CUSTODIAN CONTRACT
Between
EQUITABLE REAL ESTATE HYPERION
HIGH YIELD COMMERCIAL MORTGAGE FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
C/M 11212.0012 304365.1
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It.......... 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian..................................... 1
2.1 Holding Securities.................................... 1
2.2 Delivery of Securities................................ 2
2.3 Registration of Securities............................ 4
2.4 Bank Accounts......................................... 4
2.5 Availability of Federal Funds......................... 5
2.6 Collection of Income.................................. 5
2.7 Payment of Fund Monies................................ 5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased.................................. 7
2.9 Appointment of Agents................................. 7
2.10 Deposit of Fund Assets in Securities Systems.......... 7
2.11 Fund Assets Held in the Custodian's Direct Paper
System................................................ 8
2.12 Segregated Account.................................... 9
2.13 Ownership Certificates for Tax Purposes............... 10
2.14 Proxies............................................... 10
2.15 Communications Relating to Portfolio Securities....... 10
2.16 Reports to Fund by Independent Public Accountants..... 11
3. Proper Instructions............................................ 11
4. Actions Permitted Without Express Authority.................... 11
5. Evidence of Authority.......................................... 12
6. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and Net
Income......................................................... 12
7. Records........................................................ 12
8. Opinion of Fund's Independent Accountants...................... 13
9. Compensation of Custodian...................................... 13
10. Responsibility of Custodian.................................... 13
11. Effective Period, Termination and Amendment.................... 14
12. Successor Custodian............................................ 15
C/M 11212.0012 304365.1
Page
13. Interpretive and Additional Provisions......................... 15
14. Massachusetts Law to Apply..................................... 16
15. Prior Contracts................................................ 16
16. Shareholder Communications Election............................ 16
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C/M 11212.0012 304365.1
CUSTODIAN CONTRACT
This Contract between Equitable Real Estate Hyperion High Yield
Commercial Mortgage Fund, Inc., a corporation organized and existing under the
laws of the State of Maryland, having its principal place of business at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, hereinafter called the "Fund", and
State Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
00000, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as
follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Articles of Incorporation. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock, $
.001 par value, ("Shares") of the Fund as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of the Fund held
or received by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
3), the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the Board of Directors of the
Fund, and provided that the Custodian shall have no more or less responsibility
or liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund
Held by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property,
including all securities owned by the Fund, other than
(a) securities which are maintained pursuant to Section 2.10
in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department
of the Treasury, collectively referred to herein as
"Securities System" and (b) commercial paper of an issuer
for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited
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and/or maintained in the Direct Paper System of the
Custodian pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by the Fund held by the Custodian
or in a Securities System account of the Custodian or in the
Custodian's Direct Paper book entry system account ("Direct
Paper System 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 for the account of the
Fund and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Fund;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of
Section 2.10 hereof;
4) To the depository agent in connection with tender or
other similar offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities
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;
6) To the issuer thereof, or its agent, for transfer into
the name of the Fund or into the name of any nominee or
nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; 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 are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except
as may arise from the Custodian's own negligence or
willful misconduct;
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8) 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
contained in 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;
9) In the case of warrants, rights or similar securities,
the surrender thereof in 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;
10) For delivery in connection with any loans of securities
made by the Fund, but only against receipt of adequate
collateral as agreed upon from time to time by the
Custodian and the Fund, 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 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
the Treasury, the Custodian will not be held liable or
responsible for the delivery of securities owned by the
Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-
dealer registered under the Securities Exchange Act of
1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements
in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any
similar organization or
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organizations, regarding account deposits in connection
with transactions by the Fund;
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 of
Directors or of the Executive Committee signed by an
officer and certified by the Secretary or an Assistant
Secretary, specifying the securities of the Fund to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered
in the name of the Fund or in the name of any nominee of the
Fund or of any nominee of the Custodian which nominee shall
be assigned exclusively to the Fund, unless the Fund has
authorized in writing the appointment of a nominee to be
used in common with other registered investment companies
having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to
Section 2.9 or in the name or nominee name of any sub-
custodian appointed pursuant to Article 1. All securities
accepted by the Custodian on behalf of the Fund under the
terms of this Contract shall be in "street name" or other
good delivery form. If, however, the Fund directs the
Custodian to maintain securities in "street name", the
Custodian shall utilize its best efforts only to timely
collect income due the Fund on such securities and to notify
the Fund on a best efforts basis only of relevant corporate
actions including, without limitation, penitency of calls,
maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of the Fund,
subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, 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 Fund,
other than cash maintained by the Fund 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 Fund 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 it 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
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deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Directors of the Fund. Such funds
shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall,
upon the receipt of Proper Instructions, make federal funds
available to the Fund as of specified times agreed upon from
time to time by the Fund and the Custodian in the amount of
checks received in payment for Shares of the Fund which are
deposited into the Fund's account.
2.6 Collection of Income. Subject to the provisions of
Section 2.3, the Custodian shall collect on a timely basis
all income and other payments with respect to registered
securities held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis 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 its agent thereof and shall
credit such income, as collected, to the Fund's custodian
account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on
securities held hereunder. Income due the Fund on
securities loaned pursuant to the provisions of Section 2.2
(10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith,
other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the
Fund is properly entitled.
2.7 Payment of Fund 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 Fund in the following cases only:
1) Upon the purchase of securities, options, futures
contracts or options on futures contracts for the
account of the Fund but only (a) against the delivery
of such securities or evidence of title to such
options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm
or trust company doing business in the United States or
abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
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purpose) registered in the name of the Fund or in the name of
a nominee of the Custodian referred to in Section 2.3 hereof
or in proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case
of a purchase involving the Direct Paper System, in accordance
with the conditions set forth in Section 2.11; (d) in the case
of repurchase agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the Custodian
along with written evidence of the agreement by the Custodian
to repurchase such securities from the Fund or (e) for
transfer to a time deposit account of the Fund in any bank;
such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions as defined in Section 3;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section
2.2 hereof,
3) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: interest, taxes,
management, accounting, transfer agent and legal fees,
and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or
treated as deferred expenses;
4) For the payment of any dividends declared pursuant to
the governing documents of the Fund;
5) For payment of the amount of dividends received in
respect of securities sold short;
6) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of
a resolution of the Board of Directors or of the
Executive Committee of the Fund signed by an officer of
the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment
is to be made.
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2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase
of securities for the account of the Fund is made by the
Custodian in advance of receipt of the securities purchased
in the absence of specific written instructions from the
Fund to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same extent as
if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove)
any other bank or trust company which is itself qualified
under the Investment Company Act of 1940, as amended, to act
as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time
to time direct; provided, however, that the appointment of
any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian
may deposit and/or maintain securities owned by the Fund in
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,
or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities
of the Fund which are maintained in a Securities System
shall identify by book-entry those securities belonging
to the Fund;
3) The Custodian shall pay for securities purchased for
the account of the Fund upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The
Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the
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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 Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall
furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System
for the account of the Fund;
4) The Custodian shall provide the Fund with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received the initial
certificate required by Article 12 hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Fund for any loss or damage to the Fund resulting from
use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their
employees or from failure of the Custodian or any such
agent to enforce effectively such rights as it may have
against the Securities System; at the election of the
Fund, 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 Fund has
not been made whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned by the Fund
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of Proper
Instructions;
2) The Custodian may keep securities of the Fund in the
Direct Paper System only if such securities are
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represented in an account ("Account") of the Custodian in the
Direct Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities
of the Fund which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Fund;
4) The Custodian shall pay for securities purchased for
the account of the Fund upon the making of an entry on
the records of the Custodian to reflect such payment
and transfer of securities to the account of the Fund.
The Custodian shall transfer securities sold for the
account of the Fund upon the making of an entry on the
records of the Custodian to reflect such transfer and
receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of
each transfer to or from the account of the Fund, in
the form of a written advice or notice, of Direct Paper
on the next business day following such transfer and
shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transaction in the
Securities System for the account of the Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may
reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures
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required by Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission relating
to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in
the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of
Directors or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.13 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 Fund held by it and in
connection with transfers of such securities.
2.14 Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of the Fund or a
nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall
promptly deliver to the Fund such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.15 Communications Relating to Fund Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund all written information (including,
without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or
sold by the Fund) received by the Custodian from issuers of
the securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall transmit
promptly to the Fund all written information received by the
Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or his agents) making
the tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer or
any other similar transaction, the Fund shall notify the
Custodian at least three business days prior to the date on
which the Custodian is to take such action.
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2.16 Reports to Fund by Independent Public Accountants.
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on
the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian
under this Contract; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Fund, to
provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies,
the reports shall so state.
3. Proper Instructions
Proper Instructions as used herein means a writing signed or initialed
by one or more person or persons as the Board of Directors shall have from time
to time authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the purpose
for which such action is requested. 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 Fund shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three-party
agreement which requires a segregated asset account in accordance with Section
2.12.
4. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Fund;
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2) surrender securities in temporary form for securities
in definitive form;
3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Directors of the Fund.
5. Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
6. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Fund to keep
the books of account of the Fund and/or compute the net asset value per share of
the outstanding shares of the Fund or, if directed in writing to do so by the
Fund, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate weekly the
net income of the Fund as described in the Fund's currently effective prospectus
and shall advise the Fund and the Transfer Agent weekly of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the weekly income of the Fund shall be made at the time or times
described from time to time in the Fund's currently effective prospectus.
7. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to
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Section 31 thereof and Rules 31a-1 and 3la-2 thereunder. All such records shall
be the property of the Fund and shall at all times during the regular business
hours of the Custodian be open for inspection by duly authorized officers,
employees or agents of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the Fund
with a tabulation of securities owned by the Fund and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
8. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-2, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
9. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
10. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and 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,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable
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C/M 11212.0012 304365.1
for the payment of money or incurring liability of some other form, the Fund, 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.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements and assumed settlement) or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's assets to the
extent necessary to obtain reimbursement.
11. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors of the Fund has approved the initial use
of a particular Securities System, as required by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not act
under Section 2.11 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Directors has approved
the initial use of the Direct Paper System; provided further, however, that the
Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Articles of
Incorporation, and further provided, that the Fund may at any time by action of
its Board of Directors (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency 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 Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such
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C/M 11212.0012 304365.1
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
12. Successor Custodian
If a successor custodian shall be appointed by the Board of Directors
of the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
13. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund, may from time to time agree on such provisions interpretive of or in
addition to the provisions of
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C/M 11212.0012 304365.1
this Contract as may in their joint opinion be consistent with the general tenor
of this Contract. 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 Articles of Incorporation
of the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
14. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
15. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
16. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's
name, address, and share positions.
NO [ ] The Custodian is not authorized to release the
Fund's name, address, and share positions.
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C/M 11212.0012 304365.1
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of , 1995.
ATTEST EQUITABLE REAL ESTATE HYPERION HIGH-YIELD
COMMERCIAL MORTGAGE FUND, INC.
_______________ By:______________________________________
Title:___________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
_______________ By:______________________________________
Title: Executive Vice President
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C/M 11212.0012 304365.1
STATE STREET BANK AND TRUST COMPANY
EQUITABLE REAL ESTATE HYPERION HIGH YIELD COMMERCIAL MORTGAGE
FUND, INC.
CUSTODY AND ACCOUNTING FEE SCHEDULE
I. CUSTODY, PORTFOLIO AND FUND ACCOUNTING
Custody: Maintain custody of fund assets. Settle portfolio
purchases and sales. Report buy and sell fails. Determine
and collect portfolio income. Make cash disbursements and
report cash transactions. Monitor corporate actions.
Report portfolio positions.
Portfolio and Fund Accounting: Maintain investment ledgers, provide
selected portfolio transactions, position and income reports. Maintain
general ledger and capital stock accounts. Prepare daily trial balance.
Calculate net asset value. Provide selected general ledger reports.
Securities yield or market value quotations will be provided by State
Street's Automated Pricing System or by the Fund.
The fee shown below is an annual charge, billed and payable monthly,
based on average monthly net assets.
ANNUAL FEES PER PORTFOLIO
Custody, Portfolio
Fund Net Assets and Fund Accounting
First $20 Million 1/15 of 1%
Next $80 Million 1/30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charges $3,000
II. PORTFOLIO TRANSACTIONS
State Street Bank Repos $7.00
DTC or Fed Book Entry $12.00
New York Physical Settlements $25.00
Maturity Collections $8.00
PTC Purchase, Sale, Deposit or Withdrawal $20.00
Per paydown $2.00
All Other Trades $25.00
C/M 11212.0012 304365.1
III. FUTURES AND OPTIONS
Option charge for each option written or
closing contract, per issue, per broker $25.00
Option expiration or exercised charge,
per issue, per broker $15.00
Futures transactions -- no security movement $8.00
IV. HOLDINGS CHARGE
For each issue maintained -- monthly charge $5.00
V. NAVIGATOR AUTOMATED PRICING
Monthly Base Charge $175.00
Monthly Quote Charge:
Municipal Bonds via Xxxxx/S & P/Xxxxxx Data $16.00
Fixed Income Securities via IDSI $13.00
Government or Corporate Bonds via Xxxxx/
S & P or Xxxxxx $11.00
Fixed Income Securities via Xxxxxxx Xxxxx $11.00
Foreign Bonds via Extel $10.00
Options, Futures, and Private Placements $6.00
Listed and OTC Equities (Domestic & Foreign) $6.00
For billing purposes, the monthly quote charge will be based on the
average number of positions in the portfolio at month end.
VI. SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments and
the preparation of special reports will be subject to negotiation. Fees
for fund administration activities, self directed securities lending
transactions, XxXxXx financial reporting, multiple class and
master/feeder accounting, and other special items will be negotiated
separately.
C/M 11212.0012 304365.1
VII. OUT-OF-POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following:
- Telephone - Transfer Fees
- Wire Charges ($5.25 in and $5 out) - Sub-custodian Charges
- Postage and Insurance - Price Waterhouse Audit
- Courier Service Letter
- Duplicating - Federal Reserve Fee for
- Legal Fees Return Check items over
- Supplies Related to Fund Records $2,500 ($4.25 each)
- Rush Transfer ($8 each) - GNMA Transfer ($15
- Items held in Street name over each)
record date at the request - PTC Deposit/Withdrawal
of traders ($50 each) for same day turnaround
($50 each)
EQUITABLE REAL ESTATE HYPERION
HIGH YIELD COMMERCIAL STATE STREET BANK
MORTGAGE FUND, INC. & TRUST COMPANY
By ___________________________ By ___________________________
Title ________________________ Title ________________________
Date _________________________ Date _________________________
C/M 11212.0012 304365.1
STATE STREET BANK AND TRUST COMPANY
Transfer Agent and Registrar Services
Fee Agreement for
EQUITABLE REAL ESTATE HYPERION HIGH-YIELD
COMMERCIAL MORTGAGE FUND, INC.
ONGOING TRANSFER AGENT FEES
$9.00 per shareholder account per annum. Includes the issuance and registration
of the first 2,000 credit certificates in a calendar year. Excess credits beyond
2,000 to be billed at $1.25 each within a calendar year.
For each dividend reinvestment per participant $.75
For each optional cash infusion $.75
TRANSFER AGENT SERVICES
ACCOUNT MAINTENANCE SERVICES
- Establishing new accounts
- Preparation and mailing of W-9 solicitation to new accounts
without T.I.N.s.
- Address changes
- Processing T.I.N. changes
- Processing routine and non-routine transfers of ownership
- Issuance of credit certificates (see limits)
- Posting debit and credit transactions
- Providing a daily transfer journal of ownership changes
- Responding to written shareholder communications
- Responding to shareholder telephone inquiries; toll-free
number
- Placing and releasing stop transfers
- Replacing lost certificates
- Registration of credit certificates (see limits)
C/M 11212.0012 304365.1
Equitable Real Estate Hyperion High-Yield
Commercial Mortgage Fund, Inc.
Page: 2
DIVIDEND DISBURSEMENT SERVICES
- Generate and mail twelve dividend cheeks with one enclosure
- Replace lost dividend checks
- Processing of backup withholding and remittance
- Preparation and filing of Federal Tax Forms 1099 and 1042
- Preparation and filing of State Tax information as directed
- Processing of non-resident alien withholding and remittance
- Preparation of escheatment information (shares and
dividends)
DIVIDEND REINVESTMENT SERVICES PROVIDED
- Processing optional cash investments and acknowledging same
- The reinvestment of dividend proceeds for participants
- Participant withdrawal or sell requests
- Preparation, mailing and filing of Federal Tax Form 1099B
for sales
- Preparation and mailing of monthly reinvestment statements
ANNUAL MEETING SERVICES
- Coordination of mailing of proxies, proxy statement, annual report and
business reply envelope (out-of-pocket expenses such as typesetting of
proxy card, envelopes, and postage will be billed as incurred)
- Providing one set of labels of banks, brokers and nominees
for broker search
- Providing record date list
- Tabulation of returned proxies
- Daily reporting of tabulation results
C/M 11212.0012 304365.1
Equitable Real Estate Hyperion High-Yield
Commercial Mortgage Fund, Inc.
Page: 3
- Interface support during solicitation effort
- Providing one inspector of election at annual meeting (out-
of-pocket expenses billed at cost as incurred)
- Providing an annual meeting voted list
ADDRESSING AND MAILING SERVICES
- Preparation for the mailing of three (3) quarterly reports
- Addressing and mailing new shareholder welcome materials on
a biweekly basis or as agreed
INFORMATION SERVICES PROVIDED
- One complete statistical report per calendar year
- shareholders by state
- shareholders by classification code
- shareholders by share grouping
TERMS OF FEE AGREEMENT
- Minimum $1,000 per month
- Escalation Clause - The per account annual fee in upon renewal shall be
equal to the current fee increased by the lesser of (i) 6% or, (ii) the
percentage increase in the U.S. Department of Labor national index of
"Cost of Services Less Rent" for the period current at renewal.
MISCELLANEOUS
- All out-of-pocket expenses such as postage, stationery, etc.
will be billed as incurred.
C/M 11212.0012 304365.1
ADDITIONAL SERVICES
- Services over and above this Fee Schedule will be invoiced in
accordance with our current Schedule of Services or priced by
appraisal.
EQUITABLE REAL ESTATE HYPERION
HIGH-YIELD COMMERCIAL STATE STREET BANK
MORTGAGE FUND, INC. AND TRUST CO.
By ___________________________ By ___________________________
Title ________________________ Title ________________________
Date _________________________ Date _________________________
C/M 11212.0012 304365.1
