FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of October 9, 1997 between each investment company
identified on Appendix A attached hereto (each hereinafter referred to as the
"Fund") individually and severally, and not jointly and severally, and The Bank
of New York ("BNY").
WITNESSETH:
WHEREAS, the Fund desires to appoint BNY as Foreign Custody Manager on the
terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and perform the
duties set forth herein on the terms and conditions contained herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Fund and BNY hereby agrees as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1. Capitalized terms used in this Agreement and not otherwise defined in
this Agreement shall have the meanings given such terms in the Rule.
2. "Board" shall mean the board of directors or board of trustees, as the
case may be, of the Fund.
3. "Eligible Foreign Custodian" shall have the meaning provided in the
Rule.
4. "Monitoring System" shall mean a system established by BNY to fulfill
the Responsibilities specified in clauses (d) and (e) of Article III of this
Agreement.
5. "Qualified Foreign Bank" shall have the meaning provided in the Rule.
6. "Responsibilities" shall mean the responsibilities delegated to BNY as a
Foreign Custody Manager with respect to each Specified Country and each Eligible
Foreign Custodian selected by BNY, as such responsibilities are more fully
described in Article III of this Agreement.
7. "Rule" shall mean Rule 17f-5 under the Investment Company Act of 1940,
as amended, as such Rule became effective on June 16, 1997.
8. "Securities Depository" shall mean any securities depository or clearing
agency within the meaning of Section (a)(1)(ii) or (a)(1)(iii) of the Rule.
9. "Specified Country" shall mean each country listed on Schedule I
attached hereto (as amended from time to time) and each country, other than the
United States, constituting the primary market for a security with respect to
which the Fund has given settlement instructions to The Bank of New York as
custodian (the "Custodian") under its Custody Agreement with the Fund.
ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to BNY with respect to
each Specified Country the Responsibilities (the "Delegation").
2. BNY accepts the Delegation and agrees in performing the Responsibilities
as a Foreign Custody Manager to exercise reasonable care, prudence and diligence
such as a bailee for hire having responsibility for the safekeeping of the
Fund's assets would exercise.
3. BNY shall provide to the Fund (i) notice promptly after the placement of
assets of the Fund with a particular Eligible Foreign Custodian selected by BNY
within a Specified Country, (ii) at such times as the Board deems reasonable and
appropriate based on the circumstances of the Fund's foreign custody
arrangements (but not less often than quarterly) written reports notifying the
Board of any material change in the arrangements (including, in the case of
Qualified Foreign Banks, any material change in any contract governing such
arrangements and in the case of Securities Depositories, any material change in
the established practices or procedures of such Securities Depositories) with
respect to assets of the Fund with any such Eligible Foreign Custodian, and
(iii) not less often than annually a report summarizing the material custodial
risks known to BNY which accompany such arrangements.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall with respect to
each Specified Country select an Eligible Foreign Custodian. In connection
therewith, BNY shall: (a) determine that assets of the Fund held by such
Eligible Foreign Custodian will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market in which such Eligible
Foreign Custodian operates, after considering all factors relevant to the
safekeeping of such assets, including, without limitation, those contained in
Section (c)(1) of the Rule; (b) determine that the Fund's foreign custody
arrangements with each Qualified Foreign Bank are governed by a written
contract, with the Custodian (or, in the case of a Securities Depository, by
such a contract, by the rules or established practices or procedures of the
Securities Depository, or by any combination of the foregoing) which will
provide reasonable care for the Fund's assets based on the standards specified
in paragraph (c)(1) of the Rule; (c) determine that each contract with a
Qualified Foreign Bank shall include the provisions specified in paragraph
(c)(2)(i)(A) through (F) of the Rule or, alternatively,
2
in lieu of any or all of such (c)(2)(i)(A) through (F) provisions, such other
provisions as BNY determines will provide, in their entirety, the same or a
greater level of care and protection for the assets of the Fund as such
specified provisions; (d) monitor pursuant to the Monitoring System the
appropriateness of maintaining the assets of the Fund with a particular Eligible
Foreign Custodian pursuant to paragraph (c)(1) of the Rule including in the case
of a Qualified Foreign Bank, any material change in the contract governing such
arrangement and in the case of a Securities Depository, any material change in
the established practices or procedures of such Securities Depository; and (3)
promptly advise the Fund whenever an arrangement (including, in the case of a
Qualified Foreign Bank, any material change in the contract governing such
arrangement and in the case of a Securities Depository, any material change in
the established practices or procedures of such Securities Depository) described
in preceding clause (d) no longer meets the requirements of the Rule. BNY, as
Foreign Custody Manger, will make the determination that it is appropriate to
maintain assets in each Eligible Foreign Custodian and will exercise reasonable
care in the process.
2. (a) For purposes of Clauses (a) and (b) of this Section 1, with respect
to Securities Depositories, it is understood that to the extent permitted to a
Foreign Custody Manager under the Rule, such determination may be made on the
basis of, and the obligation of BNY hereunder to investigate any such Securities
Depository shall be limited to, obtaining publicly available information with
respect to each such Securities Depository, absent actual knowledge by BNY to
the contrary.
(b) For purposes of clause (d) of preceding Section 1 of this Article,
BNY's determination of appropriateness shall not include, nor be deemed to
include, any evaluation of Country Risks associated with investment in a
particular country. For purposes hereof, "Country Risks" shall mean systemic
risks of holding assets in a particular country including, but no limited to,
(a) the necessity to use any Securities Depository the use of which is mandatory
by law or regulation or because securities cannot be withdrawn from such
Securities Depository, or because maintaining securities outside the Securities
Depository is not consistent with universal custodial practices in the relevant
market, (b) such country's financial infrastructure, (c) such country's
prevailing custody and settlement practices, (d) nationalization, expropriation
or other governmental actions, (e) regulation of the banking or securities
industry, (f) currency controls, restrictions, devaluations or fluctuations, and
(g) market conditions which affect the orderly execution of securities
transactions or affect the value of securities.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Agreement has been duly
authorized, executed and delivered by the Fund, constitutes a valid and legally
binding obligation of the Fund enforceable in accordance with its terms, and no
statute, regulation, rule, order, judgment or contract binding on the Fund
prohibits the Fund's execution or performance of this Agreement; (b) this
3
Agreement has been approved and ratified by the Board at a meeting duly called
and at which a quorum was at all times present; and (c) the Board or its
investment advisor has considered the Country Risks associated with investment
in each Specified Country and will have considered such risks prior to any
settlement instructions being given to the Custodian with respect to any other
Specified Country.
2. BNY hereby represents that (a) BNY is duly organized and existing under
the laws of the State of New York, with full power to carry on its businesses as
now conducted, and to enter into this Agreement and to perform its obligations
hereunder; (b) this Agreement been duly authorized, executed and delivered by
BNY, constitutes a valid and legally binding obligation of BNY enforceable in
accordance with its terms, and no statue, regulation, rule, order, judgment or
contract binding on BNY prohibits BNY's execution or performance of this
Agreement; and (c) BNY has established and will maintain the Monitoring System.
ARTICLE V
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses, damages, liabilities or
claims, including attorneys' and accountants' fees, sustained or incurred by, or
asserted against, the Fund except to the extent the same arises out of the
failure of BNY to exercise the care, prudence and diligence required by Section
2 of Article II hereof. In no event shall BNY be liable to the Fund, the Board,
or any third party for special, indirect or consequential damages, or for lost
profits or loss of business, arising in connection with this Agreement. Anything
contained herein to the contrary notwithstanding, nothing contained herein shall
affect or alter the duties and responsibilities of BNY or the Fund under any
other agreement between BNY and the Fund, including without limitation, the
Custody Agreement or any Securities Lending Agreement.
2. The Fund agrees to indemnify BNY and holds it harmless from and against
any and all costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees, sustained or incurred by, or asserted against,
BNY by reason or as a result of any action or inaction, or arising out of BNY's
performance hereunder, provided that the Fund shall not indemnify BNY to the
extent any such costs, expenses, damages, liabilities or claims arises out of
BNY's failure to exercise the reasonable care, prudence and diligence required
by Section 2 of Article II hereof.
3. BNY shall only such duties as are expressly set forth herein. In no
event shall BNY be liable for any Country Risks associated with investments in a
particular country.
ARTICLE VI
MISCELLANEOUS
1. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to BNY, shall be sufficiently given if received by it
at its offices at 00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
place as BNY may from time to time designate in writing.
4
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if received
by it at its offices at c/o OppenheimerFunds, Inc. Two World Trade Center, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: General Counsel, or at such
other place as the Fund may from time to time designate in writing.
3. In case any provisions in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
thereby. This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties. This Agreement shall extend to and
shall be binding upon the parties hereto, and their respective successors and
assigns; provided however, that this Agreement shall not be assignable by either
party without the written consent of the other.
4. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and BNY hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. The Fund hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and BNY each hereby irrevocably waives any and all rights to
trial by jury in any legal proceeding arising out of or relating to this
Agreement.
5. The parties hereto agree that in performing hereunder, BNY is acting
solely on behalf of the Fund and no contractual or service relationship shall be
deemed to be established hereby between BNY and any other person.
6. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
7. This Agreement shall terminate simultaneously with the termination of
the Custody Agreement between the Fund and the Custodian, and may otherwise be
terminated by either party giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than ninety
(90) days after the date of such notice.
8. In consideration of the services provided by BNY hereunder, the Fund
shall pay to BNY such compensation and out-of-pocket expenses as may be agreed
upon from time to time.
9. For each Fund organized as a Massachusetts trust, a copy of its
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts. Notice is hereby given that each such instrument is executed on
behalf of the trustees of each such Fund and not individually, and that the
obligations of this Agreement are not binding upon any of the trustees or
shareholders
5
individually but are binding only upon the respective Fund. The parties
expressly agree that BNY and its assignees and affiliates shall look solely to
the respective Fund's assets and property with respect to enforcement of any
claim.
IN WITNESS WHEREOF, the Fund and BNY have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of this
date first above written.
/s/ Xxxxxx X. Xxxxxxx, Secretary on
behalf of each Fund identified on
Appendix A attached hereto individually
and severally, and not jointly and
severally
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
Title: Xxxxx X. Xxxxx, VP
6
Appendix A
Xxxxxxxxxxx Champion Income Fund
Xxxxxxxxxxx Equity Income Fund
Xxxxxxxxxxx Integrity Funds (consisting of the following series:)
Xxxxxxxxxxx Bond Fund
Xxxxxxxxxxx International Bond Fund
Xxxxxxxxxxx High Yield Fund
Xxxxxxxxxxx Main Street Funds, Inc. (as to the following series:)
Xxxxxxxxxxx Main Street Income & Growth Fund
Xxxxxxxxxxx Real Asset Fund
Xxxxxxxxxxx Strategic Income Fund
Xxxxxxxxxxx Total Return Fund, Inc.
Xxxxxxxxxxx Variable Account Funds (as to the following 8 series:)
Xxxxxxxxxxx High Income Fund
Xxxxxxxxxxx Bond Fund
Xxxxxxxxxxx Capital Appreciation Fund
Xxxxxxxxxxx Growth Fund
Xxxxxxxxxxx Multiple Strategies Fund
Xxxxxxxxxxx Growth & Income Fund
Xxxxxxxxxxx Global Securities Fund
Xxxxxxxxxxx Strategic Bond Fund
Panorama Series Fund, Inc. (as to the following 6 series):
Total Return Portfolio
Growth Portfolio
International Equity Portfolio
LifeSpan Capital Appreciation Portfolio
LifeSpan Balanced Portfolio
LifeSpan Diversified Income Portfolio
Xxxxxxxxxxx Capital Appreciation Fund
Xxxxxxxxxxx Developing Markets Fund
Xxxxxxxxxxx Discovery Fund
Xxxxxxxxxxx Enterprise Fund
Xxxxxxxxxxx Global Fund
Xxxxxxxxxxx Global Growth & Income Fund
Xxxxxxxxxxx Gold & Special Minerals Fund
Xxxxxxxxxxx Growth Fund
Xxxxxxxxxxx International Growth Fund
Xxxxxxxxxxx Multiple Strategies Fund
Xxxxxxxxxxx World Bond Fund
Xxxxxxxxxxx Multi-Sector Income Trust
Xxxxxxxxxxx Series Fund, Inc. (as to the following 5 series):
Xxxxxxxxxxx Disciplined Allocation Fund
Xxxxxxxxxxx Disciplined Value Fund
Xxxxxxxxxxx LifeSpan Growth Fund
Xxxxxxxxxxx LifeSpan Balanced Fund
Xxxxxxxxxxx LifeSpan Income Fund
Bond Fund Series - Xxxxxxxxxxx Bond Fund for Growth
Xxxxxxxxxxx XxxXxx Fund
Xxxxxxxxxxx International Small Company Fund
7
FOREIGN CUSTODY MANAGER AGREEMENT
SCHEDULE 1
Argentina
Australia
Austria
Bangladesh
Belgium
Bermuda
Botswana
Brazil
Bulgaria
Canada
Chile
China
Columbia
Cyprus
Czech Republic
Denmark
Easdaq
Ecuador
Egypt
Estonia
Euromarket (Cedel)
Finland
France
Germany
Ghana
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Ivory Coast
Japan
Jordan
Kenya
Korea
Latvia
Lebanon
Lithuania
Luxembourg
Malaysia
Mauritius
Mexico
Morocco
Namibia
Netherlands
New Zealand
Nigeria
Norway
Pakistan
Peru
Philippines
Poland
Portugal
Russia
Singapore
Slovenia
South Africa
Spain
Sri Lanka
Swaziland
Sweden
Switzerland
Taiwan
Thailand
Tunisia
Turkey
Ukraine
United Kingdom
United States
Uruguay
Venezuela
Zambia
Zimbabwe
FOREIGN.WPD
8
