MASTER CUSTODIAN AGREEMENT
between
THE XXXXXX BLUE CHIP MASTER PORTFOLIO TRUST
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
1. Definitions.......................................................1
2. Employment of Custodian and Property to be Held by It.............3
3. Duties of the Custodian with Respect to Property of the Trust.....4
A. Safekeeping and Holding of Property......................4
B. Delivery of Securities...................................4
C. Registration of Securities...............................7
D. Bank Accounts............................................8
E. Payments for Interests, or Increases in Interests,
in the Trust.........................................8
F. Investment and Availability of Federal Funds.............9
G. Collections..............................................9
H. Payment of Trust Monies.................................10
I. Liability for Payment in Advance of Receipt of Securities
Purchased...............................................12
J. Payments for Repurchases or Redemptions of Interests of
the Trust...............................................12
K. Appointment of Agents by the Custodian..................12
L. Deposit of Trust Portfolio Securities in Securities
Systems..............................................13
M. Deposit of Trust Commercial Paper in an Approved Book-Entry
System for Commercial Paper.............................15
N. Segregated Account......................................17
O. Ownership Certificates for Tax Purposes.................18
P. Proxies.................................................18
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Q. Communications Relating to Trust Portfolio Securities...18
R. Exercise of Rights; Tender Offers.......................18
S. Depository Receipts.....................................19
T. Interest Bearing Call or Time Deposits..................20
U. Options, Futures Contracts and Foreign Currency
Transactions.........................................20
V. Actions Permitted Without Express Authority.............22
4. Duties of Bank with Respect to Books of Account and Calculations of
Net Asset Value..................................................22
5. Records and Miscellaneous Duties.................................23
6. Opinion of Trust's Independent Public Accountants................24
7. Compensation and Expenses of Bank................................24
8. Responsibility of Bank...........................................24
9. Persons Having Access to Assets of the Trust.....................25
10. Effective Period, Termination and Amendment; Successor Custodian.25
11. Interpretive and Additional Provisions...........................26
12. Notices..........................................................27
13. Massachusetts Law to Apply.......................................27
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MASTER CUSTODIAN AGREEMENT
This Agreement is made as of April 30, 1997 between The Xxxxxx Blue
Chip Master Portfolio Trust, an unincorporated trust organized under the laws of
the State of New York (the "Trust"), on behalf of the series of the Trust set
forth in Annex I (the "Portfolios") and Investors Bank & Trust Company
(hereinafter called "Bank," "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, the Trust is registered under the Investment Company Act of
1940 and has appointed the Bank to act as Custodian of its property and to
perform certain duties as its Agent, as more fully hereinafter set forth; and
Whereas, the Bank is willing and able to act as the Trust's Custodian
and Agent, subject to and in accordance with the provisions hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, the Trust and the Bank agree as
follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Trust" shall mean The Xxxxxx Blue Chip Master Portfolio Trust.
(b) "Board" shall mean the board of trustees of the Trust.
(c) "The Depository Trust Company," a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Trust by the Board.
(d) "Participants Trust Company," a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Trust by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository but
only if the Custodian has received a certified copy of a resolution of the Board
approving such clearing agency as a securities depository for the Trust.
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(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a resolution of the Board approving such
depository or clearing agency as a foreign securities depository for the Trust.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but only
if the Custodian has received a certified copy of a resolution of the Board
approving the participation by the Trust in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Different persons may be
authorized to give instructions for different purposes. A certified copy of a
resolution of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to the
contrary. Such instructions may be general or specific in terms and, where
appropriate, may be standing instructions. Unless the resolution delegating
authority to any person or persons to give a particular class of instructions
specifically requires that the approval of any person, persons or committee
shall first have been obtained before the Custodian may act on instructions of
that class, the Custodian shall be under no obligation to question the right of
the person or persons giving such instructions in so doing. Oral instructions
will be considered proper instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Trust shall cause all oral instructions to be
confirmed in writing. The Trust authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Trust as to the authorization by
the President and the Treasurer of the Trust accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Trust, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Trust and the Custodian are satisfied that
such procedures afford adequate safeguards for the Trust's assets. In performing
its duties
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generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Trust, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Trust as the same may from time to time be in effect (and
resolutions or proceedings of the holders of interests in the Trust or the
Board), but, nevertheless, except as otherwise expressly provided herein, the
Custodian may assume unless and until notified in writing to the contrary that
so-called proper instructions received by it are not in conflict with or in any
way contrary to any provisions of such governing documents and registration
statement, or resolutions or proceedings of the holders of interests in the
Trust or the Board.
(j) "Separate Accounts." If the Trust has more than one series or
portfolio, the Bank will segregate the assets of each series or portfolio to
which this Agreement relates into a separate account for each such series or
portfolio containing the assets of such series or portfolio (and all investment
earnings thereon). Unless the context otherwise requires, any reference in this
Agreement to any actions to be taken by the Trust shall be deemed to refer to
the Trust acting on behalf of one or more of its series, any reference in this
Agreement to any assets of the Trust, including, without limitation, any
portfolio securities and cash and earnings thereon, shall be deemed to refer
only to assets of the applicable series, any duty or obligation of the Bank
hereunder to the Trust shall be deemed to refer to duties and obligations with
respect to the individual series and any obligation or liability of the Trust
hereunder shall be binding only with respect to the individual series, and shall
be discharged only out of the assets of such series.
It is agreed that for the purposes of this Agreement, that each of the
series of the Trust listed on Annex I, individually and not jointly, shall be
deemed to be a party hereto. It is also understood that each of such entities
shall be deemed to be entering into a separate agreement with the Bank, that it
is as if each of such entities has signed a separate Agreement with the bank and
that a single document is being signed simply to facilitate the execution and
administration of the Agreement.
(k) The term "Vote" when used with respect to the Board or the Holders
of Interests in the Trust shall include a vote, resolution, consent, proceeding
and other action taken by the Board or Holders in accordance with the
Declaration of Trust or By-Laws of the Trust.
2. Employment of Custodian and Property to be Held by It
The Trust hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Trust agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received
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by it with respect to all securities and participation interests owned by the
Trust from time to time, and the cash consideration received by it from time to
time in exchange for an interest in the Trust or for an increase in such an
interest. The Custodian shall not be responsible for any property of the Trust
held by the Trust and not delivered by the Trust to the Custodian. The Trust
will also deliver to the Bank from time to time copies of its currently
effective declaration of trust, by-laws, registration statement and placement
agent agreement with its placement agent, if any, together with such
resolutions, and other proceedings of the Trust as may be necessary for or
convenient to the Bank in the performance of its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Trust held by such subcustodian. Any
foreign subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the foreign custody arrangements shall be approved by the Board
and shall be in accordance with and subject to the provisions of said Rule. For
the purposes of this Agreement, any property of the Trust held by any such
subcustodian (domestic or foreign) shall be deemed to be held by the Custodian
under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Trust
A. Safekeeping and Holding of Property The Custodian shall keep safely all
property of the Trust and on behalf of the Trust shall from time to time receive
delivery of Trust property for safekeeping. The Custodian shall hold, earmark
and segregate on its books and records for the account of the Trust all property
of the Trust, including all securities, participation interests and other assets
of the Trust (1) physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in Paragraph K
hereof, (3) held by or maintained in The Depository Trust Company or in
Participants Trust Company or in an Approved Clearing Agency or in the Federal
Book-Entry System or in an Approved Foreign Securities Depository, each of which
from time to time is referred to herein as a "Securities System," and (4) held
by the Custodian or by any subcustodian referred to in Section 2 hereof and
maintained in any Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities The Custodian shall release and deliver
securities or participation interests owned by the Trust held (or deemed to be
held) by the Custodian or maintained in a Securities System account or
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in an Approved Book-Entry System for Commercial Paper account only upon
receipt of proper instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or participation interests for the account
of the Trust, BUT ONLY against receipt of payment therefor; if delivery is made
in Boston or New York City, payment therefor shall be made in accordance with
generally accepted clearing house procedures or by use of Federal Reserve Wire
System procedures; if delivery is made elsewhere payment therefor shall be in
accordance with the then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by the parties hereto; if
the sale is effected through a Securities System, delivery and payment therefor
shall be made in accordance with the provisions of Paragraph L hereof; if the
sale of commercial paper is to be effected through an Approved Book-Entry System
for Commercial Paper, delivery and payment therefor shall be made in accordance
with the provisions of Paragraph M hereof; if the securities are to be sold
outside the United States, delivery may be made in accordance with procedures
agreed to in writing from time to time by the parties hereto; for the purposes
of this subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by the Trust and
(ii) upon the failure by the Trust to make a successful bid with respect to a
portfolio security, the continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any repurchase agreement
or reverse repurchase agreement relating to such securities and entered into by
the Trust;
3) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Trust;
4) To the issuer thereof or its agent when such securities or participation
interests are called, redeemed, retired or otherwise become payable; PROVIDED
that, in any such case, the cash or other consideration is to be delivered to
the Custodian or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name of the
Trust or into the name of any nominee of the Custodian or
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into the name or nominee name of any agent appointed pursuant to Paragraph
K hereof or into the name or nominee name of any subcustodian employed pursuant
to Section 2 hereof; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face amount or
number of units; PROVIDED that, in any such case, the new securities or
participation interests are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with the
"street delivery" custom; PROVIDED that the Custodian shall adopt such
procedures as the Trust from time to time shall approve to ensure their prompt
return to the Custodian by the broker in the event the broker elects not to
accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion of such securities, or pursuant to any deposit agreement; PROVIDED
that, in any such case, the new securities and cash, if any, are to be delivered
to the Custodian or any subcustodian employed pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the surrender
thereof in connection with the exercise of such warrants, rights or similar
securities, or the surrender of interim receipts or temporary securities for
definitive securities; PROVIDED that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any subcustodian employed
pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by the
Trust (such loans to be made pursuant to the terms of the Trust's current
registration statement), BUT ONLY against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Trust, which may be in
the form of cash or obligations issued by the United States government, its
agencies or instrumentalities; except that in connection with any securities
loans for which collateral is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of Treasury, the Custodian
will not be held liable or responsible for the delivery of securities loaned by
the Trust prior to the receipt of such collateral;
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10) For delivery as security in connection with any borrowings by the Trust
requiring a pledge or hypothecation of assets by the Trust (if then permitted
under circumstances described in the current registration statement of the
Trust), provided, that the securities shall be released only upon payment to the
Custodian of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, further securities
may be released for that purpose; upon receipt of proper instructions, the
Custodian may pay any such loan upon redelivery to it of the securities pledged
or hypothecated therefor and upon surrender of the note or notes evidencing the
loan;
11) When required for delivery in connection with any redemption or
repurchase of an interest in the Trust in accordance with the provisions of
Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement between
the Custodian (or a subcustodian employed pursuant to Section 2 hereof) and a
broker-dealer registered under the Securities Exchange Act of 1934 and, if
necessary, the Trust, relating to compliance with the rules of The Options
Clearing Corporation or of any registered national securities exchange, or of
any similar organization or organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the Trust;
13) For delivery in accordance with the provisions of any agreement among
the Trust, the Custodian (or a subcustodian employed pursuant to Section 2
hereof), and a futures commissions merchant, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or of any contract market
or commodities exchange or similar organization, regarding futures margin
account deposits or payments in connection with futures transactions by the
Trust;
14) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to proper instructions, a certified copy of a resolution of the Board
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Trust shall be registered in the
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name of the Trust or in the name of any nominee of the Trust or of any
nominee of the Custodian, or in the name or nominee name of any agent appointed
pursuant to Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the name or nominee
name of The Depository Trust Company or Participants Trust Company or Approved
Clearing Agency or Federal Book-Entry System or Approved Book-Entry System for
Commercial Paper; provided, that securities are held in an account of the
Custodian or of such agent or of such subcustodian containing only assets of the
Trust or only assets held by the Custodian or such agent or such subcustodian as
a custodian or subcustodian or in a fiduciary capacity for customers.
All certificates for securities accepted by the Custodian or any such agent
or subcustodian on behalf of the Trust shall be in "street" or other good
delivery form or shall be returned to the selling broker or dealer who shall be
advised of the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank
account or accounts in the name of the Trust, subject only to draft or order by
the Custodian acting in pursuant to the terms of this Agreement, and shall hold
in such account or accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Trust other than cash maintained by the
Trust in a bank account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940. Funds held by the Custodian for the Trust
may be deposited by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as the Custodian may in
its discretion deem necessary or desirable; PROVIDED, HOWEVER, that every such
bank or trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall be approved in
writing by two officers of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to withdrawal only
by the Custodian in that capacity.
E. Payments for Interests, or Increases in Interests, in the Trust The
Custodian shall make appropriate arrangements with the Transfer Agent of the
Trust to enable the Custodian to make certain it promptly receives the cash or
other consideration due to the Trust for payment of interests in the Trust, or
increases in such interests, in accordance with the governing documents and
registration statement of the Trust. The
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Custodian will provide prompt notification to the Trust of any receipt by
it of such payments.
F. Investment and Availability of Federal Funds Upon agreement between the
Trust and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed appropriate by
the parties, invest in such securities and instruments as may be set forth in
such instructions on the same day as received all federal funds received after a
time agreed upon between the Custodian and the Trust.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which the Trust
shall be entitled either by law or pursuant to custom in the securities
business, and shall promptly collect all income and other payments with respect
to bearer securities if, on the date of payment by the issuer, such securities
are held by the Custodian or agent thereof and shall credit such income, as
collected, to the Trust's custodian account. The Custodian shall do all things
necessary and proper in connection with such prompt collections and, without
limiting the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the
Trust, checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in
a Securities System or in an Approved
Book-Entry System for Commercial Paper at
the time funds become available to the
Custodian; in the case of securities
maintained in The Depository Trust Company
funds shall be deemed available to the Trust
not later than the opening of business on
the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Trust as soon as reasonably practicable
whenever income due on any security is not promptly collected. In any case in
which the Custodian does not receive any due and unpaid income after it has made
demand for the same, it shall immediately so
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notify the Trust in writing, enclosing copies of any demand letter, any
written response thereto, and memoranda of all oral responses thereto and to
telephonic demands, and await instructions from the Trust; the Custodian shall
in no case have any liability for any nonpayment of such income provided the
Custodian meets the standard of care set forth in Section 8 hereof. The
Custodian shall not be obligated to take legal action for collection unless and
until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights
and other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. Payment of Trust Monies Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures contracts purchased
for the account of the Trust but only (a) against the receipt of
(i) such securities registered as provided in Paragraph C hereof or in
proper form for transfer or
(ii) detailed instructions signed by an officer of the Trust regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase by the Trust of the options,
futures contracts, forward contracts or options on futures contracts by the
Custodian (or by a subcustodian employed pursuant to Section 2 hereof or by a
clearing corporation of a national securities exchange of which the Custodian is
a member or by any bank, banking institution or trust company doing business in
the United States or abroad which is qualified under the Investment Company Act
of 1940 to act as a custodian and which has been designated by the Custodian as
its agent for this purpose or by the agent specifically designated in such
instructions as representing the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through a Securities System,
upon receipt of the
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securities by the Securities System in accordance with the conditions set
forth in Paragraph L hereof; (c) in the case of a purchase of commercial paper
effected through an Approved Book-Entry System for Commercial Paper, upon
receipt of the paper by the Custodian or subcustodian in accordance with the
conditions set forth in Paragraph M hereof; (d) in the case of repurchase
agreements entered into between the Trust and another bank or a broker-dealer,
against receipt by the Custodian of the securities underlying the repurchase
agreement either in certificate form or through an entry crediting the
Custodian's segregated, non-proprietary account at the Federal Reserve Bank of
Boston with such securities along with written evidence of the agreement by the
bank or broker-dealer to repurchase such securities from the Trust; or (e) with
respect to securities purchased outside of the United States, in accordance with
written procedures agreed to from time to time in writing by the parties hereto;
2) When required in connection with the conversion, exchange or surrender
of securities owned by the Trust as set forth in Paragraph B hereof;
3) When required for the reduction or redemption of an interest in the
Trust in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the Trust,
including but not limited to the following payments for the account of the
Trust: advisory fees, interest, taxes, management compensation and expenses,
accounting, transfer agent and legal fees, and other operating expenses of the
Trust whether or not such expenses are to be in whole or part capitalized or
treated as deferred expenses;
5) For distributions or payment to Holders of Interest in the Trust; and
6) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a resolution of the Board,
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a
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proper corporate purpose, and naming the person or persons to whom such
payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased In
any and every case where payment for purchase of securities for the account of
the Trust is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions signed by two officers
of the Trust to so pay in advance, the Custodian shall be absolutely liable to
the Trust for such securities to the same extent as if the securities had been
received by the Custodian; EXCEPT that in the case of a repurchase agreement
entered into by the Trust with a bank which is a member of the Federal Reserve
System, the Custodian may transfer trusts to the account of such bank prior to
the receipt of (i) the securities in certificate form subject to such repurchase
agreement or (ii) written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the Federal Reserve
Bank of Boston or (iii) the safekeeping receipt, PROVIDED that such securities
have in fact been so TRANSFERRED by book-entry and the written repurchase
agreement is received by the Custodian in due course; AND EXCEPT that if the
securities are to be purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to time by the parties
hereto.
J. Payments for Repurchases or Redemptions of Interests in the Trust From
such funds as may be available for the purpose, but subject to any applicable
resolutions of the Board and the current procedures of the Trust, the Custodian
shall, upon receipt of written instructions from the Trust or from the Trust's
Transfer Agent, make funds and/or portfolio securities available for payment to
Holders of Interest in the Trust who have caused the amount of their interests
to be reduced, or for their interest to be redeemed.
K. Appointment of Agents by the Custodian The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company (PROVIDED such bank or trust company is itself qualified under the
Investment Company Act of 1940 to act as a custodian or is itself an eligible
foreign custodian within the meaning of Rule 17f-5 under said Act) as the agent
of the Custodian to carry out such of the duties and functions of the Custodian
described in this Section 3 as the Custodian may from time to time direct;
PROVIDED, however, that the appointment of any such agent shall not relieve the
Custodian of any of its responsibilities or liabilities hereunder, and as
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between the Trust and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent. For the purposes of
this Agreement, any property of the Trust held by any such agent shall be deemed
to be held by the Custodian hereunder.
L. Deposit of Trust Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the Trust
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, and at all times
subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2) keep securities of the Trust in a Securities
System provided that such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to securities of the Trust
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Trust, and the Custodian shall be fully and
completely responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Trust's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry form for
the account of the Trust only upon (i) receipt of notice or advice from the
Securities System that such securities have been transferred to the Account, and
(ii) the making of any entry on the records of the Custodian to reflect such
payment and transfer for the account of the Trust. The Custodian shall transfer
securities sold for the
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account of the Trust only upon (i) receipt of notice or advice from the
Securities System that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Trust. Copies of all
notices or advices from the Securities System of transfers of securities for the
account of the Trust shall identify the Trust, be maintained for the Trust by
the Custodian and be promptly provided to the Trust at its request. The
Custodian shall promptly send to the Trust confirmation of each transfer to or
from the account of the Trust in the form of a written advice or notice of each
such transaction, and shall furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the Securities System for the
account of the Trust on the next business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to the Securities
System's accounting system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities System; the Custodian
shall promptly send to the Trust any report or other communication relating to
the Custodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the Custodian shall ensure
that any agent appointed pursuant to Paragraph K hereof or any subcustodian
employed pursuant to Section 2 hereof shall promptly send to the Trust and to
the Custodian any report or other communication relating to such agent's or
subcustodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System. The Custodian's books and records
relating to the Trust's participation in each Securities System will at all
times during regular business hours be open to the inspection of the Trust's
authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence of
receipt of a certificate of an officer of the Trust that the Board has approved
the use of a particular Securities System; the Custodian shall also obtain
appropriate assurance from the officers of the Trust that the Board has annually
reviewed the continued use by the Trust of each Securities System, and the Trust
shall promptly notify the Custodian if the use of a Securities System is to be
discontinued; at the request of the Trust, the Custodian will terminate the use
of any such Securities System as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the
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Trust resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce effectively such rights
as it may have against the Securities System or any other person; at the
election of the Trust, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities System or any
other person which the Custodian may have as a consequence of any such loss or
damage if and to the extent that the Trust has not been made whole for any such
loss or damage.
M. Deposit of Trust Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to each issue
of direct issue commercial paper purchased by the Trust, the Custodian may
deposit and/or maintain direct issue commercial paper owned by the Trust in any
Approved Book-Entry System for Commercial Paper, in each case only in accordance
with applicable Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2) keep commercial paper of the Trust in an
Approved Book-Entry System for Commercial Paper, provided that such paper is
issued in book entry form by the Custodian or subcustodian on behalf of an
issuer with which the Custodian or subcustodian has entered into a book-entry
agreement and provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or such subcustodian in an
Approved Book-Entry System for Commercial Paper which shall not include any
assets of the Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of the
Trust which is maintained in an Approved Book-Entry System for Commercial Paper
shall identify by book-entry each specific issue of commercial paper purchased
by the Trust which is included in the Securities System and shall at all times
during regular business hours be open for inspection by authorized officers,
employees or agents of the Trust. The Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of accurately and
currently stating the Trust's holdings of commercial paper maintained in each
such System.
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(c) The Custodian shall pay for commercial paper purchased in book-entry
form for the account of the Trust only upon contemporaneous (i) receipt of
notice or advice from the issuer that such paper has been issued, sold and
transferred to the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such purchase, payment and transfer for the account of
the Trust. The Custodian shall transfer such commercial paper which is sold or
cancel such commercial paper which is redeemed for the account of the Trust only
upon contemporaneous (i) receipt of notice or advice that payment for such paper
has been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer or redemption and payment for
the account of the Trust. Copies of all notices, advices and confirmations of
transfers of commercial paper for the account of the Trust shall identify the
Trust, be maintained for the Trust by the Custodian and be promptly provided to
the Trust at its request. The Custodian shall promptly send to the Trust
confirmation of each transfer to or from the account of the Trust in the form of
a written advice or notice of each such transaction, and shall furnish to the
Trust copies of daily transaction sheets reflecting each day's transactions in
the System for the account of the Trust on the next business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to each System's
accounting system, system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the Custodian shall
promptly send to the Trust any report or other communication relating to the
Custodian's internal accounting controls and procedures for safeguarding
commercial paper deposited in any Approved Book-Entry System for Commercial
Paper; and the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to Section 2 hereof
shall promptly send to the Trust and to the Custodian any report or other
communication relating to such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence of
receipt of a certificate of an officer of the Trust that the Board has approved
the use of a particular Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the officers of the Trust
that the Board has annually reviewed the continued use by the Trust of each
Approved Book-Entry System for Commercial Paper, and the Trust shall promptly
notify the
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Custodian if the use of an Approved Book-Entry System for Commercial Paper
is to be discontinued; at the request of the Trust, the Custodian will terminate
the use of any such System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System for
Commercial Paper is maintained by the subcustodian) shall issue physical
commercial paper or promissory notes whenever requested to do so by the Trust or
in the event of an electronic system failure which impedes issuance, transfer or
custody of direct issue commercial paper by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting from use of any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the Custodian or any of
its agents or subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System, the issuer of the
commercial paper or any other person; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the System, the issuer of the commercial paper or any other person
which the Custodian may have as a consequence of any such loss or damage if and
to the extent that the Trust has not been made whole for any such loss or
damage.
N. Segregated Account The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts for and on
behalf of the Trust, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Trust, the Custodian and any registered broker-dealer
(or any futures commission merchant), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in connection
with transactions by the Trust, (ii) for purposes of segregating cash or liquid
securities in connection with options purchased, sold or written by the Trust or
futures contracts or options thereon purchased or sold by the Trust, (iii) for
the purposes of compliance by the Trust with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange
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Commission relating to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper purposes, but only, in the case
of clause (iv), upon receipt of, in addition to proper instructions, a
certificate signed by two officers of the Trust, setting forth the purpose such
segregated account and declaring such purpose to be a proper purpose.
O. Ownership Certificates for Tax Purposes The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of the Trust held by it and in connection with transfers of
securities.
P. Proxies The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Trust all forms of proxies and
all notices of meetings and any other notices or announcements or other written
information affecting or relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be required. Neither the
Custodian nor its nominee shall vote upon any of the securities or execute any
proxy to vote thereon or give any consent or take any other action with respect
thereto (except as otherwise herein provided) unless ordered to do so by proper
instructions.
Q. Communications Relating to Trust Portfolio Securities The Custodian
shall deliver promptly to the Trust all written information (including, without
limitation, pendency of call and maturities of securities and participation
interests and expirations of rights in connection therewith and notices of
exercise of call and put options written by the Trust and the maturity of
futures contracts purchased or sold by the Trust) received by the Custodian from
issuers and other persons relating to the securities and participation interests
being held for the Trust. With respect to tender or exchange offers, the
Custodian shall deliver promptly to the Trust all written information received
by the Custodian from issuers and other persons relating to the securities and
participation interests whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer.
R. Exercise of Rights; Tender Offers In the case of tender offers, similar
offers to purchase or exercise rights (including, without limitation, pendency
of calls and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of exercise of call
and put options and the maturity of futures contracts) affecting
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or relating to securities and participation interests held by the Custodian
under this Agreement, the Custodian shall have responsibility for promptly
notifying the Trust of all such offers in accordance with the standard of
reasonable care set forth in Section 8 hereof. For all such offers for which the
Custodian is responsible as provided in this Paragraph R, the Trust shall have
responsibility for providing the Custodian with all necessary instructions in
timely fashion. Upon receipt of proper instructions, the Custodian shall timely
deliver to the issuer or trustee thereof, or to the agent of either, warrants,
puts, calls, rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the new securities and cash, if any, acquired by such action
are to be delivered to the Custodian or any subcustodian employed pursuant to
Section 2 hereof. Upon receipt of proper instructions, the Custodian shall
timely deposit securities upon invitations for tenders of securities upon proper
receipt therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered securities are to
be returned to the Custodian or subcustodian employed pursuant to Section 2
hereof. Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary by proper instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall thereafter promptly notify the Trust in writing of such
action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to the
depository used by an issuer of American Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as "ADRs") for such
securities, against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Custodian that the
depository has acknowledged receipt of instructions to issue with respect to
such securities in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section 2 hereof, for
delivery to the Custodian or such subcustodian at such place as the Custodian or
such subcustodian may from time to time designate. The Custodian shall, upon
receipt of proper instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to
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the Custodian or to a subcustodian employed pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall, upon receipt
of proper instructions, place interest bearing fixed term and call deposits with
the banking department of such banking institution (other than the Custodian)
and in such amounts as the Trust may designate. Deposits may be denominated in
U.S. Dollars or other currencies. The Custodian shall include in its records
with respect to the assets of the Trust appropriate notation as to the amount
and currency of each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of advice or receipt evidencing
the deposit, if any, as may be forwarded to the Custodian by the banking
institution. Such deposits shall be deemed portfolio securities of the Trust for
the purposes of this Agreement, and the Custodian shall be responsible for the
collection of income from such accounts and the transmission of cash to and from
such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodian shall, upon receipt of proper instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Trust, relating to compliance
with the rules of the Options Clearing Corporation or of any registered national
securities exchange or similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the purchase or writing of
an option on a security or securities index or other financial instrument or
index by the Trust; deposit and maintain in a segregated account for the Trust,
either physically or by book-entry in a Securities System, securities subject to
a covered call option written by the Trust; and release and/or transfer such
securities or other assets only in accordance with a notice or other
communication evidencing the expiration, termination or exercise of such covered
option furnished by the Options Clearing Corporation, the securities or options
exchange on which such covered option is traded or such other organization as
may be responsible for handling such options transactions. The Custodian and the
broker-dealer shall be responsible for the sufficiency of assets held in the
Trust's segregated account in compliance with applicable margin maintenance
requirements.
2. Futures Contracts The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if any,
evidencing the purchase or sale of a futures contract or an option
-20-
on a futures contract by the Trust; deposit and maintain in a segregated
account, for the benefit of any futures commission merchant, assets designated
by the Trust as initial, maintenance or variation "margin" deposits (including
xxxx-to-market payments) intended to secure the Trust's performance of its
obligations under any futures contracts purchased or sold or any options on
futures contracts written by the Trust, in accordance with the provisions of any
agreement or agreements among the Trust, the Custodian and such futures
commission merchant, designed to comply with the rules of the Commodity Futures
Trading Commission and/or of any contract market or commodities exchange or
similar organization regarding such margin deposits or payments; and release
and/or transfer assets in such margin accounts only in accordance with any such
agreements or rules. The Custodian and the futures commission merchant shall be
responsible for the sufficiency of assets held in the segregated account in
compliance with the applicable margin maintenance and xxxx-to-market payment
requirements.
3. Foreign Exchange Transactions The Custodian shall, pursuant to proper
instructions, enter into or cause a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign currencies for spot and future
delivery on behalf and for the account of the Trust. Such transactions may be
undertaken by the Custodian or subcustodian with such banking or financial
institutions or other currency brokers, as set forth in proper instructions.
Foreign exchange contracts and options shall be deemed to be portfolio
securities of the Trust; and accordingly, the responsibility of the Custodian
therefor shall be the same as and no greater than the Custodian's responsibility
in respect of other portfolio securities of the Trust. The Custodian shall be
responsible for the transmittal to and receipt of cash from the currency broker
or banking or financial institution with which the contract or option is made,
the maintenance of proper records with respect to the transaction and the
maintenance of any segregated account required in connection with the
transaction. The Custodian shall have no duty with respect to the selection of
the currency brokers or banking or financial institutions with which the Trust
deals or for their failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available to the Custodian for the
purpose, the Custodian may (if determined necessary by the Custodian to
consummate a particular transaction on behalf and for the account of the Trust)
make free outgoing payments of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign exchange contract or
confirmation that the countervalue currency
-21-
completing the foreign exchange contract has been delivered or received.
The Custodian shall not be responsible for any costs and interest charges which
may be incurred by the Trust or the Custodian as a result of the failure or
delay of third parties to deliver foreign exchange; provided that the Custodian
shall nevertheless be held to the standard of care set forth in, and shall be
liable to the Trust in accordance with, the provisions of Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Trust:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Agreement,
provided, that all such payments shall be accounted for by the Custodian to the
Treasurer of the Trust;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Trust, checks, drafts and
other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Trust except as otherwise directed by the Trust.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the
Trust's portfolio securities) and render as at the close of business on each day
a detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Trust during said day and such
other statements, including a daily trial balance and inventory of the Trust's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Trust; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of the Trust and the net asset value of each
interest in the Trust, such computations and determinations to be made in
accordance with the governing documents of the Trust and the votes and
instructions of the
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Board and of the investment adviser at the time in force and applicable, and
promptly notify the Trust and its investment adviser and such other persons as
the Trust may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Trust by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Trust relative (a) to
liabilities of the Trust not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures or policies established by the Board regarding the valuation of
portfolio securities or other assets, and (d) to the value to be assigned to any
bond, note, debenture, Treasury xxxx, repurchase agreement, subscription right,
security, participation interests or other asset or property for which market
quotations are not readily available. The Custodian shall also compute and
determine at such time or times as the Trust may designate the portion of each
item which has significance for a holder of an interest in the Trust in
computing and determining its federal income tax liability including, but not
limited to, each item of income, expense and realized and unrealized gain or
loss of the Trust which is attributable for Federal income tax purposes to each
such holder.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Trust, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Trust, and in the event of
termination of this Agreement shall be delivered to the Trust or to such other
person or persons as shall be designated by the Trust. Disposition of any
account or record after any required period of preservation shall be only in
accordance with specific instructions received from the Trust. The Bank shall
assist generally in the preparation of reports to holders of interest in the
Trust, to the Securities and Exchange Commission, including Form N-SAR, and to
others, audits of accounts, and other ministerial matters of like nature; and,
upon request, shall furnish the Trust's auditors with an attested inventory of
securities held with appropriate information as to securities in transit or in
the process of purchase or sale and with such other information as said auditors
may from time to time request. The Custodian shall also maintain records of all
receipts, deliveries and locations of such securities, together with a current
inventory thereof, and shall conduct periodic verifications (including sampling
counts at the Custodian) of certificates representing bonds and other securities
for which it is responsible under this Agreement in such
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manner as the Custodian shall determine from time to time to be advisable in
order to verify the accuracy of such inventory. The Bank shall not disclose or
use any books or records it has prepared or maintained by reason of this
Agreement in any manner except as expressly authorized herein or directed by the
Trust, and the Bank shall keep confidential any information obtained by reason
of this Agreement.
6. Opinion of Trust's Independent Public Accountants
The Custodian shall take all reasonable action, as the Trust may from
time to time request, to enable the Trust to obtain from year to year favorable
opinions from the Trust's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Trust's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Trust and
the Bank. The Bank shall be entitled to receive from the Trust on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Trust) on all matters,
and shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
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The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Trust to maintain
custody of any securities or cash of the Trust in a foreign country including,
but not limited to, losses resulting from nationalization, expropriation,
currency restrictions, acts of war, civil war or terrorism, insurrection,
revolution, military or usurped powers, nuclear fission, fusion or radiation,
earthquake, storm or other disturbance of nature or acts of God.
If the Trust requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Trust being liable for the payment of money or incurring
liability of some other form, the Trust, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. Persons Having Access to Assets of the Trust
(i) No trustee, officer, employee, or agent of the Trust shall have
physical access to the assets of the Trust held by the Custodian or be
authorized or permitted to withdraw any investments of the Trust, nor shall the
Custodian deliver any assets of the Trust to any such person. No officer or
director, employee or agent of the Custodian who holds any similar position with
the Trust or the investment adviser or the administrator of the Trust shall have
access to the assets of the Trust.
(ii) Access to assets of the Trust held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Trust's independent
public accountants in connection with their auditing duties performed on behalf
of the Trust.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Trust or of the investment adviser of the Trust from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Trust prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated by either party after August
31, 2000 by an instrument in writing delivered or mailed, postage prepaid to the
other party, such
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termination to take effect not sooner than sixty (60) days after the date of
such delivery or mailing; provided, that the Trust may at any time by action of
its Board, (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian in the event the Custodian
assigns this Agreement to another party without consent of the non-interested
Trustees of the Trust, or (ii) immediately terminate this Agreement in the event
of the appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of the Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Trust shall pay to the Custodian such
compensation as may be due as of the date of such termination (and shall
likewise reimburse the Custodian for its costs, expenses and disbursements).
This Agreement may be amended at any time by the written agreement of
the parties hereto. If a majority of the non-interested trustees of any of the
Trusts determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of Trust holders of any Trust or Trusts or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Trust or Trusts shall give written notice to the Custodian
of such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Trust. If the conditions of the preceding sentence are not met then the Trust or
Trusts may terminate this Agreement on sixty (60) days written notice.
The Board of the Trust shall, forthwith, upon giving or receiving
notice of termination of this Agreement, appoint as successor custodian, a bank
or trust company having the qualifications required by the Investment Company
Act of 1940 and the Rules thereunder. The Bank, as Custodian, Agent or
otherwise, shall, upon termination of the Agreement, deliver to such successor
custodian, all securities then held hereunder and all funds or other properties
of the Trust deposited with or held by the Bank hereunder and all books of
account and records kept by the Bank pursuant to this Agreement, and all
documents held by the Bank relative thereto. In the event that no written order
designating a successor custodian shall have been delivered to the Bank on or
before the date when such termination shall become effective, then the Bank
shall not deliver the securities, funds and other properties of the Trust to the
Trust, but shall have the right to deliver to a bank or trust company doing
business in Boston, Massachusetts of its own selection meeting the above
required qualifications, all funds, securities and properties of the Trust held
by or deposited with the Bank, and all books of account and records kept by the
Bank pursuant to this Agreement, and all documents held by the Bank relative
thereto. Thereafter such bank or trust company shall be the successor of the
Custodian under this Agreement.
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Except as expressly provided herein, the Agreement shall remain
unchanged and in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and
the Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Trust. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the
Trust addressed to 00 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 or to such other address
as the Trust may have designated to the Bank, in writing with a copy to Xxxxxx
Investors' Service, Inc., 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx
00000, or to Investors Bank & Trust Company, 00 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 with a copy to Xxxxxx Investors' Service, Inc., 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000, shall be deemed to have been
properly delivered or given hereunder to the respective addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
The Custodian expressly acknowledges the provision in the Declaration
of Trust of the Trust (Section 5.2) limiting the personal liability of the
Trustees and officers of the Trust, and the Custodian hereby agrees that it
shall have recourse to the Trust for payment of claims or obligations as between
the Trust and the Custodian arising out of this Agreement, and the Custodian
shall not seek satisfaction from any Trustee or officer of the Trust.
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In witness whereof, the parties have executed this Agreement as of the
date first set forth above.
THE XXXXXX BLUE CHIP INVESTORS BANK &
MASTER PORTFOLIO TRUST TRUST COMPANY
By: /s/Xxxxx X. Xxxxxxx By:/s/Xxxxxxx X. Xxxxxx
------------------------ ------------------------
Name: Xxxxx X. Xxxxxxx Name:Xxxxxxx X. Xxxxxx
Title:President Title:Executive Vice President
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ANNEX I
Selected Blue Chip Equities Portfolio
Junior Blue Chip Equities Portfolio
International Blue Chip Equities Portfolio
U.S. Treasury Portfolio
U.S. Treasury Near Term Portfolio
Current Income Portfolio
(each of the above, a "Portfolio")
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