CUSTODY AGREEMENT
Agreement made as of this 18th day of February, 2000, between PRINCIPAL LARGECAP
STOCK INDEX FUND, INC., a Maryland corporation organized and existing under the
laws of the State of Maryland, having its principal office and place of business
at 000 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000 (hereinafter called the "Fund"),
and THE BANK OF NEW YORK, a New York corporation authorized to do a banking
business, having its principal office and place of business at Xxx Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth, the
Fund and the Custodian agree 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. "Authorized Persons" shall be deemed to include any person, whether or not
such person is an officer or employee of the Fund, duly authorized by the
Board of Directors of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix A or such other Certificate as may
be received by the Custodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
3. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of
the exercise price, as specified therein, to purchase from the writer
thereof the specified underlying Securities.
4. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian which is actually received by the Custodian and signed on behalf
of the Fund by any two Authorized Persons, and the term Certificate shall
also include Instructions.
5. "Clearing Member" shall mean a registered broker-dealer which is a clearing
member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing
member.
6. "Collateral Account" shall mean a segregated account so denominated which
is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of
(a) any Put Option guarantee letter or similar document described in
paragraph 8 of Article V herein, or
(b) any receipt described in Article V or VIII herein.
7. "Composite Currency Unit" shall mean the European Currency Unit or any
other composite unit consisting of the aggregate of specified amounts of
specified Currencies as such unit may be constituted from time to time.
8. "Covered Call Option" shall mean an exchange traded option entitling the
holder, upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the specified
underlying Securities (excluding Futures Contracts) which are owned by the
writer thereof and subject to appropriate restrictions.
9. "Currency" shall mean money denominated in a lawful currency of any country
or the European Currency Unit.
10. "Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Fund's Board of Directors
specifically approving deposits therein by the Custodian.
11. "Financial Futures Contract" shall mean the firm commitment to buy or sell
fixed income securities including, without limitation, U.S. Treasury Bills,
U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month
at an agreed upon price.
12. "Futures Contract" shall mean a Financial Futures Contract and/or Stock
Index Futures Contracts.
13. "Futures Contract Option" shall mean an option with respect to a Futures
Contract.
14. "FX Transaction" shall mean any transaction for the purchase by one party
of an agreed amount in one Currency against the sale by it to the other
party of an agreed amount in another Currency.
15. "Instructions" shall mean instructions communications transmitted by
electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission signed by an Authorized Person and tested telex.
16. "Margin Account" shall mean a segregated account in the name of a broker,
dealer, futures commission merchant, or a Clearing Member, or in the name
of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money
of the Fund shall be deposited and withdrawn from time to time in
connection with such transactions as the Fund may from time to time
determine. Securities held in the Book-Entry System or the Depository shall
be deemed to have been deposited in, or withdrawn from, a Margin Account
upon the Custodian's effecting an appropriate entry in its books and
records.
17. "Money Market Security" shall be deemed to include, without limitation,
certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United
States or agencies or instrumentalities thereof, any tax, bond or revenue
anticipation note issued by any state or municipal government or public
authority, commercial paper, certificates of deposit and bankers'
acceptances, repurchase agreements with respect to the same and bank time
deposits, where the purchase and sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale.
18. "O.C.C." shall mean the Options Clearing Corporation, a clearing agency
registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
19. "Option" shall mean a Call Option, Covered Call Option, Stock Index Option
and/or a Put Option.
20. "Oral Instructions" shall mean verbal instructions actually received by the
Custodian from an Authorized Person or from a person reasonably believed by
the Custodian to be an Authorized Person.
21. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of
the specified underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
22. "Reverse Repurchase Agreement" shall mean an agreement pursuant to which
the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
23. "Security" shall be deemed to include, without limitation, Money Market
Securities, Call Options, Put Options, Stock Index Options, Stock Index
Futures Contracts, Stock Index Futures Contract Options, Financial Futures
Contracts, Financial Futures Contract Options, Reverse Repurchase
Agreements, common stocks and other securities having characteristics
similar to common stocks, preferred stocks, debt obligations issued by
state or municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds, industrial
bonds and industrial development bonds), bonds, debentures, notes,
mortgages or other obligations, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase, sell or
subscribe for the same, or evidencing or representing any other rights or
interest therein, or any property or assets.
24. "Senior Security Account" shall mean an account maintained and specifically
allocated to a Series under the terms of this Agreement as a segregated
account, by recordation or otherwise, within the custody account in which
certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in
accordance with Certificates received by the Custodian in connection with
such transactions as the Fund may from time to time determine.
25. "Series" shall mean the various portfolios, if any, of the Fund listed on
Appendix B hereto as amended from time to time.
26. "Shares" shall mean the shares of capital stock of the Fund, each of which
is, in the case of a Fund having Series, allocated to a particular Series.
27. "Stock Index Futures Contract" shall mean a bilateral agreement pursuant to
which the parties agree to take or make delivery of an amount of cash equal
to a specified dollar amount times the difference between the value of a
particular stock index at the close of the last business day of the
contract and the price at which the futures contract is originally struck.
28. "Stock Index Option" shall mean an exchange traded option entitling the
holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise. ARTICLE II.
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian of the
Securities and money at any time owned by the Fund during the period of
this Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III.
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, the Fund will deliver or cause to be delivered to the Custodian all
Securities and all money owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart.
The Custodian will not be responsible for any Securities and money not
actually received by it. The Custodian will be entitled to reverse any
credits made on the Fund's behalf where such credits have been previously
made and money is not finally collected. The Fund shall deliver to the
Custodian a certified resolution of the Board of Directors of the Fund,
substantially in the form of Exhibit A hereto, approving, authorizing and
instructing the Custodian on a continuous and on-going basis to deposit in
the Book-Entry System all Securities eligible for deposit therein,
regardless of the Series to which the same are specifically allocated and
to utilize the Book-Entry System to the extent possible in connection with
its performance hereunder, including, without limitation, in connection
with settlements of purchases and sales of Securities, loans of Securities
and deliveries and returns of Securities collateral. Prior to a deposit of
Securities specifically allocated to a Series in the Depository, the Fund
shall deliver to the Custodian a certified resolution of the Board of
Directors of the Fund, substantially in the form of Exhibit B hereto,
approving, authorizing and instructing the Custodian on a continuous and
ongoing basis until instructed to the contrary by a Certificate actually
received by the Custodian to deposit in the Depository all Securities
specifically allocated to such Series eligible for deposit therein, and to
utilize the Depository to the extent possible with respect to such
Securities in connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of Securities
collateral. Securities and money deposited in either the Book-Entry System
or the Depository will be represented in accounts which include only assets
held by the Custodian for customers, including, but not limited to,
accounts in which the Custodian acts in a fiduciary or representative
capacity and will be specifically allocated on the Custodian's books to the
separate account for the applicable Series. Prior to the Custodian's
accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series as
provided in this Agreement, the Custodian shall have received a certified
resolution of the Fund's Board of Directors, substantially in the form of
Exhibit C hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary by a
Certificate actually received by the Custodian, to accept, utilize and act
in accordance with such confirmations as provided in this Agreement with
respect to such Series.
2. The Custodian shall establish and maintain separate accounts, in the name
of each Series, and shall credit to the separate account for each Series
all money received by it for the account of the Fund with respect to such
Series. Money credited to a separate account for a Series shall be
disbursed by the Custodian only:
(a) as hereinafter provided;
(b) pursuant to Certificates setting forth the name and address of the
person to whom the payment is to be made, the Series account from
which payment is to be made and the purpose for which payment is to be
made; or
(c) in payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the Custodian shall
furnish the Fund with confirmations and a summary, on a per Series basis,
of all transfers to or from the account of the Fund for a Series, either
hereunder or with any co-custodian or sub-custodian appointed in accordance
with this Agreement during said day. Where Securities are transferred to
the account of the Fund for a Series, the Custodian shall also by
book-entry or otherwise identify as belonging to such Series a quantity of
Securities in a fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on the books
of the Book-Entry System or the Depository. At least monthly and from time
to time, the Custodian shall furnish the Fund with a detailed statement, on
a per Series basis, of the Securities and money held by the Custodian for
the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, all Securities held by the Custodian hereunder, which are issued or
issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the
name of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Fund agrees to furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee or in the
name of the Book-Entry System or the Depository any Securities which it may
hold hereunder and which may from time to time be registered in the name of
the Fund. The Custodian shall hold all such Securities specifically
allocated to a Series which are not held in the Book-Entry System or in the
Depository in a separate account in the name of such Series physically
segregated at all times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or
through the use of the Book-Entry System or the Depository with respect to
Securities held hereunder and therein deposited, shall with respect to all
Securities held for the Fund hereunder in accordance with preceding
paragraph 4:
(a) collect all income, dividends and distributions due or payable;
(b) give notice to the Fund and present payment and collect the amount
payable upon such Securities which are called, but only if either (i)
the Custodian receives a written notice of such call, or (ii) notice
of such call appears in one or more of the publications listed in
Appendix C annexed hereto, which may be amended at any time by the
Custodian without the prior notification or consent of the Fund;
(c) present for payment and collect the amount payable upon all Securities
which mature;
(d) surrender Securities in temporary form for definitive Securities;
(e) execute, as custodian, any necessary declarations or certificates of
ownership under the Federal Income Tax Laws or the laws or regulations
of any other taxing authority now or hereafter in effect;
(f) hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of a Series,
all rights and similar securities issued with respect to any
Securities held by the Custodian for such Series hereunder; and
(g) deliver to the Fund all notices, proxies, proxy soliciting materials,
consents and other written information (including, without limitation,
notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to
Securities held pursuant to this Agreement which are actually received
by the Custodian, such proxies and other similar materials to be
executed by the registered owner (if Securities are registered
otherwise than in the name of the Fund), but without indicating the
manner in which proxies or consents are to be voted.
6. Upon receipt of a Certificate and not otherwise, the Custodian, directly or
through the use of the Book-Entry System or the Depository, shall:
(a) execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any
Securities held by the Custodian hereunder for the Series specified in
such Certificate may be exercised;
(b) deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate in exchange for other Securities or cash
issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege and receive
and hold hereunder specifically allocated to such Series any cash or
other Securities received in exchange;
(c) deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and hold hereunder
specifically allocated to such Series such certificates of deposit,
interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
(d) make such transfers or exchanges of the assets of the Series specified
in such Certificate, and take such other steps as shall be stated in
such Certificate to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger, consolidation
or recapitalization of the Fund; and
(e) present for payment and collect the amount payable upon Securities not
described in preceding paragraph 5(b) of this Article which may be
called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the Custodian
shall not be required to obtain possession of any instrument or certificate
representing any Futures Contract, any Option, or any Futures Contract
Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or
certificates are available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the availability of
any such instrument or certificate. Prior to such availability, the
Custodian shall comply with Section 17(f) of the Investment Company Act of
1940, as amended, in connection with the purchase, sale, settlement,
closing out or writing of Futures Contracts, Options, or Futures Contract
Options by making payments or deliveries specified in Certificates received
by the Custodian in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer, or
futures commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by brokers,
dealers, or futures commission merchants with respect to such Futures
Contracts, Options, or Futures Contract Options, as the case may be,
confirming that such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the name of the
Custodian (or any nominee of the Custodian) as custodian for the Fund,
provided, however, that notwithstanding the foregoing, payments to or
deliveries from the Margin Account, and payments with respect to Securities
to which a Margin Account relates, shall be made in accordance with the
terms and conditions of the Margin Account Agreement. Whenever any such
instruments or certificates are available, the Custodian shall,
notwithstanding any provision in this Agreement to the contrary, make
payment for any Futures Contract, Option, or Futures Contract Option for
which such instruments or such certificates are available only against the
delivery to the Custodian of such instrument or such certificate, and
deliver any Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by
the Custodian of payment therefor. Any such instrument or certificate
delivered to the Custodian shall be held by the Custodian hereunder in
accordance with, and subject to, the provisions of this Agreement.
ARTICLE IV.
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option,
the Fund shall deliver to the Custodian (i) with respect to each purchase
of Securities which are not Money Market Securities, a Certificate, and
(ii) with respect to each purchase of Money Market Securities, a
Certificate or Oral Instructions, specifying with respect to each such
purchase:
(a) the Series to which such Securities are to be specifically allocated;
(b) the name of the issuer and the title of the Securities;
(c) the number of shares or the principal amount purchased and accrued
interest, if any;
(d) the date of purchase and settlement;
(e) the purchase price per unit;
(f) the total amount payable upon such purchase;
(g) the name of the person from whom or the broker through whom the
purchase was made, and the name of the clearing broker, if any; and
(h) the name of the broker to whom payment is to be made. The Custodian
shall, upon receipt of Securities purchased by or for the Fund, pay to
the broker specified in the Certificate out of the money held for the
account of such Series the total amount payable upon such purchase,
provided that the same conforms to the total amount payable as set
forth in such Certificate or Oral Instructions.
2. Promptly after each sale of Securities by the Fund, other than a sale of
any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase Agreement, the Fund shall deliver to the Custodian (i) with
respect to each sale of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each sale of Money Market Securities,
a Certificate or Oral Instructions, specifying with respect to each such
sale:
(a) the Series to which such Securities were specifically allocated;
(b) the name of the issuer and the title of the Security;
(c) the number of shares or principal amount sold, and accrued interest,
if any;
(d) the date of sale;
(e) the sale price per unit;
(f) the total amount payable to the Fund upon such sale;
(g) the name of the broker through whom or the person to whom the sale was
made, and the name of the clearing broker, if any; and (h) the name of
the broker to whom the Securities are to be delivered. The Custodian
shall deliver the Securities specifically allocated to such Series to
the broker specified in the Certificate against payment of the total
amount payable to the Fund upon such sale, provided that the same
conforms to the total amount payable as set forth in such Certificate
or Oral Instructions.
ARTICLE V.
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund shall
deliver to the Custodian a Certificate specifying with respect to each
Option purchased:
(a) the Series to which such Option is specifically allocated;
(b) the type of Option (put or call);
(c) the name of the issuer and the title and number of shares subject to
such Option or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Stock Index Options
purchased;
(d) the expiration date;
(e) the exercise price;
(f) the dates of purchase and settlement;
(g) the total amount payable by the Fund in connection with such purchase;
(h) the name of the Clearing Member through whom such Option was
purchased; and
(i) the name of the broker to whom payment is to be made. The Custodian
shall pay, upon receipt of a Clearing Member's statement confirming
the purchase of such Option held by such Clearing Member for the
account of the Custodian (or any duly appointed and registered nominee
of the Custodian) as custodian for the Fund, out of money held for the
account of the Series to which such Option is to be specifically
allocated, the total amount payable upon such purchase to the Clearing
Member through whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant to
paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such sale:
(a) the Series to which such Option was specifically allocated;
(b) the type of Option (put or call);
(c) the name of the issuer and the title and number of shares subject to
such Option or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Stock Index Options
sold;
(d) the date of sale;
(e) the sale price;
(f) the date of settlement;
(g) the total amount payable to the Fund upon such sale; and
(h) the name of the Clearing Member through whom the sale was made. The
Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described
in preceding paragraph 1 of this Article with respect to such Option
against payment to the Custodian of the total amount payable to the
Fund, provided that the same conforms to the total amount payable as
set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased by the
Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Call Option:
(a) the Series to which such Call Option was specifically allocated;
(b) the name of the issuer and the title and number of shares subject to
the Call Option;
(c) the expiration date;
(d) the date of exercise and settlement;
(e) the exercise price per share;
(f) the total amount to be paid by the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Call Option was
exercised. The Custodian shall, upon receipt of the Securities
underlying the Call Option which was exercised, pay out of the money
held for the account of the Series to which such Call Option was
specifically allocated the total amount payable to the Clearing Member
through whom the Call Option was exercised, provided that the same
conforms to the total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased by the
Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Put Option:
(a) the Series to which such Put Option was specifically allocated;
(b) the name of the issuer and the title and number of shares subject to
the Put Option;
(c) the expiration date;
(d) the date of exercise and settlement;
(e) the exercise price per share;
(f) the total amount to be paid to the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Put Option was
exercised. The Custodian shall, upon receipt of the amount payable
upon the exercise of the Put Option, deliver or direct the Depository
to deliver the Securities specifically allocated to such Series,
provided the same conforms to the amount payable to the Fund as set
forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Stock Index Option:
(a) the Series to which such Stock Index Option was specifically
allocated;
(b) the type of Stock Index Option (put or call);
(c) the number of Options being exercised;
(d) the stock index to which such Option relates;
(e) the expiration date;
(f) the exercise price;
(g) the total amount to be received by the Fund in connection with such
exercise; and (h) the Clearing Member from whom such payment is to be
received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such
Covered Call Option:
(a) the Series for which such Covered Call Option was written;
(b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same;
(c) the expiration date;
(d) the exercise price;
(e) the premium to be received by the Fund;
(f) the date such Covered Call Option was written; and
(g) the name of the Clearing Member through whom the premium is to be
received. The Custodian shall deliver or cause to be delivered, in
exchange for receipt of the premium specified in the Certificate with
respect to such Covered Call Option, such receipts as are required in
accordance with the customs prevailing among Clearing Members dealing
in Covered Call Options and shall impose, or direct the Depository to
impose, upon the underlying Securities specified in the Certificate
specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the
Custodian has the right, upon prior written notification to the Fund,
at any time to refuse to issue any receipts for Securities in the
possession of the Custodian and not deposited with the Depository
underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to
deliver, or to direct the Depository to deliver, the Securities subject to
such Covered Call Option and specifying:
(a) the Series for which such Covered Call Option was written;
(b) the name of the issuer and the title and number of shares subject to
the Covered Call Option;
(c) the Clearing Member to whom the underlying Securities are to be
delivered; and
(d) the total amount payable to the Fund upon such delivery. Upon the
return and/or cancellation of any receipts delivered pursuant to
paragraph 6 of this Article, the Custodian shall deliver, or direct
the Depository to deliver, the underlying Securities as specified in
the Certificate against payment of the amount to be received as set
forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to such Put Option:
(a) the Series for which such Put Option was written;
(b) the name of the issuer and the title and number of shares for which
the Put Option is written and which underlie the same;
(c) the expiration date;
(d) the exercise price;
(e) the premium to be received by the Fund;
(f) the date such Put Option is written;
(g) the name of the Clearing Member through whom the premium is to be
received and to whom a Put Option guarantee letter is to be delivered;
(h) the amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior
Security Account for such Series; and
(i) the amount of cash and/or the amount and kind of Securities
specifically allocated to such Series to be deposited into the
Collateral Account for such Series. The Custodian shall, after making
the deposits into the Collateral Account specified in the Certificate,
issue a Put Option guarantee letter substantially in the form utilized
by the Custodian on the date hereof, and deliver the same to the
Clearing Member specified in the Certificate against receipt of the
premium specified in said Certificate. Notwithstanding the foregoing,
the Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of
the representations contained therein.
9. Whenever a Put Option written by the Fund and described in the preceding
paragraph is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying:
(a) the Series to which such Put Option was written;
(b) the name of the issuer and title and number of shares subject to the
Put Option;
(c) the Clearing Member from whom the underlying Securities are to be
received;
(d) the total amount payable by the Fund upon such delivery;
(e) the amount of cash and/or the amount and kind of Securities
specifically allocated to such Series to be withdrawn from the
Collateral Account for such Series and
(f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such Series, if any, to be withdrawn from
the Senior Security Account. Upon the return and/or cancellation of
any Put Option guarantee letter or similar document issued by the
Custodian in connection with such Put Option, the Custodian shall pay
out of the money held for the account of the Series to which such Put
Option was specifically allocated the total amount payable to the
Clearing Member specified in the Certificate as set forth in such
Certificate against delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option:
(a) the Series for which such Stock Index Option was written;
(b) whether such Stock Index Option is a put or a call;
(c) the number of options written;
(d) the stock index to which such Option relates;
(e) the expiration date;
(f) the exercise price;
(g) the Clearing Member through whom such Option was written;
(h) the premium to be received by the Fund;
(i) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior
Security Account for such Series;
(j) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the
Collateral Account for such Series; and (k) the amount of cash and/or
the amount and kind of Securities, if any, specifically allocated to
such Series to be deposited in a Margin Account, and the name in which
such account is to be or has been established. The Custodian shall,
upon receipt of the premium specified in the Certificate, make the
deposits, if any, into the Senior Security Account specified in the
Certificate, and either (1) deliver such receipts, if any, which the
Custodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index
Options and make the deposits into the Collateral Account specified in
the Certificate, or (2) make the deposits into the Margin Account
specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option:
(a) the Series for which such Stock Index Option was written;
(b) such information as may be necessary to identify the Stock Index
Option being exercised;
(c) the Clearing Member through whom such Stock Index Option is being
exercised;
(d) the total amount payable upon such exercise, and whether such amount
is to be paid by or to the Fund;
(e) the amount of cash and/or amount and kind of Securities, if any, to be
withdrawn from the Margin Account; and
(f) the amount of cash and/or amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account for such Series; and the
amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Collateral Account for such Series. Upon the return
and/or cancellation of the receipt, if any, delivered pursuant to the
preceding paragraph of this Article, the Custodian shall pay out of
the money held for the account of the Series to which such Stock Index
Option was specifically allocated to the Clearing Member specified in
the Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to a previously written
Option described in paragraphs, 6, 8 or 10 of this Article in a transaction
expressly designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to the
Option being purchased:
(a) that the transaction is a Closing Purchase Transaction;
(b) the Series for which the Option was written;
(c) the name of the issuer and the title and number of shares subject to
the Option, or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Options held;
(d) the exercise price;
(e) the premium to be paid by the Fund;
(f) the expiration date;
(g) the type of Option (put or call);
(h) the date of such purchase;
(i) the name of the Clearing Member to whom the premium is to be paid; and
(j) the amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Collateral Account, a specified Margin
Account, or the Senior Security Account for such Series. Upon the
Custodian's payment of the premium and the return and/or cancellation
of any receipt issued pursuant to paragraphs 6, 8 or 10 of this
Article with respect to the Option being liquidated through the
Closing Purchase Transaction, the Custodian shall remove, or direct
the Depository to remove, the previously imposed restrictions on the
Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and upon the return and/or cancellation of any receipts issued by
the Custodian, shall make such withdrawals from the Collateral Account, and
the Margin Account and/or the Senior Security Account as may be specified
in a Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI.
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such
Futures Contract, (or with respect to any number of identical Futures
Contract(s)):
(a) the Series for which the Futures Contract is being entered;
(b) the category of Futures Contract (the name of the underlying stock
index or financial instrument);
(c) the number of identical Futures Contracts entered into;
(d) the delivery or settlement date of the Futures Contract(s);
(e) the date the Futures Contract(s) was (were) entered into and the
maturity date;
(f) whether the Fund is buying (going long) or selling (going short) on
such Futures Contract(s);
(g) the amount of cash and/or the amount and kind of Securities, if any,
to be deposited in the Senior Security Account for such Series;
(h) the name of the broker, dealer, or futures commission merchant through
whom the Futures Contract was entered into; and
(i) the amount of fee or commission, if any, to be paid and the name of
the broker, dealer, or futures commission merchant to whom such amount
is to be paid. The Custodian shall make the deposits, if any, to the
Margin Account in accordance with the terms and conditions of the
Margin Account Agreement. The Custodian shall make payment out of the
money specifically allocated to such Series of the fee or commission,
if any, specified in the Certificate and deposit in the Senior
Security Account for such Series the amount of cash and/or the amount
and kind of Securities specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be made by
the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the
Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
(b) Any variation margin payment or similar payment from a broker, dealer,
or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the
Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is retained by
the Fund until delivery or settlement is made on such Futures Contract, the
Fund shall deliver to the Custodian a Certificate specifying:
(a) the Futures Contract and the Series to which the same relates;
(b) with respect to a Stock Index Futures Contract, the total cash
settlement amount to be paid or received, and with respect to a
Financial Futures Contract, the Securities and/or amount of cash to be
delivered or received;
(c) the broker, dealer, or futures commission merchant to or from whom
payment or delivery is to be made or received; and
(d) the amount of cash and/or Securities to be withdrawn from the Senior
Security Account for such Series. The Custodian shall make the payment
or delivery specified in the Certificate, and delete such Futures
Contract from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a Futures
Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying:
(a) the items of information required in a Certificate described in
paragraph 1 of this Article, and
(b) the Futures Contract being offset. The Custodian shall make payment
out of the money specifically allocated to such Series of the fee or
commission, if any, specified in the Certificate and delete the
Futures Contract being offset from the statements delivered to the
Fund pursuant to paragraph 3 of Article III herein, and make such
withdrawals from the Senior Security Account for such Series as may be
specified in such Certificate. The withdrawals, if any, to be made
from the Margin Account shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
5. Notwithstanding any other provision in this Agreement to the contrary, the
Custodian shall deliver cash and Securities to a futures commission
merchant upon receipt of a Certificate from the Fund specifying:
(a) the name of the futures commission merchant;
(b) the specific cash and Securities to be delivered;
(c) the date of such delivery; and (d) the date of the agreement between
the Fund and such futures commission merchant entered pursuant to Rule
17f-6 under the Investment Company Xxx 0000, as amended. Each delivery
of such a Certificate by the Fund shall constitute (x) a
representation and warranty by the Fund that the Rule 17f-6 agreement
has been duly authorized, executed and delivered by the Fund and the
futures commission merchant and complies with Rule 17f-6, and (y) an
agreement by the Fund that the Custodian shall not be liable for the
acts or omissions of any such futures commission merchant.
ARTICLE VII.
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the Fund, the
Fund shall promptly deliver to the Custodian a Certificate specifying with
respect to such Futures Contract Option:
(a) the Series to which such Option is specifically allocated;
(b) the type of Futures Contract Option (put or call);
(c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Contract Option purchased;
(d) the expiration date;
(e) the exercise price;
(f) the dates of purchase and settlement;
(g) the amount of premium to be paid by the Fund upon such purchase;
(h) the name of the broker or futures commission merchant through whom
such option was purchased; and
(i) the name of the broker, or futures commission merchant, to whom
payment is to be made. The Custodian shall pay out of the money
specifically allocated to such Series, the total amount to be paid
upon such purchase to the broker or futures commissions merchant
through whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by the
Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale:
(a) the Series to which such Futures Contract Option was specifically
allocated;
(b) the type of Futures Contract Option (put or call);
(c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Contract Option;
(d) the date of sale;
(e) the sale price;
(f) the date of settlement;
(g) the total amount payable to the Fund upon such sale; and
(h) the name of the broker or futures commission merchant through whom the
sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian
of the total amount payable to the Fund, provided the same conforms to
the total amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to
the Custodian a Certificate specifying:
(a) the Series to which such Futures Contract Option was specifically
allocated;
(b) the particular Futures Contract Option (put or call) being exercised;
(c) the type of Futures Contract underlying the Futures Contract Option;
(d) the date of exercise;
(e)the name of the broker or futures commission merchant through whom the
Futures Contract Option is exercised;
(f) the net total amount, if any, payable by the Fund;
(g) the amount, if any, to be received by the Fund; and
(h) the amount of cash and/or the amount and kind of Securities to be
deposited in the Senior Security Account for such Series. The
Custodian shall make, out of the money and Securities specifically
allocated to such Series, the payments, if any, and the deposits, if
any, into the Senior Security Account as specified in the Certificate.
The deposits, if any, to be made to the Margin Account shall be made
by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option:
(a) the Series for which such Futures Contract Option was written;
(b) the type of Futures Contract Option (put or call);
(c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Contract Option;
(d) the expiration date;
(e) the exercise price;
(f) the premium to be received by the Fund;
(g) the name of the broker or futures commission merchant through whom the
premium is to be received; and
(h) the amount of cash and/or the amount and kind of Securities, if any,
to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the money and Securities specifically
allocated to such Series the deposits into the Senior Security
Account, if any, as specified in the Certificate. The deposits, if
any, to be made to the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin Account
Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a call is
exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying:
(a) the Series to which such Futures Contract Option was specifically
allocated;
(b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option;
(d) the name of the broker or futures commission merchant through whom
such Futures Contract Option was exercised;
(e) the net total amount, if any, payable to the Fund upon such exercise;
(f) the net total amount, if any, payable by the Fund upon such exercise;
and
(g) the amount of cash and/or the amount and kind of Securities to be
deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to
the Fund, if any, specified in such Certificate make the payments, if
any, and the deposits, if any, into the Senior Security Account as
specified in the Certificate. The deposits, if any, to be made to the
Margin Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and which
is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying:
(a) the Series to which such Option was specifically allocated;
(b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying such Futures Contract Option;
(d) the name of the broker or futures commission merchant through whom
such Futures Contract Option is exercised;
(e) the net total amount, if any, payable to the Fund upon such exercise;
(f) the net total amount, if any, payable by the Fund upon such exercise;
and
(g) the amount and kind of Securities and/or cash to be withdrawn from or
deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to
the Fund, if any, specified in the Certificate, make out of the money
and Securities specifically allocated to such Series, the payments, if
any, and the deposits, if any, into the Senior Security Account as
specified in the Certificate. The deposits to and/or withdrawals from
the Margin Account, if any, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to a
previously written Futures Contract Option described in this Article in
order to liquidate its position as a writer of such Futures Contract
Option, the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to the Futures Contract Option being purchased:
(a) the Series to which such Option is specifically allocated;
(b) that the transaction is a closing transaction;
(c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Option Contract;
(d) the exercise price;
(e) the premium to be paid by the Fund;
(f) the expiration date;
(g) the name of the broker or futures commission merchant to whom the
premium is to be paid; and
(h) the amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security
Account specified in the Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
8. Upon the expiration, exercise, or consummation of a closing transaction
with respect to, any Futures Contract Option written or purchased by the
Fund and described in this Article, the Custodian shall
(a) delete such Futures Contract Option from the statements delivered to
the Fund pursuant to paragraph 3 of Article III herein and,
(b) make such withdrawals from and/or in the case of an exercise such
deposits into the Senior Security Account as may be specified in a
Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a Futures
Contract Option described in this Article shall be subject to Article VI
hereof.
10. Notwithstanding any other provision in this Agreement to the contrary, the
Custodian shall deliver cash and Securities to a futures commission
merchant upon receipt of a Certificate from the Fund specifying:
(a) the name of the futures commission merchant;
(b) the specific cash and Securities to be delivered;
(c) the date of such delivery; and
(d) the date of the agreement between the Fund and such futures commission
merchant entered pursuant to Rule 17f-6 under the Investment Company
Xxx 0000, as amended. Each delivery of such a Certificate by the Fund
shall constitute (x) a representation and warranty by the Fund that
the Rule 17f-6 agreement has been duly authorized, executed and
delivered by the Fund and the futures commission merchant and complies
with Rule 17f-6, and (y) an agreement by the Fund that the Custodian
shall not be liable for the acts or omissions of any such futures
commission merchant.
ARTICLE VIII.
SHORT SALES
1. Prmptly after any short sales by any Series of the Fund, the Fund shall
promptly deliver to the Custodian a Certificate specifying:
(a) the Series for which such short sale was made;
(b) the name of the issuer and the title of the Security;
(c) the number of shares or principal amount sold, and accrued interest or
dividends, if any;
(d) the dates of the sale and settlement;
(e) the sale price per unit;
(f) the total amount credited to the Fund upon such sale, if any,
(g) the amount of cash and/or the amount and kind of Securities, if any,
which are to be deposited in a Margin Account and the name in which
such Margin Account has been or is to be established;
(h) the amount of cash and/or the amount and kind of Securities, if any,
to be deposited in a Senior Security Account, and
(i) the name of the broker through whom such short sale was made. The
Custodian shall upon its receipt of a statement from such broker
confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by
such broker for the account of the Custodian (or any nominee of the
Custodian) as custodian of the Fund, issue a receipt or make the
deposits into the Margin Account and the Senior Security Account
specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
each such closing out:
(a) the Series for which such transaction is being made;
(b) the name of the issuer and the title of the Security;
(c) the number of shares or the principal amount, and accrued interest or
dividends, if any, required to effect such closing-out to be delivered
to the broker;
(d) the dates of closing-out and settlement;
(e) the purchase price per unit;
(f) the net total amount payable to the Fund upon such closing-out;
(g) the net total amount payable to the broker upon such closing-out;
(h) the amount of cash and the amount and kind of Securities to be
withdrawn, if any, from the Margin Account;
(i) the amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Senior Security Account; and
(j) the name of the broker through whom the Fund is effecting such
closing-out. The Custodian shall, upon receipt of the net total amount
payable to the Fund upon such closing-out, and the return and/or
cancellation of the receipts, if any, issued by the Custodian with
respect to the short sale being closed-out, pay out of the money held
for the account of the Fund to the broker the net total amount payable
to the broker, and make the withdrawals from the Margin Account and
the Senior Security Account, as the same are specified in the
Certificate.
ARTICLE IX.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund
shall deliver to the Custodian a Certificate, or in the event such Reverse
Repurchase Agreement is a Money Market Security, a Certificate or Oral
Instructions specifying:
(a) the Series for which the Reverse Repurchase Agreement is entered;
(b) the total amount payable to the Fund in connection with such Reverse
Repurchase Agreement and specifically allocated to such Series;
(c) the broker or dealer through or with whom the Reverse Repurchase
Agreement is entered;
(d) the amount and kind of Securities to be delivered by the Fund to such
broker or dealer;
(e) the date of such Reverse Repurchase Agreement; and
(f) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in a Senior
Security Account for such Series in connection with such Reverse
Repurchase Agreement. The Custodian shall, upon receipt of the total
amount payable to the Fund specified in the Certificate or Oral
Instructions make the delivery to the broker or dealer, and the
deposits, if any, to the Senior Security Account, specified in such
Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money
Market Security, a Certificate or Oral Instructions to the Custodian
specifying:
(a) the Reverse Repurchase Agreement being terminated and the Series for
which same was entered;
(b) the total amount payable by the Fund in connection with such
termination;
(c) the amount and kind of Securities to be received by the Fund and
specifically allocated to such Series in connection with such
termination;
(d) the date of termination;
(e) the name of the broker or dealer with or through whom the Reverse
Repurchase Agreement is to be terminated; and
(f) the amount of cash and/or the amount and kind of Securities to be
withdrawn from the Senior Securities Account for such Series. The
Custodian shall, upon receipt of the amount and kind of Securities to
be received by the Fund specified in the Certificate or Oral
Instructions, make the payment to the broker or dealer, and the
withdrawals, if any, from the Senior Security Account, specified in
such Certificate or Oral Instructions.
ARTICLE X.
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically allocated to
a Series held by the Custodian hereunder, the Fund shall deliver or cause
to be delivered to the Custodian a Certificate specifying with respect to
each such loan:
(a) the Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities,
(c) the number of shares or the principal amount loaned,
(d) the date of loan and delivery,
(e) the total amount to be delivered to the Custodian against the loan of
the Securities, including the amount of cash collateral and the
premium, if any, separately identified, and
(f) the name of the broker, dealer, or financial institution to which the
loan was made. The Custodian shall deliver the Securities thus
designated to the broker, dealer or financial institution to which the
loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept
payment in connection with a delivery otherwise than through the Book-
Entry System or Depository only in the form of a certified or bank
cashier's check payable to the order of the Fund or the Custodian
drawn on New York Clearing House funds and may deliver Securities in
accordance with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by the Fund, the
Fund shall deliver or cause to be delivered to the Custodian a Certificate
specifying with respect to each such loan termination and return of
Securities:
(a) the Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities to be returned,
(c) the number of shares or the principal amount to be returned,
(d) the date of termination,
(e) the total amount to be delivered by the Custodian (including the cash
collateral for such Securities minus any offsetting credits as
described in said Certificate), and
(f) the name of the broker, dealer, or financial institution from which
the Securities will be returned. The Custodian shall receive all
Securities returned from the broker, dealer, or financial institution
to which such Securities were loaned and upon receipt thereof shall
pay, out of the money held for the account of the Fund, the total
amount payable upon such return of Securities as set forth in the
Certificate.
ARTICLE XI.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for
which such deposit or withdrawal is to be made and the amount of cash
and/or the amount and kind of Securities specifically allocated to such
Series to be deposited in, or withdrawn from, such Senior Security Account
for such Series. In the event that the Fund fails to specify in a
Certificate the Series, the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities to be deposited
by the Custodian into, or withdrawn from, a Senior Securities Account, the
Custodian shall be under no obligation to make any such deposit or
withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin Account to
the broker, dealer, futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as specified in the
Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with respect
to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in and to
any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may
enforce its lien and realize on any such property whenever the Custodian
has made payment or delivery pursuant to any Put Option guarantee letter or
similar document or any receipt issued hereunder by the Custodian. In the
event the Custodian should realize on any such property net proceeds which
are less than the Custodian's obligations under any Put Option guarantee
letter or similar document or any receipt, such deficiency shall be a debt
owed the Custodian by the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a statement
with respect to each Margin Account in which money or Securities are held
specifying as of the close of business on the previous business day:
(a) the name of the Margin Account;
(b) the amount and kind of Securities held therein; and
(c) the amount of money held therein. The Custodian shall make available
upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement
furnished the Fund with respect to such Margin Account.
6. Promptly after the close of business on each business day in which cash
and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind
of Securities held therein. No later than the close of business next
succeeding the delivery to the Fund of such statement, the Fund shall
furnish to the Custodian a Certificate specifying the then market value of
the Securities described in such statement. In the event such then market
value is indicated to be less than the Custodian's obligation with respect
to any outstanding Put Option guarantee letter or similar document, the
Fund shall promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to eliminate such
deficiency.
ARTICLE XII.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of the
Board of Directors of the Fund, certified by the Secretary or any Assistant
Secretary, either (i) setting forth with respect to the Series specified
therein the date of the declaration of a dividend or distribution, the date
of payment thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per Share of such Series to
the shareholders of record as of that date and the total amount payable to
the Dividend Agent and any sub-dividend agent or co-dividend agent of the
Fund on the payment date, or (ii) authorizing with respect to the Series
specified therein the declaration of dividends and distributions on a daily
basis and authorizing the Custodian to rely on Oral Instructions or a
Certificate setting forth the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and
the total amount payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral Instructions or
Certificate, as the case may be, the Custodian shall pay out of the money
held for the account of each Series the total amount payable to the
Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund
with respect to such Series.
ARTICLE XIII.
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the Custodian
a Certificate duly specifying:
(a) the Series, the number of Shares sold, trade date, and price; and
(b) the amount of money to be received by the Custodian for the sale of
such Shares and specifically allocated to the separate account in the
name of such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian shall
credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held
for the account of such Series, all original issue or other taxes required
to be paid by the Fund in connection with such issuance upon the receipt of
a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the Custodian to
make payment out of the money held by the Custodian hereunder in connection
with a redemption of any Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) the number and Series of Shares redeemed; and
(b) the amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the Series
and number of Shares received by the Transfer Agent for redemption and that
such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the money held in the separate account
in the name of the Series the total amount specified in the Certificate
issued pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the
Custodian, unless otherwise instructed by a Certificate, shall, upon
receipt of an advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check
redemption privilege out of the money held in the separate account of the
Series of the Shares being redeemed.
ARTICLE XIV.
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds on behalf of
any Series which results in an overdraft because the money held by the
Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate or Oral
Instructions, or which results in an overdraft in the separate account of
such Series for some other reason, or if the Fund is for any other reason
indebted to the Custodian with respect to a Series, including any
indebtedness to The Bank of New York under the Fund's Cash Management and
Related Services Agreement (except a borrowing for investment or for
temporary or emergency purposes using Securities as collateral pursuant to
a separate agreement and subject to the provisions of paragraph 2 of this
Article), such overdraft or indebtedness shall be deemed to be a loan made
by the Custodian to the Fund for such Series payable on demand and shall
bear interest from the date incurred at a rate per annum (based on a 360-
day year for the actual number of days involved) equal to 1/2% over
Custodian's prime commercial lending rate in effect from time to time, such
rate to be adjusted on the effective date of any change in such prime
commercial lending rate but in no event to be less than 6% per annum. In
addition, the Fund hereby agrees that the Custodian shall have a continuing
lien, security interest, and security entitlement in and to any property
including any investment property or any financial asset specifically
allocated to such Series at any time held by it for the benefit of such
Series or in which the Fund may have an interest which is then in the
Custodian's possession or control or in possession or control of any third
party acting in the Custodian's behalf. The Fund authorizes the Custodian,
in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of
account standing to such Series' credit on the Custodian's books. In
addition, the Fund hereby covenants that on each Business Day on which
either it intends to enter a Reverse Repurchase Agreement and/or otherwise
borrow from a third party, or which next succeeds a Business Day on which
at the close of business the Fund had outstanding a Reverse Repurchase
Agreement or such a borrowing, it shall prior to 9 a.m., New York City
time, advise the Custodian, in writing, of each such borrowing, shall
specify the Series to which the same relates, and shall not incur any
indebtedness not so specified other than from the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities held by the Custodian hereunder as
collateral for such borrowings, a notice or undertaking in the form
currently employed by any such bank setting forth the amount which such
bank will loan to the Fund against delivery of a stated amount of
collateral. The Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such borrowing:
(a) the Series to which such borrowing relates;
(b) the name of the bank,
(c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed
by the Fund, or other loan agreement,
(d) the time and date, if known, on which the loan is to be entered into,
(e) the date on which the loan becomes due and payable,
(f) the total amount payable to the Fund on the borrowing date,
(g) the market value of Securities to be delivered as collateral for such
loan, including the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities, and
(h) a statement specifying whether such loan is for investment purposes or
for temporary or emergency purposes and that such loan is in
conformance with the Investment Company Act of 1940 and the Fund's
prospectus. The Custodian shall deliver on the borrowing date
specified in a Certificate the specified collateral and the executed
promissory note, if any, against delivery by the lending bank of the
total amount of the loan payable, provided that the same conforms to
the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral
in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or
loan agreement. The Custodian shall deliver such Securities as
additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this paragraph. The
Fund shall cause all Securities released from collateral status to be
returned directly to the Custodian, and the Custodian shall receive
from time to time such return of collateral as may be tendered to it.
In the event that the Fund fails to specify in a Certificate the
Series, the name of the issuer, the title and number of shares or the
principal amount of any particular Securities to be delivered as
collateral by the Custodian, the Custodian shall not be under any
obligation to deliver any Securities.
ARTICLE XV.
INSTRUCTIONS
1. With respect to any software provided by the Custodian to a Fund in order
for the Fund to transmit Instructions to the Custodian (the "Software"),
the Custodian grants to such Fund a personal, nontransferable and
nonexclusive license to use the Software solely for the purpose of
transmitting Instructions to, and receiving communications from, the
Custodian in connection with its account(s). The Fund shall use the
Software solely for its own internal and proper business purposes, and not
in the operation of a service bureau, and agrees not to sell, reproduce,
lease or otherwise provide, directly or indirectly, the Software or any
portion thereof to any third party without the prior written consent of the
Custodian. The Fund acknowledges that the Custodian and its suppliers have
title and exclusive proprietary rights to the Software, including any trade
secrets or other ideas, concepts, know how, methodologies, or information
incorporated therein and the exclusive rights to any copyrights, trademarks
and patents (including registrations and applications for registration of
either) or statutory or legal protections available with respect thereof.
The Fund further acknowledges that all or a part of the Software may be
copyrighted or trademarked (or a registration or claim made therefor) by
the Custodian or its suppliers. The Fund shall not take any action with
respect to the Software inconsistent with the foregoing acknowledgments,
nor shall the Fund attempt to decompile, reverse engineer or modify the
Software. The Fund may not copy, sell, lease or provide, directly or
indirectly, any of the Software or any portion thereof to any other person
or entity without the Custodian's prior written consent. The Fund may not
remove any statutory copyright notice, or other notice including the
software or on any media containing the Software. The Fund shall reproduce
any such notice on any reproduction of the Software and shall add statutory
copyright notice or other notice to the Software or media upon the Bank's
request. Custodian agrees to provide reasonable training, instruction
manuals and access to Custodian's "help desk" in connection with the Fund's
user support necessary to use of the Software. At the Fund's request,
Custodian agrees to permit reasonable testing of the Software by the Fund.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and transmit
Instructions to the Custodian. The Custodian shall not be responsible for
the reliability, compatibility with the Software or availability of any
such equipment or services or the performance or nonperformance by any
nonparty to this Custody Agreement.
3. The Fund acknowledges that the Software, all data bases made available to
the Fund by utilizing the Software (other than data bases relating solely
to the assets of the Fund and transactions with respect thereto), and any
proprietary data, processes, information and documentation (other than
which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of the Custodian. The Fund shall keep
the Information confidential by using the same care and discretion that the
Fund uses with respect to its own confidential property and trade secrets
and shall neither make nor permit any disclosure without the prior written
consent of the Custodian. Upon termination of this Agreement or the
Software license granted hereunder for any reason, the Fund shall return to
the Custodian all copies of the Information which are in its possession or
under its control or which the Fund distributed to third parties. The
provisions of this Article shall not affect the copyright status of any of
the Information which may be copyrighted and shall apply to all Information
whether or not copyrighted.
4. The Custodian reserves the right to modify, at its own expense, the
Software from time to time without prior notice and the Fund shall install
new releases of the Software as the Custodian may direct. The Fund agrees
not to modify or attempt to modify the Software without the Custodian's
prior written consent. The Fund acknowledges that any modifications to the
Software, whether by the Fund or the Custodian and whether with or without
the Custodian's consent, shall become the property of the Custodian.
5. The Custodian and its manufacturers and suppliers make no warranties or
representations of any kind with regard to the Software or the method(s) by
which the Fund may transmit Instructions to the Custodian, express or
implied, including but not limited to any implied warranties of
merchantability or fitness for a particular purpose.
6. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES
LAW. THE FUND AGREES THAT IT WILL NOT UNDER ANY CIRCUMSTANCES RESELL,
DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY
FORM) IN OR TO ANY OTHER COUNTRY. IF THE CUSTODIAN DELIVERS THE SOFTWARE TO
THE FUND OUTSIDE THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE
UNITED STATES IN ACCORDANCE WITH EXPORT ADMINISTRATIVE REGULATIONS.
DIVERSION CONTRARY TO U.S. LAWS PROHIBITED. The Fund hereby authorizes
Custodian to report its name and address to government agencies to which
Custodian is required to provide such information by law.
7. Where the method for transmitting Instructions by the Fund involves an
automatic systems acknowledgment by the Custodian of its receipt of such
Instructions, then in the absence of such acknowledgment the Custodian
shall not be liable for any failure to act pursuant to such Instructions,
the Fund may not claim that such Instructions were received by the
Custodian, and the Fund shall deliver a Certificate by some other means.
8. (a) The Fund agrees that where it delivers to the Custodian Instructions
hereunder, it shall be the Fund's sole responsibility to ensure that
only persons duly authorized by the Fund transmit such Instructions to
the Custodian. The Fund will cause all persons transmitting
Instructions to the Custodian to treat applicable user and
authorization codes, passwords and authentication keys with extreme
care, and irrevocably authorizes the Custodian to act in accordance
with and rely upon Instructions received by it pursuant hereto.
(b) The Fund hereby represents, acknowledges and agrees that it is fully
informed of the protections and risks associated with the various
methods of transmitting Instructions to the Custodian and that there
may be more secure methods of transmitting instructions to the
Custodian than the method(s) selected by the Fund. The Fund hereby
agrees that the security procedures (if any) to be followed in
connection with the Fund's transmission of Instructions provide to it
a commercially reasonable degree of protection in light of its
particular needs and circumstances.
9. The Fund hereby represents, warrants and covenants to the Custodian that
this Agreement has been duly approved by a resolution of its Board of
Directors, and that its transmission of Instructions pursuant hereto shall
at all times comply with the Investment Company Act.
10. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, its ability to send
Instructions as promptly as practicable, and in any event within 24 hours
after the earliest of (i) discovery thereof, (ii) the Business Day on which
discovery should have occurred through the exercise of reasonable care and
(iii) in the case of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that discovery and
receipt of notice may only occur on a business day. The Custodian shall
promptly advise the Fund whenever the Custodian learns of any errors,
omissions or interruption in, or delay or unavailability of, the Fund's
ability to send Instructions.
11. Custodian will indemnify and hold harmless the Fund with respect to any
liability, damages, loss or claim incurred by or brought against Fund by
reason any claim or infringement against any patent, copyright, license or
other property right arising out or by reason of the Fund's use of the
Software in the form provided under this Section. Custodian at its own
expense will defend such action or claim brought against Fund to the extent
that it is based on a claim that the Software in the form provided by
Custodian infringes any patents, copyrights, license or other property
right, provided that Custodian is provided with reasonable written notice
of such claim, provided that the Fund has not settled, compromised or
confessed any such claim without the Custodian's written consent, in which
event Custodian shall have no liability or obligation hereunder, and
provided Fund cooperates with and assists Custodian in the defense of such
claim. Custodian shall have the right to control the defense of all such
claims, lawsuits and other proceedings. If, as a result of any claim of
infringement against any patent, copyright, license or other property
right, Custodian is enjoined from using the Software, or if Custodian
believes that the System is likely to become the subject of a claim of
infringement, Custodian at its option may in its sole discretion either
(a) at its expenses procure the right for the Fund to continue to use the
Software, or
(b), replace or modify the Software so as to make it non-infringing, or
(c) may discontinue the license granted herein upon written notice to
Fund.
ARTICLE XVI.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as sub-custodian for
each Series' Securities for which the primary market is outside the United
States ("Foreign Securities") and other assets, the foreign banking
institutions, foreign branches of U.S. banks, and foreign securities
depositories and clearing agencies designated on Schedule I hereto
("Foreign Sub-Custodians"). The Fund may designate any additional foreign
sub-custodian with which the Custodian has an agreement for such entity to
act as the Custodian's agent, as its sub-custodian and any such additional
foreign sub-custodian shall be deemed added to Schedule I. Upon receipt of
a Certificate from the Fund, the Custodian shall cease the employment of
any one or more Foreign Sub-Custodians for maintaining custody of the
Fund's assets and such Foreign Sub-Custodian shall be deemed deleted from
Schedule I.
2. Each delivery of a Certificate to the Custodian in connection with a
transaction involving the use of a Foreign Sub-Custodian shall constitute a
representation and warranty by the Fund that its Board of Directors, or its
third party foreign custody manager as defined in Rule 17f-5 under the
Investment Company Act of 1940, as amended, if any, has determined that use
of such Foreign Sub-Custodian satisfies the requirements of such Investment
Company Act of 1940 and such Rule 17f-5 thereunder.
3. The Custodian shall identify on its books as belonging to each Series of
the Fund the Foreign Securities of such Series held by each Foreign
Sub-Custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by the
Fund or any Series against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or incurred by
the Fund or any Series if and to the extent that the Fund or such Series
has not been made whole for any such loss, damage, cost, expense, liability
or claim.
4. Upon request of the Fund, the Custodian will, consistent with the terms of
the applicable Foreign Sub-Custodian agreement, use reasonable efforts to
arrange for the independent accountants of the Fund to be afforded access
to the books and records of any Foreign Sub-Custodian insofar as such books
and records relate to the performance of such Foreign Sub-Custodian under
its agreement with the Custodian on behalf of the Fund.
5. The Custodian will supply to the Fund from time to time, as mutually agreed
upon, statements in respect of the securities and other assets of each
Series held by Foreign Sub-Custodians, including but not limited to an
identification of entities having possession of each Series' Foreign
Securities and other assets, and advices or notifications of any transfers
of Foreign Securities to or from each custodial account maintained by a
Foreign Sub-Custodian for the Custodian on behalf of the Series.
6. The Custodian shall transmit promptly to the Fund all notices, reports or
other written information received pertaining to the Fund's Foreign
Securities, including without limitation, notices of corporate action,
proxies and proxy solicitation materials.
7. Notwithstanding any provision of this Agreement to the contrary, settlement
and payment for securities received for the account of any Series and
delivery of securities maintained for the account of such Series may be
effected in accordance with the customary or established securities trading
or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivery of securities to the purchaser thereof or to a dealer therefor (or
an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer.
8. Notwithstanding any other provision in this Agreement to the contrary, with
respect to any losses or damages arising out of or relating to any actions
or omissions of any Foreign Sub-Custodian the sole responsibility and
liability of the Custodian shall be to take appropriate action at the
Fund's expense to recover such loss or damage from the Foreign
Sub-Custodian. It is expressly understood and agreed that the Custodian's
sole responsibility and liability shall be limited to amounts so recovered
from the Foreign Sub-Custodian.
ARTICLE XVII.
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the Fund shall
promptly deliver to the Custodian a Certificate or Oral Instructions
specifying with respect to such FX Transaction:
(a) the Series to which such FX Transaction is specifically allocated;
(b) the type and amount of Currency to be purchased by the Fund;
(c) the type and amount of Currency to be sold by the Fund;
(d) the date on which the Currency to be purchased is to be delivered;
(e) the date on which the Currency to be sold is to be delivered; and
(f) the name of the person from whom or through whom such currencies are
to be purchased and sold. Unless otherwise instructed by a Certificate
or Oral Instructions, the Custodian shall deliver, or shall instruct a
Foreign Sub-Custodian to deliver, the Currency to be sold on the date
on which such delivery is to be made, as set forth in the Certificate,
and shall receive, or instruct a Foreign Sub-Custodian to receive, the
Currency to be purchased on the date as set forth in the Certificate.
2. Where the Currency to be sold is to be delivered on the same day as the
Currency to be purchased, as specified in the Certificate or Oral
Instructions, the Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs
prevailing from time to time among brokers or dealers in Currencies, and
such receipt and delivery may not be completed simultaneously. The Fund
assumes all responsibility and liability for all credit risks involved in
connection with such receipts and deliveries, which responsibility and
liability shall continue until the Currency to be received by the Fund has
been received in full.
3. Any FX Transaction effected by the Custodian in connection with this
Agreement may be entered with the Custodian, any office, branch or
subsidiary of The Bank of New York Company, Inc., or any Foreign
Sub-Custodian acting as principal or otherwise through customary banking
channels. The Fund may issue a standing Certificate with respect to FX
Transaction but the Custodian may establish rules or limitations concerning
any foreign exchange facility made available to the Fund. The Fund shall
bear all risks of investing in Securities or holding Currency. Without
limiting the foregoing, the Fund shall bear the risks that rules or
procedures imposed by a Foreign Sub-Custodian or foreign depositories,
exchange controls, asset freezes or other laws, rules, regulations or
orders shall prohibit or impose burdens or costs on the transfer to, by or
for the account of the Fund of Securities or any cash held outside the
Fund's jurisdiction or denominated in Currency other than its home
jurisdiction or the conversion of cash from one Currency into another
currency. The Custodian shall not be obligated to substitute another
Currency for a Currency (including a Currency that is a component of a
Composite Currency Unit) whose transferability, convertibility or
availability has been affected by such law, regulation, rule or procedure.
Neither the Custodian nor any Foreign Sub-Custodian shall be liable to the
Fund for any loss resulting from any of the foregoing events.
ARTICLE XVIII.
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in Article XVI, neither the
Custodian nor its nominee shall be liable for any loss or damage, including
counsel fees, resulting from its action or omission to act or otherwise,
either hereunder or under any Margin Account Agreement, except for any such
loss or damage arising out of its own negligence or willful misconduct. In
no event shall the Custodian be liable to the Fund or any third party for
special, indirect or consequential damages or lost profits or loss of
business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of
the form of action. The Custodian may, with respect to questions of law
arising hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund, or of its own
counsel, at the expense of the Fund, and shall be fully protected with
respect to anything done or omitted by it in good faith in conformity with
such advice or opinion. The Custodian shall be liable to the Fund for any
loss or damage resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence or willful misconduct on the
part of the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) the validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or
writing thereof, or the propriety of the amount paid or received
therefor;
(b) the legality of the sale or redemption of any Shares, or the propriety
of the amount to be received or paid therefor;
(c) the legality of the declaration or payment of any dividend by the
Fund;
(d) the legality of any borrowing by the Fund using Securities as
collateral;
(e) the legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial
institution or held by it at any time as a result of such loan of
portfolio Securities of the Fund is adequate collateral for the Fund
against any loss it might sustain as a result of such loan. The
Custodian specifically, but not by way of limitation, shall not be
under any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund is
sufficient collateral for the Fund, but such duty or obligation shall
be the sole responsibility of the Fund. In addition, the Custodian
shall be under no duty or obligation to see that any broker, dealer or
financial institution to which portfolio Securities of the Fund are
lent pursuant to Article X of this Agreement makes payment to it of
any dividends or interest which are payable to or for the account of
the Fund during the period of such loan or at the termination of such
loan, provided, however, that the Custodian shall promptly notify the
Fund in the event that such dividends or interest are not paid and
received when due; or
(f) the sufficiency or value of any amounts of money and/or Securities
held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund. In addition, the
Custodian shall be under no duty or obligation to see that any broker,
dealer, futures commission merchant or Clearing Member makes payment
to the Fund of any variation margin payment or similar payment which
the Fund may be entitled to receive from such broker, dealer, futures
commission merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures commission
merchant or Clearing Member is the amount the Fund is entitled to
receive, or to notify the Fund of the Custodian's receipt or
non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the Custodian
of, any money, whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money directly or
by the final crediting of the account representing the Fund's interest at
the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable for
ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to Securities
held in the Depository, unless the Custodian shall have actually received
timely notice from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to collect,
or for the late collection or late crediting by the Depository of any
amount payable upon Securities deposited in the Depository which may mature
or be redeemed, retired, called or otherwise become payable. However, upon
receipt of a Certificate from the Fund of an overdue amount on Securities
held in the Depository the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian shall not be
under any obligation to appear in, prosecute or defend any action, suit or
proceeding in respect to any Securities held by the Depository which in its
opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often
as may be required.
5. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount due to the Fund from the Transfer Agent of
the Fund nor to take any action to effect payment or distribution by the
Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount if the Securities upon which such amount is
payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action
by a Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
7. The Custodian may in addition to the employment of Foreign Sub-Custodians
pursuant to Article XVI appoint one or more banking institutions as
Depository or Depositories, as Sub-Custodian or Sub- Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and money at any
time owned by the Fund, upon such terms and conditions as may be approved
in a Certificate or contained in an agreement executed by the Custodian,
the Fund and the appointed institution.
8. The Custodian shall not be under any duty or obligation (a) to ascertain
whether any Securities at any time delivered to, or held by it or by any
Foreign Sub-Custodian, for the account of the Fund and specifically
allocated to a Series are such as properly may be held by the Fund or such
Series under the provisions of its then current prospectus, or (b) to
ascertain whether any transactions by the Fund, whether or not involving
the Custodian, are such transactions as may properly be engaged in by the
Fund.
9. The Custodian shall be entitled to receive and the Fund agrees to pay to
the Custodian all out-of-pocket expenses and such compensation as may be
agreed upon from time to time between the Custodian and the Fund. The
Custodian may charge such compensation and any expenses with respect to a
Series incurred by the Custodian in the performance of its duties pursuant
to such agreement against any money specifically allocated to such Series.
Unless and until the Fund instructs the Custodian by a Certificate to
apportion any loss, damage, liability or expense among the Series in a
specified manner, the Custodian shall also be entitled to charge against
any money held by it for the account of a Series such Series' pro rata
share (based on such Series, net asset value at the time of the charge to
the aggregate net asset value of all Series at that time) of the amount of
any loss, damage, liability or expense, including counsel fees, for which
it shall be entitled to reimbursement under the provisions of this
Agreement. The expenses for which the Custodian shall be entitled to
reimbursement hereunder shall include, but are not limited to, the expenses
of sub-custodians and foreign branches of the Custodian incurred in
settling outside of New York City transactions involving the purchase and
sale of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any Certificate, notice or
other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be
entitled to rely upon any Oral Instructions actually received by the
Custodian hereinabove provided for. The Fund agrees to forward to the
Custodian a Certificate or facsimile thereof confirming such Oral
Instructions in such manner so that such Certificate or facsimile thereof
is received by the Custodian, whether by hand delivery, telecopier or other
similar device, or otherwise, by the close of business of the same day that
such Oral Instructions are given to the Custodian. The Fund agrees that the
fact that such confirming instructions are not received, or that contrary
instructions are received, by the Custodian shall in no way affect the
validity of the transactions or enforceability of the transactions hereby
authorized by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions given to the
Custodian hereunder concerning such transactions provided such instructions
reasonably appear to have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument, instruction or
notice received by the Custodian and reasonably believed by the Custodian
to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained in any
such instrument or other notice including, without limitation, any
specification of any amount to be paid to a broker, dealer, futures
commission merchant or Clearing Member.
12. The books and records pertaining to the Fund which are in the possession of
the Custodian shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the Investment Company Act
of 1940, as amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Custodian's normal business
hours. Upon the reasonable request of the Fund, copies of any such books
and records shall be provided by the Custodian to the Fund or the Fund's
authorized representative, and the Fund shall reimburse the Custodian its
expenses of providing such copies. Upon reasonable request of the Fund, the
Custodian shall provide in hard copy or on micro-film, whichever the
Custodian elects, any records included in any such delivery which are
maintained by the Custodian on a computer disc, or are similarly
maintained, and the Fund shall reimburse the Custodian for its expenses of
providing such hard copy or micro-film.
13. The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book- Entry
System, the Depository or O.C.C., and with such reports on its own systems
of internal accounting control as the Fund may reasonably request from time
to time.
14. The Fund agrees to indemnify the Custodian against and save the Custodian
harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising or incurred because of or in
connection with this Agreement, including the Custodian's payment or
non-payment of checks pursuant to paragraph 6 of Article XIII as part of
any check redemption privilege program of the Fund, except for any such
liability, claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct. The Custodian shall promptly after
receipt of notice of a claim or commencement of any action, notify the Fund
in writing of the claim or the commencement of such action, and in the
event that such prompt notice is not provided the Fund shall not be liable
to the extent the delay in providing prompt notice increases the liability
of the Fund. The Custodian shall not settle any claim or action without the
Fund's prior written consent, which consent shall not be unreasonably
withheld.
15. Subject to the foregoing provisions of this Agreement, including, without
limitation, those contained in Article XVI and XVII the Custodian may
deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the
Custodian in accordance with the customs prevailing from time to time among
brokers or dealers in such Securities. When the Custodian is instructed to
deliver Securities against payment, delivery of such Securities and receipt
of payment therefor may not be completed simultaneously. The Fund assumes
all responsibility and liability for all credit risks involved in
connection with the Custodian's delivery of Securities pursuant to
instructions of the Fund, which responsibility and liability shall continue
until final payment in full has been received by the Custodian.
16. The Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XIX.
TERMINATION
1. Either of the parties hereto may terminate this Agreement by 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 giving of
such notice. In the event such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board of Directors of the
Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not less
than $2,000,000 aggregate capital, surplus and undivided profits. In the
event such notice is given by the Custodian, the Fund shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of
the Board of Directors of the Fund, certified by the Secretary or any
Assistant Secretary, designating a successor custodian or custodians. In
the absence of such designation by the Fund, the Custodian may designate a
successor custodian which shall be a bank or trust company having not less
than $2,000,000 aggregate capital, surplus and undivided profits. Upon the
date set forth in such notice this Agreement shall terminate, and the
Custodian shall upon receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the successor custodian all
Securities and money then owned by the Fund and held by it as Custodian,
after deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the Custodian in
accordance with the preceding paragraph, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in
the Book-Entry System which cannot be delivered to the Fund) and money then
owned by the Fund be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities held in the Book
Entry System which cannot be delivered to the Fund to hold such Securities
hereunder in accordance with this Agreement.
ARTICLE XX.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the present
Authorized Persons of the Fund under its seal, setting forth the names and
the signatures of the present Authorized Persons of the Fund. The Fund
agrees to furnish to the Custodian a new Certificate in similar form in the
event that any such present Authorized Person ceases to be an Authorized
Person of the Fund, or in the event that other or additional Authorized
Persons are elected or appointed. Until such new Certificate shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement or Oral Instructions upon the signatures of
the Authorized Persons as set forth in the last delivered Certificate.
2. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at
00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
the Custodian may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for
the Fund first above written, or at such other place as the Fund may from
time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Directors of the
Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent
of the Fund, authorized or approved by a resolution of the Fund's Board of
Directors.
6. This Agreement shall be construed in accordance with the laws of the State
of New York without giving effect to conflict of laws principles thereof.
Each party hereby consents to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers, thereunto duly authorized and their respective
seals to be hereunto affixed, as of the day and year first above written.
PRINCIPAL LARGECAP STOCK INDEX FUND, INC.
[SEAL]
By:/s/A. x. Xxxxxx
Xxxxxx X. Xxxxxx
Vice President and Secretary
Attest: /s/Xxxxxxx X. Xxxxxx
Notary
THE BANK OF NEW YORK
[SEAL]
By: /s/Xxxxxxx X. Grunston
Name: Xxxxxxx X. Grunston
Title: Vice President
Attest:
APPENDIX A
Xxxxxxx X. Beer, Financial Officer and I, Xxxxxx X. Xxxxxx, Vice President and
Secretary of PRINCIPAL LARGECAP STOCK INDEX FUND, INC., a Maryland corporation
(the "Fund"), do hereby certify that:
The following persons have been duly authorized in conformity with the
Fund's Declaration of Trust and By-Laws to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund, and the
signatures set forth opposite their respective names are their true and
correct signatures:
Name Position Signature
Xxxxx X. Xxxxxx President /s/Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx Vice President and Secretary /s/A. S. Xxxxxx
Xxxxxxx J. Beer Financial Officer /s/Xxxx Xxxx
Xxxxx X. Xxxxxxx Treasurer /s/X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx Counsel /s/Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxx Assistant Counsel /s/Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx Assistant Treasurer /s/X. X. Xxxxx
Xxxxxx X. Xxxxxx Assistant Secretary /s/Xxxxxx X. Xxxxxx
APPENDIX B
SERIES
APPENDIX C
I, Xxxxxx X. Xxxxx, a Vice President with THE BANK OF NEW YORK do hereby
designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
EXHIBIT A
CERTIFICATION
The undersigned, Xxxxxx X. Xxxxxx, hereby certifies that he or she is the
duly elected and acting Vice President and Secretary of Principal LargeCap
Stock Index Fund, Inc., a Maryland corporation (the "Fund"), and further
certifies that the following resolution was adopted by the Board of
Directors of the Fund at a meeting duly held on December 13, 1999, at which
a quorum was at all times present and that such resolution has not been
modified or rescinded and is in full force and effect as of the date
hereof.
"BE IT RESOLVED, That the Corporation appoints Bank of New York as
Custodian of the assets of the Corporation with an effective date to be
determined by the officers of the Corporation; and
BE IT FURTHER RESOLVED, That the Corporation approves the form of Custody
Agreement presented to this meeting and authorizes the president or vice
president to execute in behalf of the Corporation an agreement in
substantially such form with the said Bank of New York; and
BE IT FURTHER RESOLVED, That one of the Corporation officers, together with
the Treasurer, be and they hereby are authorized to open and maintain
accounts with Bank of New York as such officers may deem satisfactory for
the handling of Corporation business; and
BE IT FURTHER RESOLVED, That the officers of the Corporation are authorized
to give instructions to Bank of New York as are necessary for the carrying
out of the custodial relationship and that any two of these officers may
designate in writing additional staff members as individuals authorized to
provide information and give such instructions to Bank of New York as may
be necessary for the carrying out of the daily operational aspects of the
custodial relationship; and
BE IT FURTHER RESOLVED, That the Board of Directors approves of the use by
the custodian for the assets of the Corporation or by any agent of the
custodian, of Depository Trust Company, Participants Trust Company and the
Federal Book-Entry System for the deposit of securities of the Corporation;
and
BE IT FURTHER RESOLVED, That the Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Corporation (the
"Custody Agreement") is authorized and instructed on a continuous and
ongoing basis to utilize the Federal Book-Entry System, as defined in the
Custody Agreement, all securities eligible for deposit and to utilize the
Book-Entry System to the extent possible in connection with its performance
thereunder, including, without limitation, in connection with settlements
of purchases and sales of securities, loans of securities, and deliveries
and returns of securities collateral; and
BE IT FURTHER RESOLVED, That the Bank of New York as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Corporation is
authorized and instructed on a continuous and ongoing basis until such time
as it receives a Certificate, as defined in the Custody Agreement, to the
contrary, to deposit with Depository Trust Company as Depository, as
defined in the Custody Agreement, all securities eligible for deposit
therein, and to utilize the Depository to the extent possible in connection
with its performance thereunder, including, without limitation, in
connection with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral; and
BE IT FURTHER RESOLVED, That the Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Corporation is
authorized and instructed on a continuous and ongoing basis until such time
as it receives a Certificate, as defined in the Custody Agreement, to the
contrary, to deposit in the Participants Trust Company as Depository, as
defined in the Custody Agreement, all securities eligible for deposit
therein, and to utilize the Participants Trust Company to the extent
possible in connection with its performance thereunder, including, without
limitation, in connection with settlements of purchases and sales of
securities, loans of securities, and deliveries and returns of securities
collateral; and
BE IT FURTHER RESOLVED, That the Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Corporation is
authorized and instructed on a continuous and ongoing basis until such time
as it receives a Certificate, as defined in the Custody Agreement, to the
contrary, to accept, utilize and act with respect to Clearing Member
confirmations for Options and transaction in Options, as such terms are
defined in the Custody Agreement, as provided in the Custody Agreement; and
BE IT FURTHER RESOLVED, That authority be granted to the officers of the
Corporation for the signing of the Corporation's checks and orders for the
payment of money. Any check for Two Hundred Thousand Dollars ($200,000) or
less shall require the signature of only one of the officers. Any check
over Two Hundred Thousand Dollars ($200,000) shall require two signatures;
and
BE IT FURTHER RESOLVED, That in connection with Corporation bank and
custody accounts, any two Corporation officers be and they hereby are
authorized to provide for the withdrawal and transfer of funds by verbal
and written disbursement instruction, coded automatic telephone
transmission, electronic funds transfer, secret authenticating codes for
wire transfer, and such other means as necessary in the transfer of funds
from any of the Corporation's accounts, according to a written plan
establishing controls filed with the Secretary of the Corporation, subject,
however, to any specific limitations in resolutions with respect to persons
authorized to withdraw or transfer funds and the amounts thereof; and
BE IF FURTHER RESOLVED, That the Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Corporation, is
authorized and instructed on a continuous and ongoing basis to act in
accordance with, and to rely on Instructions (as defined in the Custody
Agreement); and
BE IT FURTHER RESOLVED, That the Corporation shall establish access codes
and grant use of such access codes only to Authorized Person of the
Corporation as defined in the Custody Agreement, shall establish internal
safekeeping procedures to safeguard and protect the confidentiality and
availability of user and access codes, passwords and authentication keys,
and shall use Instructions only in a manner that does not contravene the
Investment Company Act of 1940, as amended or the rules and regulations
thereunder, and
BE IT FINALLY RESOLVED, That the Secretary and any Assistant Secretary be
and hereby are authorized to certify to said bank a copy of this resolution
and names and signatures of the officers of the Corporation thereby
authorized to act in the premises, and said bank is hereby authorized to
rely upon such certificate until formally advised in writing by a like
certificate of any changes therein."
IN WITNESS WHEREOF, I have hereunto set my hand as of the day of February
18, 2000.
_/s/A. S. Filean ____________
Xxxxxx X. Xxxxxx
Vice President and Secretary
Attest: /s/Xxxxxxx X. Xxxxxx
Notary
