EXHIBIT (2)(j)(2)
CUSTODY AGREEMENT
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This Custody Agreement is dated November 22, 1993 between XXXXXX XXXXXXX
TRUST COMPANY, a New York State chartered trust company (the "Custodian"), and
The Xxxxxx Xxxxxxx High Yield Fund, Inc. (the "Client").
1. The Client hereby appoints the Custodian as a custodian of securities
and other property owned or under the control of the Client which are delivered
to the Custodian, or any Subcustodian as appointed below, from time to time to
be held in custody for the benefit of the Client. The Client instructs the
Custodian to establish on the books and records of the Custodian one or more
accounts (the "Accounts") in the name of the Client. The Custodian shall record
in the Accounts and shall have general responsibility for the safekeeping of all
securities ("Securities"), cash and other property (all such Securities, cash
and other property being collectively the "Property") of the Client so delivered
for custody. It is understood that certain procedures the Custodian will use in
carrying out its responsibilities under this Agreement are set forth in the
procedures manual (the "Procedures Manual") prepared by the Custodian and
delivered to the Client, as such Procedures Manual may be amended from time to
time by the Custodian by written notice to the Client. The Client acknowledges
that the Procedures Manual constitutes an integral part of this Agreement.
2. The Property may be held in custody and deposit accounts that have
been established by the Custodian with one or more domestic or foreign banks, or
through the facilities of one or more clearing agencies or central securities
depositories, as listed on Exhibit A hereto (the "Subcustodians"), as such
Exhibit may be amended from time to time by the Custodian by written notice to
the Client. The Custodian may hold Property for all of its clients with a
Subcustodian in a single account that is identified as belonging to the
Custodian for the benefit of its clients. Any Subcustodian may hold Property in
a securities depository and may utilize a clearing agency. The Client agrees
that the Property may be physically held outside the United States. The
Custodian shall not be liable for any loss resulting from cases of force majeure
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including, but not limited to, losses resulting from nationalization,
expropriation, exchange controls or acts of war or terrorism.
3. With respect to Property held by a Subcustodian pursuant to Section 2:
(a) The Custodian will identify on its books as belonging to the Client
any Property held by a Subcustodian for the Custodian's account;
(b) The Custodian will hold Property through a Subcustodian only if (i)
such Subcustodian and any securities depository or clearing agency in which
such Subcustodian holds Property, or any of their creditors, may not assert
any right, charge, security interest, lien, encumbrance or other claim of
any kind to such Property except a claim of payment for its safe custody or
administration and (ii) beneficial ownership of such Property may be freely
transferred without the payment of money or value other than for safe
custody or administration;
(c) The Custodian shall require that Property held by the Subcustodian for
the Custodian's account be identified on the Subcustodian's books as
separate from any property held by the Subcustodian other than property of
the Custodian's clients and as held solely for the benefit of clients of
the Custodian; and
(d) In the event that the Subcustodian holds Property in a securities
depository or clearing agency, such Subcustodian will be required by its
agreement with the Custodian to identify on its books such Property as
being held for the account of the Custodian as a custodian for its clients.
4. The Custodian shall allow the Client's accountants reasonable access
to the Custodian's records relating to the Property held by the Custodian as
such accountants may reasonably require in connection with their examination of
the Client's affairs. The Custodian shall also obtain from any Subcustodian (and
will require each Subcustodian to use reasonable efforts to obtain from any
securities depository or clearing agency in which it deposits Property) an
undertaking, to the extent consistent with local practice and the laws of the
jurisdiction or jurisdictions to which such Subcustodian, securities depository
or clearing agency is subject, to permit independent public accountants such
reasonable access to the records of such Subcustodian, securities depository or
clearing agency as may be reasonably required in connection with the examination
of the Client's affairs or to take such other action as the Custodian in its
judgment may deem sufficient to ensure such reasonable access.
5. The Custodian shall provide such reports and other information to the
Client and to such persons as the Client directs as the Custodian and the Client
may agree from time to time.
6. The Custodian shall make or cause any Subcustodian to make payments
from monies being held in the Accounts only:
(a) upon the purchase of Securities and then, to the extent consistent
with practice in the jurisdiction in which settlement occurs, upon the
delivery of such Securities;
(b) for payments to be made in connection with the conversion, exchange or
surrender of Securities;
(c) upon a request of the Client that the Custodian return monies being
held in the Accounts;
(d) upon a request of the Client that monies be exchanged for or used to
purchase monies denominated in a different currency;
(e) as provided in Sections 8 and 12 hereof;
(f) upon termination of this Custody Agreement as hereinafter set forth;
and
(g) for any other purpose upon receipt of Authorized Instructions (as
hereinafter defined).
Except as provided in the last two sentences of this Section 6 and as
provided in Section 8, all payments pursuant to this Section 6 will be made only
upon receipt by the Custodian of Authorized Instructions. In the event that it
is not possible to make a payment in accordance with Authorized Instructions,
the Custodian shall proceed in accordance with the procedures set forth in the
Procedures Manual. Any payment pursuant to subsection (f) of this Section 6
will be made in accordance with Section 16.
7. The Custodian, will make or cause any Subcustodian to make transfers,
exchanges or deliveries of Securities only:
(a) upon sale of such Securities and then, to the extent consistent with
practice in the jurisdiction in which settlement occurs, upon receipt of
payment therefor;
(b) upon exercise of conversion, subscription, purchase, exchange or other
similar rights pertaining to such Securities and, if applicable to such
exercise and if consistent with practice in applicable jurisdiction, only
on receipt of substitute or additional securities to be received upon such
exercise;
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(c) as provided in Section 8 hereof;
(d) upon the termination of this Custody Agreement as hereinafter set
forth; and
(e) for any other purpose upon receipt of Authorized Instructions.
Except as provided in the last two sentences of this Section 7 and as
provided in Section 8, all transfers, exchanges or deliveries of Securities
pursuant to this Section 7 will be made only upon receipt by the Custodian of
Authorized Instructions. In the event that it is not possible to transfer
Securities in accordance with Authorized Instructions of the Client, the
Custodian shall proceed in accordance with the procedures set forth in the
Procedures Manual. Any transfer or delivery pursuant to subsection (d) of this
Section 7 will be made in accordance with Section 16.
8. In the absence of Authorized Instructions to the contrary, the
Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling Property or
other similar items relating to its duties under this Agreement, provided
that all such payments shall be accounted for to the Client;
(b) receive and collect all income and principal with respect to
Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely ministerial
(including, without limitation, the exchange of interim receipts or
temporary securities for securities in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for the
securities themselves);
(d) surrender Securities at maturity or when called for redemption upon
receiving payment therefor;
(e) execute in the Client's name such ownership and other certificates as
may be required to obtain the payment of income from Securities;
(f) pay or cause to be paid, from the Accounts, any and all taxes and
levies in the nature of taxes imposed on Property by any governmental
authority in connection with custody of and transactions in such Property;
(g) endorse for collection, in the name of the Client, checks, drafts and
other negotiable instruments; and
(h) in general, attend to all nondiscretionary details in connection with
the custody, sale, purchase, transfer and other dealings with the Property.
9. "Authorized Instructions" of the Client shall mean instructions
received by telecopy, tested telex, electronic link or other electronic means or
by such other means as may be agreed in writing pursuant to the Procedures
Manual or otherwise in advance between the Client and the Custodian. The
Custodian shall be entitled to act, and shall have no liability for acting, in
accordance with the terms of this Agreement or 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 Client.
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10. Securities which must be held in registered form may be registered in
the name of the Custodian's nominee or, in the case of Securities in the custody
of an entity other than the Custodian, in the name of such entity's nominee. The
Client agrees to hold the Custodian and Subcustodians and any such nominee
harmless from any liability arising out of any such person acting as a holder of
record of such Securities. The Custodian may without notice to the Client cause
any Securities to cease to be registered in the name of any such nominee and to
be registered in the name of the Client.
11. Unless the Client and the Custodian otherwise agree, all cash received
by the Custodian for the Accounts shall be placed in deposit accounts maintained
by the Custodian for the benefit of its clients with Subcustodians or other
domestic or foreign deposit taking institutions identified to the Client. The
Client understands that such deposit accounts may not be accompanied by the
benefit of any governmental insurance. If the Custodian and the Client have
agreed in writing in advance that certain cash in the Accounts shall bear
interest, the Custodian shall be responsible for crediting the Accounts with
interest on such cash at the rates and times as agreed between the Client and
the Custodian from time to time and such rates may be greater than or less than
the rates paid on deposits by the applicable deposit taking institution. To the
extent permitted by law, any difference between the interest so paid to the
Client and the interest so paid by the Subcustodians and other deposit taking
institutions shall be for the account of the Custodian.
12. From time to time, the Custodian may extend or arrange short-term
credit for the Client which is (i) necessary in connection with payment and
clearance of securities and foreign exchange transactions or (ii) pursuant to an
agreed schedule, as and if set forth in the Procedures Manual, of credits for
dividends and interest payments on Securities. All such extensions of credit
shall be repayable by the Client on demand. The Custodian shall be entitled to
charge the Client interest for any such credit extension at rates to be agreed
upon from time to time. In addition to any other remedies available, the
Custodian shall be entitled to a right of set-off against the Property to
satisfy the repayment of such credit extensions and the payment of accrued
interest thereon. The Custodian may act as the Client's agent in foreign
exchange transactions at such rates as are agreed from time to time between the
Client and the Custodian.
13. The Client represents that (i) the execution, delivery and performance
of this Agreement (including, without limitation, the ability to obtain the
short-term extensions of credit in accordance with Section 12) are within the
Client's power and authority and have been duly authorized by all requisite
action (corporate or otherwise) and (ii) this Agreement and each extension of
short-term credit extended or arranged for the benefit of the Client in
accordance with Section 12 will at all times constitute a legal, valid and
binding obligation of the Client and be enforceable against the Client in
accordance with their respective terns, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
The Custodian represents that the execution, delivery and performance of
this Agreement is within the Custodian's power and authority and has been duly
authorized by all requisite action of the Custodian. This Agreement constitutes
the legal, valid and binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
14. The Custodian shall be responsible for the performance of only such
duties as are set forth in this Agreement or the Procedures Manual or contained
in Authorized Instructions given to the Custodian which are not contrary to the
provisions of any relevant law or regulation. The Custodian shall not be liable
to the Client or to, any other person for any action taken or omitted to be
taken by it in connection with this Agreement in the absence of negligence or
willful misconduct on the part of the Custodian or
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Subcustodian. Upon the request of the Custodian, the Client agrees to deliver to
the Custodian a duly executed power of attorney, in form and substance
satisfactory to the Custodian, authorizing the Custodian to take any action or
execute any instrument on behalf of the Client as necessary or advisable to
accomplish the purposes of this Agreement.
15. The Client agrees to pay to the Custodian from time to time such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon from time to time and the Custodian's out-of-pocket or incidental
expenses. The Client hereby agrees to hold the Custodian harmless from any
liability or loss resulting from any taxes or other governmental charges, and
any expenses related thereto, which may be imposed or assessed with respect to
the Accounts or any Property held therein. The Custodian is and any
Subcustodians are authorized to charge the Accounts for such items and the
Custodian shall have a lien, charge and security interest on any and all
Property for any amount owing to the Custodian from time to time under this
Agreement.
16. This Agreement may be terminated by the Client or the Custodian by 60
days written notice to the other, sent by registered mail. If notice of
termination is given, the Client shall, within 30 days following the giving of
such notice, deliver to the Custodian a statement in writing specifying the
successor custodian or other person to whom the Custodian shall transfer the
Property. In either event the Custodian, subject to the satisfaction of any lien
it may have, will transfer the Property to the person so specified. If the
Custodian does not receive such statement the Custodian, at its election, may
transfer the Property to a bank or trust company established under the laws of
the United States or any state thereof to be held and disposed of pursuant to
the provisions of this Agreement or may continue to hold the Property until such
a statement is delivered to the Custodian. In such event the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian remains in possession of any Property and the provisions of this
Agreement relating to the duties and obligations of the Custodian shall remain
in full force and effect; provided, however, that the Custodian shall no longer
settle any transactions in securities for the Accounts.
17. The Custodian, its agents and employees will maintain the
confidentiality of information concerning the Property held in the Client's
account, including in dealings with affiliates of the Custodian. In the event
the Custodian or any Subcustodian is requested or required to disclose any
confidential information concerning the Property, the Custodian shall to the
extent practicable and legally permissible, promptly notify the Client of such
request or requirement so that the Client may seek a protective order or waive
the Custodian's or such Subcustodian's compliance with this Section 17. In the
absence of such a waiver, if the Custodian or such Subcustodian is compelled, in
the opinion of its counsel, to disclose any confidential information, the
Custodian or such Subcustodian may disclose such information to such persons as,
in the opinion of counsel, is so required.
18. Any notice or other communication from the Client to the Custodian,
unless otherwise provided by this Agreement, shall be sent by certified or
registered mail to Xxxxxx Xxxxxxx Trust Company, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxx, 00000, Attention: President, and any notice from the Custodian to the
Client is to be mailed postage prepaid, addressed to the Client at the address
appearing below, or as it may hereafter be changed on the Custodian's records in
accordance with notice from the Client.
19. The Custodian may assign all of its rights and obligations hereunder
to any other entity which is qualified to act as custodian under the terms of
this Agreement and majority-owned, directly or indirectly, by Xxxxxx Xxxxxxx
Group Inc., and upon the assumption of the rights and obligations hereunder by
such entity, such entity shall succeed to all of the rights and obligations of,
and be substituted for, the Custodian hereunder as if such entity had been
originally named as custodian herein. The Custodian shall give prompt written
notice to the Client upon the effectiveness of any such assignment.
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This Agreement shall bind the successors and assigns of the Client and the
Custodian and shall be governed by the laws of the State of New York applicable
to contracts executed in and to be performed in that state.
THE XXXXXX XXXXXXX
HIGH YIELD FUND, INC.
By /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President
Address for record:_________________________________
_________________________________
Accepted:
XXXXXX XXXXXXX TRUST COMPANY
By /s/ Xxxxxx Rocatto
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Authorized Signature
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