing its obligation to indemnify the Indemnitee with respect to such
litigation or proceeding. If such Fund is not permitted to participate in or
control such litigation or proceeding under applicable law or by a ruling of a
court of competent jurisdiction, such Indemnitee shall reasonably prosecute such
litigation or proceeding. An Indemnitee shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing each applicable Fund with adequate notice of any such
settlement or judgment, and without each such Fund's prior written consent,
which consent shall not be unreasonably withheld. All Indemnitees shall submit
written evidence to each applicable Fund with respect to any cost or expense for
which they are seeking
| 38 |
indemnification
in such form and detail as such Fund may reasonably request. With respect to the
Custodian., if a Fund has acknowledged in writing its obligation to indemnify
the Custodian, the Fund shall not settle for other than monetary damages a claim
that materially affects the Custodian without the Custodian's prior written
consent.
(c) Commencement of Litigation. The
Custodian may not commence any litigation on behalf of a Fund or Series except
pursuant to Proper Instructions or with the applicable Fund's prior written
consent. Except where the Custodian is a necessary party to the litigation, a
Fund or Series shall not instruct the Custodian to commence litigation without
the Custodian's prior consent, which consent shall not be unreasonably
withheld.
Section
6.04. Fund's Right to Proceed.
Notwithstanding anything to the contrary contained herein, each Fund shall have,
at its election upon reasonable notice to the Custodian, the right to enforce,
to the extent permitted by any applicable agreement and applicable law, the
Custodian's rights against any Subcustodian, Securities System, Eligible
Securities Depository or other Person for loss, damage or expense caused such
Fund by such Subcustodian, Securities System, Eligible Securities Depository or
other Person, and shall be entitled to enforce the rights of the Custodian with
respect to any claim against such Subcustodian, Securities System, Eligible
Securities Depository or other Person, which the Custodian may have as a
consequence of any such loss, damage or expense, if and to the extent that such
Fund has not been made whole for any such loss or damage. If the Custodian makes
such Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian, Securities
System or other Person and the Fund shall provide the Custodian with reasonable
cooperation in respect of such enforcement. Upon such Fund's election to enforce
any rights of the Custodian under this Section 6.04, such Fund shall reasonably
prosecute all actions and proceedings directly relating to the rights of the
Custodian in respect of the loss,
| 39 |
damage
or expense incurred by such Fund; provided that, so long as such Fund has
acknowledged in writing its obligation to indemnify the Custodian under Section
6.03 hereof with respect to such claim, such Fund shall retain the right to
settle, compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by such Fund without the Custodian's consent
and, provided further, that if such Fund has not made an acknowledgement of its
obligation to indemnify, such Fund shall not settle, compromise or terminate any
such action or proceeding without the written consent of the Custodian, which
consent shall not be unreasonably withheld or delayed. The Custodian agrees to
cooperate with each Fund and take all actions reasonably requested by such Fund
in connection with such Fund's enforcement of any rights of the Custodian. Each
Fund agrees to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of such Fund in connection with the
fulfillment of its obligations under this Section 6.04; provided, however, that
such reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, fraud, willful default or willful misconduct of the Custodian.
Each Fund agrees that it shall not settle for other than monetary damages a
claim that materially affects the Custodian without the Custodian's prior
written consent.
ARTICLE
VII.
COMPENSATION
Each
Fund shall compensate the Custodian in an amount, and at such times, as may be
agreed upon in writing, from time to time, by the Custodian and such
Fund.
| 40 |
ARTICLE
VIII.
TERMINATION
Section
8.01. Termination of Agreement as to
One or More Funds. With respect to each Fund, this Agreement shall
continue in full force and effect until the first to occur of: (i) termination
by the Custodian by an instrument in writing delivered or mailed to such Fund,
such termination to take effect not sooner than sixty (60) days after the date
of such delivery; (ii) termination by such Fund by an instrument in writing
delivered or mailed to the Custodian, such termination to take effect not sooner
than sixty (60) days after the date of such delivery; or (iii) termination by
such Fund by written notice delivered to the Custodian, based upon such Fund's
determination that there is a reasonable basis to conclude that the Custodian is
insolvent or that the financial condition of the Custodian is deteriorating in
any material respect, in which case termination shall take effect upon the
Custodian's receipt of such notice or at such later time as such Fund shall
designate. In the event of termination pursuant to this Section 8.01 by any
Fund, each Terminating Fund shall make payment of all accrued fees and
unreimbursed expenses with respect to such Terminating Fund within a reasonable
time following termination and delivery of a statement to the Terminating Fund
setting forth such fees and expenses. In the event of a termination by a Fund or
the Custodian, each Fund shall identify in any notice of termination or in a
subsequent writing, a successor custodian or custodians to which the Property of
the Terminating Fund shall, upon termination of this Agreement with respect to
such Terminating Fund, be delivered. In the event that securities and other
assets of such Terminating Fund remain in the possession of the Custodian after
the date of termination hereof with respect to such Terminating Fund owing to
failure of the Terminating Fund to appoint a successor custodian (i) the
Custodian shall be entitled to compensation for its services in accordance with
the fee schedule most recently in effect, for such period as the Custodian
retains possession of such
| 41 |
securities
and other assets, and the provisions of this Agreement relating to the duties
and obligations of the Custodian and the Terminating Fund shall remain in full
force and effect and (ii) the Custodian may (but shall be under no obligation
to), upon 30 day's written notice to the Terminating Fund appoint a successor
custodian provided that such successor custodian is eligible to hold the
Terminating Fund's assets and the Terminating Fund shall not have objected to
such appointment. In the event of the appointment of a successor custodian, it
is agreed that the Property owned by a Terminating Fund and held by the
Custodian, any Subcustodian or nominee shall be delivered to the successor
custodian; and the Custodian agrees to cooperate with such Terminating Fund in
the execution of documents and performance of other actions necessary or
desirable in order to substitute the successor custodian for the Custodian under
this Agreement. Upon the transfer of the assets of a Terminating Fund to a
successor custodian, the Custodian may deduct from such assets prior to the
transfer an amount equal to the sum of any unpaid fees or expenses to which the
Custodian is entitled by reason of its services as Custodian.
Section
8.02. Termination as to One or More
Series. This Agreement may be terminated as to one or more Series of a
Fund (but less than all Series) by delivery of an amended Schedule A deleting
such Series pursuant to Section 9.06 hereof, in which case termination as to
such deleted Series shall take effect thirty (30) days after the date of such
delivery. The execution and delivery of an amended Schedule A which deletes one
or more Series shall constitute a termination of this Agreement only with
respect to such deleted Series, shall be governed by the preceding provisions of
Section 8.01 as to the identification of a successor custodian and the delivery
of Property of the Series so deleted, and shall not affect the obligations of
the Custodian and any Fund hereunder with respect to the other Series set forth
in Schedule A, as amended from time to time.
| 42 |
ARTICLE
IX.
MISCELLANEOUS
Section
9.01. Execution of Documents,
Etc.
(a) Actions by each Fund. Upon request,
each Fund shall execute and deliver to the Custodian such proxies, powers of
attorney or other instruments as may be reasonable and necessary or desirable in
connection with the performance by the Custodian or any Subcustodian of their
respective obligations to such Fund under this Agreement or any applicable
subcustodian agreement with respect to such Fund, provided that the exercise by
the Custodian or any Subcustodian of any such rights shall in all events be in
compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of
Proper Instructions, the Custodian shall execute and deliver to each applicable
Fund or to such other parties as such Fund(s) may designate in such Proper
Instructions, all such documents, instruments or agreements as may be reasonable
and necessary or desirable in order to effectuate any of the transactions
contemplated hereby.
Section
9.02. Representative Capacity;
Nonrecourse Obligations. A copy of the articles of incorporation,
declaration of trust or other organizational document of each Fund is on file
with the secretary of the state of the Fund's formation, and notice is hereby
given that this Agreement is not executed on behalf of the directors or trustees
of any Fund as individuals, and the obligations of this Agreement are not
binding upon any of the directors, trustees, officers, shareholders or partners
of any Fund individually, but are binding only upon the Property of each Fund or
Series. The Custodian agrees that no shareholder, director, trustee, officer or
partner of any Fund may be held personally liable or responsible for any
obligations of any Fund arising out of this Agreement.
| 43 |
Section
9.03. Several Obligations of the Funds
and the Series. With respect to any obligations of a Fund on its own
behalf or on behalf of any of its Series arising out of this Agreement,
including, without limitation, the obligations arising under Sections 3.28,
6.03, 6.04 and Article VII hereof, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and property of the
applicable Fund or Series to which such obligation relates as though each Fund
had separately contracted with the Custodian by separate written instrument on
its own behalf and with respect to each of its Series.
Section
9.04. Representations and
Warranties.
(a) Representations and Warranties of Each
Fund. Each Fund hereby severally and not jointly represents and warrants
that each of the following shall be true, correct and complete with respect to
each Fund at all times during the term of this Agreement: (i) the Fund is duly
organized under the laws of its jurisdiction of organization and is registered
as an open-end management investment company or closed-end management investment
company, as the case may be, under the Investment Company Act, and (ii) the
execution, delivery and performance by the Fund of this Agreement are (1) within
its power, (2) have been duly authorized by all necessary action, and (3) will
not (a) contribute to or result in a breach of or default under or conflict with
any existing law, order, regulation or ruling of any governmental or regulatory
agency or authority, or (b) violate any provision of the Fund's articles of
incorporation, declaration of trust or other organizational document, or bylaws,
or any amendment thereof or any provision of its most recent Prospectus or, if
any, Statement of Additional Information.
(b) Representations and Warranties of the
Custodian. The Custodian hereby represents and warrants to each Fund that
each of the following shall be true, correct and complete at all times during
the term of this Agreement: (i) the Custodian is duly organized
| 44 |
under
the laws of its jurisdiction of organization and qualifies to act as a custodian
and foreign custody manager to open-end management investment companies or
closed-end investment companies, as the case may be, under the provisions of the
Investment Company Act; and (ii) the execution, delivery and performance by the
Custodian of this Agreement are (1) within its power, (2) have been duly
authorized by all necessary action, and (3) will not (a) contribute to or result
in a breach of or default under or conflict with any existing law, order,
regulation or ruling of any governmental or regulatory agency or authority, or
(b) violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section
9.05. Entire Agreement. This
Agreement constitutes the entire understanding and agreement of each Fund, on
the one hand, and the Custodian, on the other, with respect to the subject
matter hereof and, accordingly, supersedes as of the effective date of this
Agreement any custodian agreement heretofore in effect between each Fund and the
Custodian.
Section
9.06. Waivers and Amendments. No
provision of this Agreement may be waived, amended or terminated except by a
statement in writing signed by the party against which enforcement of such
waiver, amendment or termination is sought; provided, however: (i) Schedule A
listing each Fund and each Series for which the Custodian serves as custodian
may be amended from time to time to add one or more Funds or one or more Series
of one or more Funds, by each applicable Fund's execution and delivery to the
Custodian of an amended Schedule A, and the execution of such amended Schedule A
by the Custodian, in which case such amendment shall take effect immediately
upon execution by the Custodian. Schedule A may also be amended from time to
time to delete one or more Funds or one or more Series (but less than all of the
Series) of one or more Funds, by each applicable Fund's execution and delivery
to the Custodian of an amended Schedule A, in which case such amendment shall
take
| 45 |
effect
thirty (30) days after such delivery, unless otherwise agreed by the Custodian
and each applicable Fund in writing; (ii) Schedule B setting forth the
17f-5/17f-7 Procedures and Guidelines may be amended only by an instrument in
writing executed by each applicable Fund and the Custodian; (iii) Schedule C
setting forth the Custodian's duties and obligations with respect to tax
services may be amended only by an instrument in writing executed by each
applicable Fund and the Custodian; (iv) Schedule D setting forth the Custodian's
duties and obligations with respect to proxy services may be amended only by an
instrument in writing executed by each applicable Fund and the Custodian; (v)
Schedule E relating to claims may be amended only by an instrument in writing
executed by each applicable Fund and the Custodian; and (vi) Schedule F setting
forth the foreign subcustodian bank network used by each Fund or Series may be
amended by the Custodian at any time upon prompt written notice to each
applicable Fund.
Section
9.07. Interpretation. In
connection with the operation of this Agreement, the Custodian and any Fund may
agree from time to time on such provisions interpretative of or in addition to
the provisions of this Agreement with respect to such Fund as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretative or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretative
or additional provisions shall contravene any applicable federal or state
regulations or any provision of the articles of incorporation or analogous
governing document of the Fund. No interpretative or additional provisions made
as provided in the preceding sentence shall be deemed to be an amendment of this
Agreement or affect any other Fund.
| 46 |
Section
9.08. Captions. Headings
contained in this Agreement, which are included as convenient references only,
shall have no bearing upon the interpretation of the terms of the Agreement or
the obligations of the parties hereto.
Section
9.09. Governing Law. Insofar as
any question or dispute may arise in connection with this Agreement, the
provisions of this Agreement shall be construed in accordance with and be
governed by the laws of the State of New York without reference to the conflict
of laws provisions of the State of New York.
Section
9.10. Notices. Except in the
case of Proper Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided that
in the case of delivery by facsimile transmission, notice shall also be mailed
postage prepaid) to the parties at the following addresses:
1. If
to any Fund:
c/o
Merrill ▇▇▇▇▇ Investment Managers, L.P.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Telefax:
(▇▇▇) ▇▇▇-▇▇▇▇
2. If
to the Custodian:
▇▇▇▇▇
Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Telefax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
to such other address as a Fund or the Custodian may have designated in writing
to the other.
Section
9.11. Assignment. This Agreement
shall be binding on and shall inure to the benefit of each Fund severally and
the Custodian and their respective successors and assigns, provided that,
subject to the provisions of Section 8.01 hereof, neither the Custodian nor any
| 47 |
Fund
may assign this Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party.
Section
9.12. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original. With respect to each Fund, this Agreement shall become
effective when an amended Schedule A including the Fund has been signed and
delivered by such Fund to the Custodian.
Section
9.13. Confidentiality; Survival of
Obligations. 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, including non-public
personal information within the meaning of Securities and Exchange Commission
Regulation S-P, shall be used by any other party hereto solely for the purpose
of rendering 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 any bank examiner of the
Custodian or any Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation. The
provisions of this Section 9.13 and Sections 9.01, 9.02, 9.03, 9.09, 3.27,
4.01(a), 4.04, 8.01, Article VI and Article VII hereof, 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.
Section
9.14. Shareholder
Communications. Rule 14b-2 under the Securities Exchange Act of 1934, as
amended, requires banks that hold securities for the account of customers to
respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of
| 48 |
securities
of that issuer held by the bank unless the beneficial owner has expressly
objected to disclosure of this information. In order to comply with the rule,
the Custodian needs each Fund to indicate whether the Fund authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose stock the Fund owns. If a Fund tells the Custodian "no," the
Custodian will not provide this information to requesting companies. If the Fund
tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. Please indicate below whether the Funds
consent or object by checking one of the alternatives below
|
YES
[ ]
|
The
Custodian is authorized to release each Fund's name, address, and share
positions.
|
|
|
NO
[ ]
|
The
Custodian is not authorized to release each Fund's name, address, and
share positions.
|
-
SIGNATURES
FOLLOW
-
| 49 |
IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in
its name and on its behalf on the day and year first above written.
|
Each
of the Investment Companies Listed on Schedule A Attached
Hereto
|
▇▇▇▇▇
Brothers ▇▇▇▇▇▇▇▇ & Co.
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ |
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇▇ |
Name:
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
Title:
|
Treasurer |
Title:
|
Partner | |
|
Date:
|
October 26, 2001 |
Date:
|
October 26th, 2001 | |
| 50 |
SCHEDULE
B
Rule 17f-5/17f-7 Procedures
and Guidelines
The
Custodian will serve as the Foreign Custody Manager in the countries listed in
Schedule F hereto for the Funds listed on Schedule A to this Agreement pursuant
to the terms and provisions of the Agreement and Part I of these procedures
and guidelines. As Foreign Custody Manager, the Custodian shall be responsible
for managing each Fund's foreign custody arrangements pursuant to the
requirements of Rule 17f-5 under the Investment Company Act. The Custodian also
shall serve as each Fund's Primary Custodian as defined in and pursuant to the
requirements of Rule 17f-7 under the Investment Company Act. As Primary
Custodian, the Custodian shall perform the duties and obligations set forth in
Rule 17f-7 and in Part II of these guidelines and procedures.
|
I.
|
Rule
17f-5: Foreign Custody Manager
|
|
1.
|
In
selecting an Eligible Foreign Custodian, the Foreign Custody Manager shall
determine that each Fund's Foreign Assets (as defined in Rule 17f-5(a)(2))
shall be subject to reasonable care by the Eligible Foreign Custodian
considering all factors relevant to the safekeeping of such Foreign Assets
with reference to standards of international banks and trust companies
holding assets for institutional clients in the relevant market and if
there are no such international banks with reference to the principal
custodians in the relevant market that act as subcustodians or custodians
for U.S. mutual funds.
|
|
2.
|
Each
agreement between the Foreign Custody Manager and each Foreign
Subcustodian shall meet the requirements of Rule 17f-5(c)(2) under the
investment Company Act.
|
|
3.
|
The
Foreign Custody Manager shall establish a system for monitoring the
appropriateness of maintaining a Fund's Foreign Assets with a particular
Eligible Foreign Custodian and to monitor the performance of the agreement
between the Foreign Custody Manager and each Eligible Foreign
Custodian.
|
|
4.
|
The
Foreign Custody Manager shall notify the Fund's investment adviser in
writing as soon as reasonably possible of any material changes in the
Fund's foreign custody
arrangements.
|
|
5.
|
The
Foreign Custody Manager shall provide the Board with written quarterly
reports regarding a Fund's foreign custody arrangements for use at its
quarterly Board meetings which reports shall, among other
things:
|
|
|
(i)
|
notify
the Board of the placement of a Fund's Foreign Assets with a particular
Eligible Foreign Custodian; and
|
|
|
(ii)
|
summarize
for the Board the material changes in the Fund's foreign custody
arrangements that occurred during the prior
quarter.
|
|
6.
|
The
Foreign Custody Manager shall, upon request of the Board, make itself
available to report to a Fund's Board in person at its quarterly Board
meetings, or at such other times as the Board may from time to time
require.
|
|
7.
|
The
Foreign Custody Manager shall agree to and shall provide the Fund's
investment adviser on a regular basis with the country materials it
provides to clients. Each Fund acknowledges that the information contained
in these materials is for informational purposes only and does not
constitute investment advice.
|
|
8.
|
In
performing its delegated duties and obligations to the Fund, the Foreign
Custody Manager shall agree to exercise the reasonable care, prudence and
diligence of a New York bank subject to a New York standard of care having
responsibility for the safekeeping of Foreign
Assets.
|
|
II.
|
Rule
17f-7: Primary Custodian
|
|
1.
|
The
Custodian shall provide each Fund with an initial analysis of the custody
risks associated with maintaining Foreign Assets in each Eligible
Securities Depository that may be used to hold a Fund's Foreign Assets in
each country in the Custodian's foreign custody network. Each such
analysis shall include the information necessary to allow a Fund or its
adviser to determine that each depository qualifies as an Eligible
Securities Depository.
|
|
2.
|
The
Custodian shall promptly provide each Fund with an initial analysis of the
custody risks associated with maintaining Foreign Assets in each Eligible
Securities Depository in each new country added to the Custodian's foreign
custody network.
|
|
3.
|
The
Custodian shall monitor on a continuing basis the custody risks associated
with maintaining a Fund's Foreign Assets with each Eligible Securities
Depository used by each Fund and promptly notify such Fund or its
investment adviser of any material change to those custody
risks.
|
|
4.
|
The
Custodian shall exercise reasonable care, diligence and prudence in
performing its duties as each Fund's Primary
Custodian.
|
|
5.
|
The
Custodian shall annually review the condition of each Eligible Securities
Depository used by a Fund and provide each Fund's adviser with written
confirmation that there have been no material changes in the custody risks
associated with using each such Eligible Securities
Depository.
|
| 2 |
Schedule
C
Taxes
1. (a) Custodian
shall apply for a reduction of withholding tax and any refund of any tax paid or
credits that apply in each applicable market in which a Fund invests in respect
of income payments on Property for the Fund's benefit that Custodian believes
may be available to a Fund. The Custodian shall promptly file any certificates
or other affidavits for the refund or reclaim of foreign taxes paid, and
otherwise use all lawful available measures customarily used to minimize the
imposition of foreign taxes at the source. To the extent that the Custodian
becomes aware of any changes to law, interpretative rulings or procedures
regarding tax reclaims or of alternate means of minimizing foreign taxes,
Custodian will promptly notify each applicable Fund or Series of such
developments.
(b) The
provision of tax reclaim services by the Custodian is contingent upon the
Custodian receiving from a Fund (i) a declaration of the Fund's identity and
place of residence and (ii) such other documentation or information as may be
required by the jurisdiction in which the services are being provided. Each Fund
acknowledges that if the Custodian does not receive such declarations,
documentation, and information from a Fund, the Custodian will not be able to
provide tax reclaim services to such Fund.
(c) The
Custodian shall perform tax reclaim services with respect to taxation levied by
the revenue authorities of the countries in which the Custodian provides global
custody services. Except as expressly provided herein, the Custodian shall have
no responsibility with respect to any Fund's tax position or status in any
jurisdiction.
(d) Each
Fund confirms that the Custodian is authorized to disclose to any lawful revenue
authority or governmental body any information requested by such entity in
relation to a Fund or the Property held by a Fund.
(e) Tax
reclaim services may be provided by the Custodian or, in whole or in part, by
any third party appointed by the Custodian (which may be an affiliate of the
Custodian); provided that the Custodian shall be liable for the performance of
any such third party to the same extent as if the Custodian had itself performed
the services.
2. (a) The
Custodian shall have no responsibility or liability for any obligations now or
hereafter imposed on the Fund or the Custodian as
custodian
of the Fund by the tax law of the United States of America or any state or
political subdivision thereof. It shall be the responsibility of the Fund to
notify the Custodian of the obligations imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of jurisdictions other than those mentioned
in the above sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting.
(b) Each
Fund confirms that the Custodian is authorized to deduct from any cash received
or credited to an Account any taxes or levies required by any lawful revenue or
governmental authority with respect to such Account. Each Fund certifies that it
is a resident of the United States and shall notify the Custodian of any changes
in residency. The Custodian may rely upon this certification or the
certification of such other facts as may be required to administer the
Custodian's obligations under this Agreement. Each Fund shall provide Custodian
with such other documentation and information as Custodian may reasonably
request in connection with its provision of services under this Schedule C. Each
Fund, severally and not jointly, shall indemnify the Custodian against all
losses, liability, claims or demands arising from such certifications or from
Custodian's reliance on other documentation and information provided by the
Fund.
(c) Each
Fund shall be responsible for the payment of all taxes, including interest and
penalties, relating to Property in an Account except as specifically limited by
section 2(d). The Custodian shall not be liable to a Fund or any third party for
any taxes, fines, or penalties payable by the Custodian or a Fund that result
from (i) the inaccurate completion of documents by a Fund or any third party;
(ii) provision to the Custodian or a third party of inaccurate or misleading
information by a Fund or any third party; (iii) the withholding of material
information by a Fund or any third party; or (iv) as a result of any delay by
any revenue authority or any other cause beyond the Custodian's
control.
(d) Each
Fund agrees to pay, and to indemnify and hold the Custodian harmless from and
against, all liabilities, penalties, interest or additions to tax with respect
to or resulting from any delay in or failure by the Custodian (i) to pay,
withhold or report any U.S. federal, state, or local taxes, or foreign taxes
imposed on or (ii) to report interest, dividend, or other income paid or
credited to an Account, where such delay or failure by the Custodian to pay,
withhold, or report tax or income is the result of a Fund's failure to comply
with the terms of this Agreement, including this Schedule C, or the result of
any third party's inaccurate completion of documents on behalf of a Fund. No
Fund shall be liable to the Custodian for any penalty or additions to tax due as
a
| 2 |
result
of the Custodian's delay or failure to pay or withhold tax or to report
interest, dividend or other income paid or credited to an Account solely as a
result of the Custodian's negligent acts or omissions.
| 3 |
Schedule
D
Proxy
Services
The
Custodian shall provide proxy services in accordance with the terms set forth
below. Proxy services may be provided by the Custodian or, in whole or in part,
by a Subcustodian or nominee appointed by the Custodian.
|
1.
|
Proxy
services include, but are not limited to notices by the Custodian to a
Fund or Series of the dates of pending shareholder meetings, resolutions
to be voted upon, and the required return dates as may be received by the
Custodian or provided to the Custodian by its Subcustodian or by third
parties.
|
|
2.
|
The
Custodian shall promptly deliver or mail to Proxy Monitor, or such other
proxy vendor as may be appointed from time to time by a Fund, all forms of
proxies and all notices of meetings and any other notices or announcements
or related proxy materials affecting or relating to securities owned by
such Fund that are actually received by the Custodian. For purposes of
this Schedule D, related proxy materials shall include, but not be limited
to, annual reports, explanatory material concerning resolutions,
management recommendations, or other relevant
materials.
|
|
3.
|
Neither
the Custodian nor any Subcustodian or nominee shall vote upon any of such
securities or execute any proxy to vote thereon or give any consent or
take any other action with respect
thereto.
|
|
4.
|
In
providing proxy services hereunder, the Custodian shall be acting solely
as the agent of a Fund and shall not exercise any discretion with regard
to such proxy services.
|
|
5.
|
Each
Fund or Series will promptly notify the Custodian of any change in or
addition to the proxy vendor[s] used by such Fund or Series. Such notice
shall provide Custodian with such information as may be required to allow
the Custodian to carry out its duties under paragraph 2
above.
|
Schedule
E
Subjects
covered under Section 3.30:
Third party foreign
exchange
Late/incomplete
trade/corporate action instructions
Counterparty
errors
Threshold:
The Fund and the
Custodian will jointly pursue claims exceeding $2,500.
Note:
Claims
must be made within 90 business days of the event, or within such other period
as may be mutually agreed upon from time to time by the Custodian and the Fund.
Claims not covered shall be made within such period as may be mutually agreed
upon from time to time by the Custodian and the Fund.
Schedule
F
▇▇▇▇▇
BROTHERS ▇▇▇▇▇▇▇▇ & CO.
Global Custody Network
Subcustodians
|
Argentina
|
Citibank,
Buenos Aires
|
|
Australia
|
National
Australia Bank Ltd., Melbourne
|
|
Austria
|
Bank
Austria AG
|
|
Bahrain
|
HSBC
Bank Middle East, Bahrain
|
|
Bangladesh
|
Standard
Chartered Bank, Dhaka
|
|
Belgium
|
Banque
Brussels ▇▇▇▇▇▇▇
|
|
Bermuda
|
The
Bank of N.T. ▇▇▇▇▇▇▇▇▇▇▇ & Son Ltd.
|
|
Bolivia
|
Citibank,
NA, La Paz
|
|
Botswana
|
Stanbic
Bank Botswana Limited for Standard Bank of South Africa
|
|
Brazil
|
Citibank,
Sao Paulo
|
|
Bulgaria
|
Internationale
Nederlanden Bank N.V.
|
|
Canada
|
Royal
Bank of Canada
|
|
Chile
|
Citibank,
▇▇▇▇▇▇▇▇
|
|
China-Shanghai
|
Standard
Chartered Bank, Shanghai
|
|
China-Shenzhen
|
Standard
Chartered Bank, Shenzhen
|
|
Colombia
|
Cititrust
Colombia, S.A. Sociedad Fiduciaria for Citibank
|
|
Croatia
|
Bank
Austria AG
|
|
Czech
Republic
|
Citibank
A.S. Prauge
|
|
Denmark
|
Den
Danske Bank
|
|
Ecuador
|
Citibank,
Quito
|
|
Egypt
|
Citibank,
Cairo
|
|
Finland
|
▇▇▇▇▇▇
Bank
|
|
France
|
BNP
Paribas S.A.
|
Schedule
F
|
Germany
|
Dresdner
Bank
|
|
Ghana
|
Barclays'
Bank of Ghana Ltd
|
|
Greece
|
Citibank,
Athens
|
|
Hong
Kong
|
Hong
Kong & Shanghai Banking Corp. Ltd., Hong Kong
|
|
Hungary
|
Citibank
Budapest RT. for Citibank
|
|
India
|
Citibank,
Mumbai
|
|
Indonesia
|
Citibank,
Jakarta
|
|
Ireland
|
Allied
Irish Banks PLC
|
|
Israel
|
Bank
Hapoalim B.M.
|
|
Italy
|
IntesaBCI
S.P.A
|
|
Ivory
Coast
|
Societe
General
|
|
Japan
|
Sumitomo
Mitsui Banking Corporation (SMBC)
|
|
Jordan
|
The
British Bank of the Middle East, Amman (BBME)
|
|
Kenya
|
Standic
Bank Kenya Limited
|
|
Latvia
|
Societe
Generale (SoGen)
|
|
Lebanon
|
British
Bank of the Middle East for Hong Kong & Shanghai Banking
Corp.
|
|
Luxembourg
|
Kredietbank
Luxembourg
|
|
Malaysia
|
Hong
Kong Bank Malaysia Berhad
|
|
Mauritius
|
Hong
Kong & Shanghai Banking Corp. Ltd., Mauritius
|
|
Mexico
|
Citibank
Mexico, S.A.
|
|
Morocco
|
Citibank
NA, Maghreb
|
|
Namibia
|
Standard
Bank Namibia for Standard Bank of South Africa
|
|
Netherlands
|
Fortis
Bank (Nederland) N.V.
|
|
New
Zealand
|
National
Australia Bank Ltd., Aukland
|
|
Nigeria
|
Stanbic
Merchant Bank of Nigeria
|
Schedule
F
|
Norway
|
Den
Norske Bank
|
|
Oman
|
British
Bank of the Middle East for Hong Kong & Shanghai Banking Corp.
Ltd.
|
|
Pakistan
|
Standard
Chartered Bank, Karachi
|
|
Panama
|
Bank
Boston, Panama
|
|
Peru
|
Citibank,
Lima
|
|
Philippines
|
Citibank,
Manila
|
|
Poland
|
Bank
Handlowy w Warszawie S.A.
|
|
Portugal
|
Banco
Comercial Portugues SA.
|
|
Romania
|
Internationale
Nederlanden Bank N.V.
|
|
Russia
|
Bank
Credit Suisse First Boston AO for Credit Suisse, Zurich Citibank
government debt
|
|
Singapore
|
Hong
Kong & Shanghai Banking Corp. Ltd.
|
|
Slovakia
|
Internationale
Nederlanden Bank (ING Bank N.V.)
|
|
Slovenia
|
Bank
Austria AG
|
|
South
Africa
|
First
National Bank of Southern Africa
|
|
South
Korea
|
Citibank,
Seoul
|
|
Spain
|
Banco
Santander Central Hispanoamericano
|
|
Sri
Lanka
|
Hong
Kong & Shanghai Banking Corp. Ltd., Colombo
|
|
Swaziland
|
Stanbic
Bank Swaziland Limited
|
|
Sweden
|
Skandinaviska
Enskilda Banken
|
|
Switzerland
|
UBS
AG
|
|
Taiwan
|
Standard
Chartered Bank, Taipei
|
|
Thailand
|
Hong
Kong & Shanghai Banking Corp. Ltd., Bangkok
|
|
Turkey
|
Citibank,
Istanbul
|
|
Ukraine
|
Internationale
Nederlanden Bank (ING Bank N.V.)
|
Schedule
F
|
United
Kingdom
|
Midland
Bank PLC
|
|
Uruguay
|
BANKBOSTON,
Montevideo
|
|
Venezuela
|
Citibank,
Caracas
|
|
Zambia
|
Stanbic
Bank Zambia Ltd. for Standard Bank of South Africa
|
|
Zimbabwe
|
Stanbic
Bank Zimbabwe Ltd. for Standard Bank of South
Africa
|
Schedule
G
▇▇▇▇▇
BROTHERS ▇▇▇▇▇▇▇▇ & CO.
Global Custody Network
Depositories
|
Argentina
|
Caja
de Valores S.A. (CDV)
Central
de Registration y Liquidacion de Instrumentos de Endeudamiento
Publico
|
|
Australia
|
Austraclear
Reserve
Bank of Australia
|
|
Austria
|
Oesterreichische
Kontrollbank Aktiengesellschaft (OeKB)
|
|
Belgium
|
Banque
Nationale de Belgique (BNB)
Caisse
Intetprofessionalle de Depot et Virements de Titres
(CIK)
|
|
Brazil
|
Bolsa
de Valores de Sao Paulo (BOVESPA)
Camara
de Liquidacao e Custodia S.A. (CLC)
|
|
Bulgaria
|
Central
Depository, AD (CDAD)
The
Bulgarian National Bank (BNB)
|
|
Canada
|
Bank
of Canada
The
Canadian Depository For Securities Limited (CDS)
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ (▇▇▇)
|
|
▇▇▇▇▇
|
China
Securities Depository and Clearing Co. Ltd.
|
|
Colombia
|
Deposito
Central de Valores de Colombia (DCV)
Deposito
Centalizado de Valores de Colombia (DECEVAL)
|
|
Czech
Republic
|
Czech
National Bank (CNB)
Stredisko
Cennych Papiru (SCP)
|
|
Denmark
|
Vaerdipapircentralen
(VP)
|
|
Egypt
|
Misr
for Clearing, Settlement and Depository (MCSD)
|
|
Euromarket
|
Cedel
Euroclear
|
|
Finland
|
Finnish
Central Securities Depository Ltd. (CSD)
|
|
France
|
Banque
de France
Euroclear
France
|
|
Germany
|
Deutscher
Boerse Clearing (DBC)
|
|
Greece
|
Apothetirion
Titlon A.E. (Central Securities Depository S.A.)
Bank
of Greece
|
Schedule
G
|
Hong
Kong
|
Hong
Kong Securities Clearing Company Ltd. (HKSCC)
|
|
Hungary
|
Central
Depository and Clearing House (Budapest) Ltd. (KELER
Ltd.)
|
|
India
|
National
Securities Depository Limited (NSDL)
|
|
Indonesia
|
PT
Kliring Sentral Efek Indonesia (KSEI)
|
|
Ireland
|
CrestCo.
Gilt
Settlement Office (GSO)
|
|
Israel
|
Tel-Aviv
Stock Exchange (TASE) Clearinghouse Ltd.
|
|
Italy
|
Monte
Titoli SpA
|
|
Japan
|
Bank
of Japan
Japan
Securities Depository Center (JASDEC)
|
|
Lebanon
|
Midclear
|
|
Malaysia
|
Malaysian
Central Depository Sdn. Bhd. (MCD)
Bank
Negara Malaysia
|
|
Mauritius
|
Central
Depository and Settlement Co. Ltd. (CDS)
|
|
Mexico
|
Banco
de Mexico
S.D.
Indeval, S.A. de C.V. (Indeval)
|
|
Morocco
|
MAROCLEAR
|
|
Netherlands
|
De
Nederlandche Bank (DNB)
Nederlands
Centraal Instituut Giraal Effectenverkeer B.V.
(NECIGEF)
|
|
New
Zealand
|
Reserve
Bank of New Zealand (RBNZ)
|
|
Norway
|
Verdipapirsentralen
(VPS)
|
|
Oman
|
Muscat
Securities Market (MSM)
|
|
Pakistan
|
Central
Depository Company of Pakistan Limited (CDC)
|
|
Panama
|
Latinclear
|
|
Peru
|
Caja
De Valores y Liquidaciones (CAVALI)
|
|
Philippines
|
Philippine
Central Depository, Inc. (PCD)
|
|
Poland
|
National
Bank of Poland (NBP)
National
Depository of Securities (NDS)
|
Schedule
G
|
Portugal
|
Associacao
para a Prestacao de Servicos as Bolsa de Valores (Interbolsa) The National
Company for Clearing, Settlement and Depository for Securities Bucharest
Stock Exchange (BSE)
|
|
Russia
|
NDC
Rosvneshtorgban
(VTB)
|
|
Singapore
|
Central
Depository Pte Limited (CDP)
|
|
Slovak
Republic
|
National
Bank of Slovakia (NBS)
Stredisko
Cennych Papierov (SCP), Bratislava
|
|
South
Africa
|
Central
Depository Pty Ltd. (CD)
STRATE
Ltd. (STRATE)
|
|
South
Korea
|
Korean
Securities Depository Corporation (KSD)
|
|
Spain
|
Banco
de Espaná
Servicio
de Compensacion y Liquidacion de Valores (SCLV)
|
|
Sri
Lanka
|
Central
Depository System (Pvt) Limited (CDS)
|
|
Sweden
|
Vardepappercentralen
VPC AB (VPC)
|
|
Switzerland
|
Schweizerische
Effekten-Giro AG (SEGA)
|
|
Taiwan
|
Taiwan
Securities Central Depository Co., Ltd. (TSCD)
|
|
Thailand
|
Thailand
Share Depository Center (TSDC)
|
|
Turkey
|
Takasbank
Central
Bank of Turkey (C.B.T.)
|
|
United
Kingdom
|
Central
Gilts Office (CGO)
Central
Moneymarkets Office (CMO)
CRESTCo.
|
|
Venezuela
|
The
Caja Venezolana de Valores, S.A.C.A. (CVV)
|
|
Zambia
|
Zambian
Central Shares Depository
|
SCHEDULE
A
TO
THE
CUSTODIAN AGREEMENT
BETWEEN
EACH
OF THE INVESTMENT COMPANIES LISTED ON SCHEDULE A ATTACHED
HERETO
and
▇▇▇▇▇
BROTHERS ▇▇▇▇▇▇▇▇ & CO.
Dated
as of 1/11/2005
The
following is a list of Funds/Portfolios for which the Custodian shall serve
under a Custodian Agreement dated as of 10/26/2001 "the Agreement":
CAPITAL
AND INCOME S'T'RATEGIES FUND - EMERGING MARKETS DEBT 1
CAPITAL
AND INCOME STRATEGIES FUND - EMERGING MARKETS DEBT 2
CAPITAL
AND INCOME STRATEGIES FUND - EQUITY
CAPITAL
AND INCOME STRATEGIES FUND - EQUITY OPTION PLEDGE ACCOUNT
CAPITAL
AND INCOME STRATEGIES FUND - HIGH YIELD
CAPITAL
AND INCOME STRATEGIES FUND - LOW DURATION
CAPITAL
AND INCOME STRATEGIES FUND - PREFERRED
CAPITAL
AND INCOME STRATEGIES FUND, INC.
MASTER
LARGE CAP CORE PORTFOLIO OF LARGE CAP SERIES TRUST
MASTER
LARGE CAP GROWTH PORTFOLIO OF MASTER LARGE CAP SERIES TRUST
MASTER
LARGE CAP VALUE PORTFOLIO OF MASTER LARGE CAP SERIES TRUST
MERCURY
HW GLOBAL VALUE FUND
MERCURY
LOW DURATION FUND
MERCURY
SHORT TERM INVESTMENT FUND
▇▇▇▇▇▇
▇▇▇▇▇ INTERNATIONAL INDEX PORTFOLIO OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ SERIES FUND,
INC.
| 11-Jan-05 |
Page
1 of 3
|
SCHEDULE
A
|
▇▇▇▇▇▇▇
▇▇▇▇▇ INTERNATIONAL VALUE FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ BASIC VALUE PRINCIPAL PROTECTED FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ CORE PRINCIPAL PROTECTED FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ DEVELOPING CAPITAL MARKETS FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ DRAGON FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ EUROFUND
▇▇▇▇▇▇▇
▇▇▇▇▇ FUNDAMENTAL GROWTH PRINCIPAL PROTECTED FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ GENERAL WIRE ACCOUNT
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL ALLOCATION FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL BALANCED PORTFOLIO (MASTER)
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL FINANCIAL SERVICES MASTER TRUST
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL SMALL CAP PORTFOLIO OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ SERIES FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL TECHNOLOGY FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ GLOBAL VALUE FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ INTERNATIONAL EQUITY FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ INTERNATIONAL FUND (MASTER)
▇▇▇▇▇▇▇
▇▇▇▇▇ LATIN AMERICA FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ LOW DURATION FUND (FEEDER)
▇▇▇▇▇▇▇
▇▇▇▇▇ LOW DURATION PORTFOLIO OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ SERIES FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ PACIFIC FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ PAN-EUROPEAN GROWTH FUND (MASTER)
▇▇▇▇▇▇▇
▇▇▇▇▇ SMALL CAP FUND, INC.
▇▇▇▇▇▇▇
▇▇▇▇▇ SMALL CAP GROWTH FUND
| 11-Jan-05 |
Page 2
of 3
|
SCHEDULE
A
|
▇▇▇▇▇▇▇
▇▇▇▇▇ VARIABLE SERIES FUNDS, INC. - DEVELOPING CAPITAL MARKETS FOCUS
FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ VARIABLE SERIES FUNDS: INTERNATIONAL VALUE V.I. FUND
▇▇▇▇▇▇▇
▇▇▇▇▇ VARIABLE SERIES FUNDS: LARGE CAP GROWTH VI FUND
ML
GLOBAL ALLOCATION STRATEGY PORTOLIO OF ▇▇▇▇▇▇ ▇▇▇▇▇ SERIES FUND,
INC.
ML
GLOBAL ALLOCATION VI FUND OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ VARIABLE SERIES FUNDS,
INC.
TOTAL
RETURN BOND MASTER PORTFOLIO
IN
WITNESS WHEREOF, each of the parties hereto has caused this SCHEDULE A to be
executed in its name and on behalf of each such Fund/Portfolio.
EACH
OF THE INVESTMENT COMPANIES LISTED ON SCHEDULE A ATTACHED HERETO
|
BY:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
NAME:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
TITLE:
|
Vice
President and Treasurer
|
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
Title:
|
Managing
Director
|
| 11-Jan-05 |
Page 3
of 3
|
SCHEDULE
A
|