EX-99.G
CUSTODIAN AGREEMENT
AGREEMENT made as of this 1st day of September, 1998, between Xxxxxx
Series Trust, a business trust organized under the laws of the state of delaware
(the "Fund"), and INVESTORS Bank & TRUST COMPANY, a Massachusetts trust company
(the "Bank").
The Fund, an open-end management investment company, on behalf of the
Portfolios/series listed on Appendix a hereto (as such Appendix a may be amended
---------- ----------
from time to time) (each a "Portfolio" and collectively, the "Portfolios"),
desires to place and maintain all of its Portfolio Securities and cash in the
custody of the Bank. The Bank has at least the minimum qualifications required
by Section 17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") To
Act as custodian of the Portfolio Securities and cash of the Fund, and has
indicated its willingness to so Act, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
Agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
------------------------
custodian of its Portfolio Securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to Act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix B
----------
hereto.
2. Definitions. Whenever used herein, the terms listed below will
-----------
have the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the
-----------------
Persons duly Authorized to give proper instructions or otherwise Act on behalf
of the Fund by appropriate resolution of its Board, and set forth in a
Certificate as required by Section 4 hereof.
2.2 Board. Board will mean the Board of trustees of the Fund.
-----
2.3 Security. The term Security as used herein will have the
--------
same meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, Certificate of interest or participation in any profit
sharing Agreement, collateral-trust Certificate, preorganization Certificate or
subscription, transferable share, investment contrAct, voting-trust Certificate,
Certificate of deposit for a Security, frActional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any Security, Certificate of deposit, or group or index of Securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national Securities Exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "Security", or any Certificate of interest or participation in, temporary or
interim Certificate for, receipt for,
guarantee of, or warrant or right to subscribe to, or option contrAct to
purchase or sell any of the foregoing, and Futures, forward contrActs and
options thereon.
2.4 Portfolio Security. Portfolio Security will mean any
------------------
Security owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean,
---------------------
unless otherwise indicated, any request, direction, instruction, or
certification in writing signed by any two Authorized Persons of the Fund.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
-----------------
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency Securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean the Depository Trust
----------
Company ("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17a of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other Person Authorized to Act
as a Depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
-------------------
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
the Bank shall Act upon and comply with any subsequent Proper instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any Action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such Action requires
the Bank to Act, the Fund shall give the Bank specific Proper Instructions as to
the Action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Board accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communication
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing that such procedures afford adequate
safeguards for the Fund's assets.
3. Separate Accounts. If the Fund 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 Fund shall be
deemed to refer to the Fund Acting on behalf of one or more of its series, any
reference in this Agreement to any assets of the Fund, 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 Fund shall be deemed to refer to duties and
obligations with respect to such individual series and any obligation or
liability of the Fund hereunder shall be binding only with respect to such
individual series, and shall be discharged only out of the assets of such
series.
4. Certification as to Authorized Persons. The Secretary or
--------------------------------------
Assistant Secretary of the Fund will at all times maintain on file with the Bank
his or her certification to the Bank, in such form as may be acceptable to the
Bank, of (i) The names and signatures of the Authorized Persons and (ii) The
names of the members of the Board, it being understood that upon the occurrence
of any change in the information set forth in the most recent certification on
file (including without limitation any Person named in the most recent
certification who is no longer an Authorized Person as designated therein), the
Secretary or Assistant Secretary of the Fund will sign a new or amended
certification setting forth the change and the new, additional or omitted names
or signatures. The Bank will be entitled to rely and Act upon any Officers'
Certificate given to it by the Fund which has been signed by Authorized Persons
named in the most recent certification received by the Bank.
5. Custody of Cash. As custodian for the Fund, the Bank will open
---------------
and maintain a separate Account or Accounts in the name of the Fund or in the
name of the Bank, as Custodian of the Fund, and will deposit to the Account of
the Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed Funds,
delivered to the Bank, subject only to draft or order by the Bank Acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash Accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit Account
upon which the Bank Reserves the right to require seven (7) days notice prior to
withdrawal of cash from such an Account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding shares of common stock of the
Fund, notification from the Fund's transfer agent as provided in Section 7,
requesting such payment, designating the payee or the Account or Accounts to
which the Bank will release Funds for deposit, and stating that it is for a
purpose permitted under the terms of this Section 5, specifying the applicable
subSection, the Bank will make payments of cash held for the Accounts of the
Fund, insofar as Funds are available for that purpose, only as permitted in
subSections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of Securities for the
----------------------
Fund, against contemporaneous receipt of such Securities by the Bank or against
delivery of such Securities to the Bank in accordance with generally accepted
settlement prActices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the Account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction
report in the case of book entry paper (as that term is defined in Section 6.6
hereof)) of purchase of the Securities received by the Bank before such payment
is made, as confirmed in the Proper Instructions received by the Bank before
such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
-----------
repurchase or redemption of shares of the Fund offered for repurchase or
redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the
-------------------------------------
Account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, distribution fees, fees of the Bank for its services hereunder
and reimbursement of the expenses and liabilities of the Bank as provided
hereunder, fees of any transfer agent, fees for legal, Accounting, and auditing
services, or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection
--------------------------------
with the conversion, Exchange or surrender of Portfolio Securities or Securities
subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Fund,
------------------
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for
-----------------
the purpose of collateralizing the obligation to return to the Fund Certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed Certificates.
5.7 Foreign Exchange TransActions.
-----------------------------
(a) For payments in connection with foreign Exchange contrActs or
options to purchase and sell foreign currencies for spot and future delivery
(collectively, "Foreign Exchange Agreements") which may be entered into by the
Bank on behalf of the Fund upon the receipt of Proper Instructions, such Proper
Instructions to specify the currency broker or Banking institution (which may be
the Bank, or any other subcustodian or agent hereunder, Acting as principal)
with which the contrAct or option is made, and the Bank shall have no duty with
respect to the selection of such currency brokers or Banking institutions with
which the Fund deals or for their failure to comply with the terms of any
contrAct or option.
(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
Security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party Acting
on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to
charge any such payment due under any foreign Exchange Agreement against any
balance of Account standing to the credit of the Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of
-------------------------
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the Person or Persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an Authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper Corporate purpose.
5.9 Termination: Upon the termination of this Agreement as
-----------
hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
----------
6.1 Segregation and Registration. Except as otherwise provided
----------------------------
herein, and except for Securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive and
hold pursuant to the provisions hereof, in a separate Account or Accounts and
physically Segregated at all times from those of other Persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
Account of the Fund. all such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise directed
by proper instructions or an officers' Certificate), in the name of a registered
nominee of the Bank as defined in the internal revenue code and any regulations
of the treasury department issued thereunder, and will execute and deliver all
such Certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
------------------
will vote any of the Portfolio Securities held hereunder, except in accordance
with proper instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Fund all notices, proxies
and proxy soliciting materials delivered to the Bank with respect to such
Securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that an
----------------
Issuer of any Portfolio Security has taken or intends to take a Corporate Action
(a "Corporate Action") That affects the rights, privileges, powers, preferences,
qualifications or ownership of a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which Corporate Action requires an affirmative response or Action on
the part of the holder of such Portfolio Security (a "response"), the Bank shall
notify the Fund promptly of the Corporate Action, the response required in
connection with the Corporate Action and the Bank's deadline for receipt from
the Fund of proper instructions regarding the response (the "response
deadline"). The Bank shall forward to the Fund via telecopier and/or overnight
courier all notices, information statements or other materials relating to the
Corporate Action promptly after receipt of such materials by the Bank.
(a) The Bank shall Act upon a required response only after receipt by
the Bank of proper instructions from the Fund no later than 5:00 p.m. on the
date specified as the Response Deadline and only if the Bank (or its agent or
subcustodian hereunder) has Actual possession of all necessary Securities,
consents and other materials no later than 5:00 p.m. on the date specified as
the response deadline.
(b) The Bank shall have no duty to Act upon a required response if
proper instructions relating to such response and all necessary Securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. on the date specified as the response deadline.
notwithstanding, the Bank may, in its sole discretion, use its best efforts to
Act upon a response for which proper instructions and/or necessary Securities,
consents or other materials are received by the Bank after 5:00 p.m. on the
date specified as the response deadline, it being acknowledged and agreed by the
parties that any undertaking by the Bank to use its best efforts in such
circumstances shall in no way create any duty upon the Bank to complete such
response prior to its expiration.
(c) In the event that the Fund notifies the Bank of a Corporate Action
requiring a Response and the Bank has received no other notice of such Corporate
Action, the response deadline shall be 48 hours prior to the response expiration
time set by the Depository processing such Corporate Action.
(d) Section 14.3(e) of this Agreement shall govern any Corporate
Action involving foreign Portfolio Securities held by a Selected Foreign Sub-
custodian. It is understood by the parties that the Board of Trustees of the
Fund has not authorized the use of Foreign Sub-Custodians. Prior to the use of
Foreign Sub-Custodians as provided under this Agreement, the Board of Trustees
shall have approved the use of such Foreign Sub-Custodians.
6.4 Book-Entry System. Provided (i) The Bank has received a
-----------------
certified copy of a resolution of the Board specifically approving deposits of
Fund assets in the Book-Entry System, and (ii) for any subsequent changes to
such arrangements following such
approval, the Board has reviewed and approved the arrangement and has not
delivered an officer's Certificate to the Bank indicating that the Board has
withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an Account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to the
Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other Securities deposited in the Account and shall at all times during
the regular business hours of the Bank (or such agent) be open for inspection by
duly Authorized officers, employees or agents of the Fund. Where Securities are
transferred to the Fund's Account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of Securities in a
fungible bulk of Securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's Account on the books of the Federal
Reserve Bank;
(c) The Bank (or its agent) shall pay for Securities purchased for the
Account of the Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the Account,
and (ii) The making of an entry on the records of the Bank (or its agent) To
reflect such payment and transfer for the Account of the Fund. The Bank (or its
agent) shall transfer Securities sold or loaned for the Account of the Fund
upon
(i) receipt of advice from the Book-Entry System that payment for
Securities sold or payment of the initial cash collateral against the
delivery of Securities loaned by the Fund has been transferred to the
Account; and
(ii) The making of an entry on the records of the Bank (or its
agent) To reflect such transfer and payment for the Account of the Fund.
copies of all advices from the Book-Entry System of transfers of Securities
for the Account of the Fund shall identify the Fund, be maintained for the
Fund by the Bank and shall be provided to the Fund at its request. The
Bank shall send the Fund a confirmation, as defined by Rule 17f-4 of the
1940 Act, of any transfers to or from the Account of the Fund;
(d) The Bank will promptly provide the Fund with any report obtained
by the Bank or its agent on the Book-Entry System's Accounting System, internal
Accounting control and procedures for safeguarding Securities deposited in the
Book-Entry System;
6.5 Use of a Depository. Provided (i) The Bank has received a
-------------------
certified copy of a resolution of the Board specifically approving deposits in
dtc or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval,
the Board has reviewed and approved the arrangement and has not delivered an
Officer's Certificate to the Bank indicating that the Board has withdrawn its
approval:
(a) The Bank may use a Depository to hold, receive, Exchange, release,
lend, deliver and otherwise deal with Portfolio Securities including stock
dividends, rights and other items of like nature, and to receive and remit to
the Bank on behalf of the Fund all income and other payments thereon and to take
all steps necessary and proper in connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the
name of any nominee or nominees used by such Depository;
(c) Payment for Securities purchased and sold may be made through the
clearing medium employed by such Depository for transactions of participants
Acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the Securities to or for the Account of the Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the Securities to or for the Account
of the Fund; and upon any sale of Portfolio Securities, delivery of the
Securities will be made only against payment therefor or, in the event Portfolio
Securities are loaned, delivery of Securities will be made only against receipt
of the initial cash collateral to or for the Account of the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any Certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to
the Bank upon its request;
(ii) Proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded
immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository promptly forwards to the Bank confirmation
of any purchase or sale of Portfolio Securities and of the appropriate book
entry made by such Depository to the Fund's Account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and
duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank all internal Accounting
control reports, whether or not audited by an independent public
Accountant, as well as such other reports as the Fund may reasonably
request in order to verify the Portfolio Securities held by such
Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
---------------------------------------------
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a System maintained by the Bank for the holding of
commercial paper in Book-Entry form ("Book-Entry paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of proper instructions and upon receipt of confirmation from an
Issuer (as defined below) That the Fund has purchased such Issuer's Book-Entry
paper, the Bank shall issue and hold in Book-Entry form, on behalf of the Fund,
commercial paper issued by Issuers with whom the Bank has entered into a book-
entry Agreement (the "Issuers"). in maintaining procedures for Book-Entry
paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry paper held by the Fund in an
Account of the Bank that includes only assets held by it for customers;
(b) The records of the Bank with respect to the Fund's purchase of
Book-Entry paper through the Bank will identify, by Book-Entry, commercial paper
belonging to the Fund which is included in the Book-Entry System and shall at
all times during the regular business hours of the Bank be open for inspection
by duly Authorized officers, employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry paper purchased for the Account
of the Fund upon contemporaneous (i) receipt of advice from the Issuer that such
sale of Book-Entry paper has been effected, and (ii) The making of an entry on
the records of the Bank to reflect such payment and transfer for the Account of
the Fund;
(d) The Bank shall cancel such Book-Entry paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry paper has been transferred to the Fund, and (ii) The making of
an entry on the records of the Bank to reflect such payment for the Account of
the Fund; and
(e) The Bank will send to the Fund such reports on its System of
internal Accounting control with respect to the Book-Entry paper as the Fund may
reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has
------------------------------
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated by
a Bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and
(ii) for each year following such approval the Board has reviewed and approved
the arrangement and has not delivered an officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such Bank Acting as a subcustodian hereunder.
6.8 Eurodollar CDs. any Portfolio Securities which are eurodollar
--------------
CDs may be physically held by the European branch of the u.s. Banking
institution that is the Issuer of such eurodollar CD (a "European Branch"),
provided that such Portfolio Securities are identified on the books of the Bank
as belonging to the Fund and that the books of the Bank
identify the European branch holding such Portfolio Securities. Notwithstanding
any other provision of this Agreement to the contrary, except as stated in the
first sentence of this subSection 6.8, the Bank shall be under no other duty
with respect to such Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
--------------------------------
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
(i) The Bank shall take Action as to put options ("puts") and
call options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of any
Agreement entered into upon receipt of proper instructions among the Bank,
any broker-dealer registered with the national association of Securities
Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to the
compliance with the Rules of the Options Clearing Corporation and of any
registered national Securities Exchange, or of any similar organization or
organizations.
(ii) Unless another Agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or
is maintaining adequate margin, if required, with any broker in connection
with any option, nor shall the Bank be under duty or obligation to present
such option to the broker for exercise unless it receives proper
instructions from the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or
withdrawn from a Segregated Account (as defined in subSection 6.10 below).
the Bank specifically, but not by way of limitation, shall not be under any
duty or obligation to: (i) periodically check or notify the Fund that the
amount of such collateral held by a broker or held in a Segregated Account
is sufficient to protect such broker or the Fund against any loss; (ii)
effect the return of any collateral delivered to a broker; or (iii) advise
the Fund that any option it holds, has or is about to expire. Such duties
or obligations shall be the sole responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and Futures
contrActs ("Futures") purchased or sold by the Fund in accordance with the
provisions of any Agreement entered into upon the receipt of proper
instructions among the Fund, the Bank 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 organizations, regarding Account
deposits in connection with transactions by the Fund.
(ii) The responsibilities of the Bank as to Futures, puts and
calls traded on commodities Exchanges, any Futures commission merchant
Account and the Segregated Account shall be limited as set forth in
subparagraph (a)(ii) of this Section 6.9 as if such subparagraph referred
to Futures Commission Merchants rather than brokers, and Futures and puts
and calls thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
------------------
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into
a Segregated Account upon receipt of proper instructions in the following
circumstances:
(i) in accordance with the provisions of any Agreement among the
Fund, the Bank 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 organizations regarding escrow or other
arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or Securities in
connection with options purchased or written by the Fund or Commodity
Futures purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as cash, u.s.
government Securities or other high grade debt obligations, having a market
value (marked to market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or "when-issued" Agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase Agreements entered into
with broker-dealer firms;
(iv) for the purposes of compliance by the Fund with the
procedures 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;
(v) for other proper Corporate purposes, but only, in the case of
this clause (v), upon receipt of, in addition to proper instructions, a
certified copy of a resolution of the Board, or of the executive committee
of the Board 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.
(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in accordance with the
provisions of any Agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such Agreements;
(ii) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued Agreements for the purchase
of Portfolio Securities and under reverse repurchase Agreements;
(iii) for Exchange for other liquid assets of equal or greater
value deposited in the Segregated Account;
(iv) To the extent that the Fund's outstanding forward commitment
or when-issued Agreements for the purchase of Portfolio Securities or
reverse repurchase Agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in
the Segregated Account;
(v) for delivery upon settlement of a forward commitment or when-
issued Agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to (a)(v) above,
in accordance with the purposes of such Account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
--------------------------------------
receipt of Proper Instructions relating to the purchase by the Fund of interest-
bearing fixed-term and call deposits, transfer cash, by wire or otherwise, in
such amounts and to such Bank or Banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Fund appropriate notation as to the amount of each such deposit, the
Banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. such deposits shall be deemed
Portfolio Securities of the Fund and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect of
other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, Exchange,
----------------------
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, Exchange, delivery or release under this Section only upon receipt of
Proper Instructions. The Proper Instructions shall state that such transfer,
Exchange or delivery is for a purpose permitted under the terms of this Section
6.12, and shall specify the applicable subSection, or describe the purpose of
the transaction with sufficient particularity to permit the Bank to ascertain
the applicable subSection. after receipt of such Proper Instructions, the Bank
will transfer, Exchange, deliver or release Portfolio Securities only in the
following circumstances:
(a) Upon sales of Portfolio Securities for the Account of the Fund,
against contemporaneous receipt by the Bank of payment therefor in full, or
against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale received by the Bank before such payment is made,
as confirmed in the Proper Instructions received by the Bank before such payment
is made;
(b) In exchange for or upon conversion into other Securities alone or
other Securities and cash pursuant to any plan of merger, consolidation,
reorganization, share split-up, change in par value, recapitalization or
readjustment or otherwise, upon exercise of subscription, purchase or sale or
other similar rights represented by such Portfolio Securities, or for the
purpose of tendering shares in the event of a tender offer therefor, provided,
however, that in the event of an offer of Exchange, tender offer, or other
exercise of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender in a
timely manner unless such Proper Instructions are received by the Bank at least
two business days prior to the date required for tender, and unless the Bank (or
its agent or subcustodian hereunder) has Actual possession of such Security at
least two business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to
their terms into other Securities;
(d) for the purpose of redeeming in-kind shares of the Fund
upon authorization from the Fund;
(e) in the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio Securities
held by the Bank in order to collateralize loans made to the Fund by any Bank,
including the Bank; provided, however, that such Portfolio Securities will be
released only upon payment to the Bank for the Account of the Fund of the moneys
borrowed, provided further, however, that in cases where additional collateral
is required to secure a borrowing already made, and such fAct is made to appear
in the Proper Instructions, Portfolio Securities may be released for that
purpose without any such payment. in the event that any pledged Portfolio
Securities are held by the Bank, they will be so held for the Account of the
lender, and after notice to the Fund from the lender in accordance with the
normal procedures of the lender and any loan Agreement between the Fund and the
lender that an event of deficiency or default on the loan has occurred, the Bank
may deliver such pledged Portfolio Securities to or for the Account of the
lender;
(h) for the purpose of releasing Certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market value
of such Security, as set forth in the Proper Instructions received by the Bank
before such payment is made;
(i) for the purpose of delivering securities lent by the Fund to a
bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase Agreement relating to such Securities
entered into by the Fund;
(j) for other authorized transactions of the Fund or for other proper
Corporate purposes; provided that before making such transfer, the Bank will
also receive a certified copy of resolutions of the Board, signed by an
Authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an Authorized transaction of the Fund or such purpose to be a proper Corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
Securities or cash receivable in Exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Fund held by
-----------
the Bank in connection with redemptions and repurchases by the Fund of its
outstanding shares, the Bank will rely on notification by the Fund's transfer
agent of receipt of a request for redemption and Certificates, if issued, in
proper form for redemption before such payment is made. Payment shall be made
in accordance with the Articles of Incorporation or Declaration of Trust and By-
laws of the Fund (the "Articles"), from assets available for said purpose.
8. Merger, Dissolution, etc. of Fund. in the case of the following
----------------------------------
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities held
by it under this Agreement and disburse cash only upon the order of the Fund set
forth in an officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees,
disbursements and expenses of the Bank, this Agreement will terminate and the
Bank shall be released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding
-------------------------------------------
anything herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following Actions without
prior authorization or instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name
of the Fund all checks, drafts, or other negotiable or transferable instruments
or other orders for the payment of money received by it for the Account of the
Fund and hold for the Account of the Fund all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio Securities
held thereunder;
9.2 Present for payment all coupons and other income items held by it
for the Account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the Account of the Fund;
9.3 Receive and hold for the Account of the Fund all Securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar Securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership
and other Certificates and affidavits required by the internal revenue code or
the regulations of the Treasury Department issued thereunder, or by the laws of
any state, now or hereafter in effect, inserting the Fund's name on such
Certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
the Bank will execute and deliver such Certificates in connection with Portfolio
Securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the Account of the Fund; and
9.6 Exchange interim receipts or temporary Securities for
definitive Securities.
10. Collections and Defaults. The Bank will use reasonable efforts
------------------------
to collect any Funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice Actually received by it of any call for redemption,
offer of Exchange, right of subscription, reorganization or other proceedings
affecting such Securities. if Portfolio Securities upon which such income is
payable are in default or payment is refused after due demand or presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.
11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terms and conditions of this Agreement, and in compliance with
the applicable Rules and regulations of the 1940 Act. The books and records of
the Bank pertaining to its Actions under this Agreement and reports by the Bank
or its independent Accountants concerning its accounting
system, procedures for safeguarding Securities and internal Accounting controls
will be open to inspection and audit at reasonable times by officers of or
auditors employed by the Fund or such Persons Authorized by the Fund, and will
be preserved by the Bank in the manner and in accordance with the applicable
Rules and regulations under the 1940 Act.
The Bank shall perform fund accounting and shall keep the books of
Account and render statements or copies from time to time as reasonably
requested by the Treasurer or any executive officer of the Fund. Such books
shall be maintained and preserved in compliance with applicable Rules and
regulations under the 1940 Act.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of Accounts, and other ministerial matters of
like nature.
12. Fund Evaluation and Yield Calculation.
-------------------------------------
12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
---------------
directed by the Board, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board, the net asset value and the public offering price of a share of capital
stock of the Fund, such determination to be made in accordance with the
provisions of the Declaration and By-laws of the Fund and the Prospectus and
Statement of Additional Information relating to the Fund, as they may from time
to time be amended, and any applicable resolutions of the Board at the time in
force and applicable; and promptly to notify the Fund, the proper Exchange and
the NASD or such other Persons as the Fund may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) The manner of accrual of the liabilities of the Fund
and in respect of liabilities of the Fund not appearing on its books of Account
kept by the Bank, (ii) Reserves, if any, Authorized by the Board or that no such
Reserves have been Authorized, (iii) The source of the quotations to be used in
computing the net asset value, (iv) The value to be assigned to any Security for
which no price quotations are available, and (v) The method of computation of
the public offering price on the basis of the net asset value of the shares, and
the Bank shall not be responsible for any loss occasioned by such reliance or
for any good faith reliance on any quotations received from a source pursuant to
(iii) above.
12.2. Yield Calculation. The Bank will compute the performance
-----------------
results of the Fund (the "Yield Calculation") in accordance with the provisions
of Release No. 33-6753 and Release No. IC-16245 (February 2, 1988) (the
"Releases") promulgated by the Securities and Exchange Commission, and any
subsequent amendments to, published interpretations of or general conventions
accepted by the staff of the Securities and Exchange commission with respect to
such releases or the subject matter thereof ("Subsequent Staff Positions"),
subject to the terms set forth below:
(a) The Bank shall compute the yield calculation for the Fund for the
stated periods of time as shall be mutually agreed upon, and communicate in a
timely manner the result of such computation to the Fund.
(b) in performing the Yield Calculation, the Bank will derive the
items of data necessary for the computation from the records it generates and
maintains for the Fund pursuant Section 11 hereof. The Bank shall have no
responsibility to review, confirm, or otherwise assume any duty or liability
with respect to the accuracy or correctness of any such data supplied to it by
the Fund, any of the Fund's designated agents or any of the Fund's designated
third party providers.
(c) at the request of the Bank, the Fund shall provide, and the Bank
shall be entitled to rely on, written standards and guidelines to be followed by
the Bank in interpreting and applying the computation methods set forth in the
releases or any subsequent staff positions as they specifically apply to the
Fund. in the event that the computation methods in the releases or the
subsequent staff positions or the application to the Fund of a standard or
guideline is not free from doubt or in the event there is any question of
interpretation as to the characterization of a particular Security or any aspect
of a Security or a payment with respect thereto (e.g., original issue discount,
participating debt Security, income or return of capital, etc.) or otherwise or
as to any other element of the computation which is pertinent to the Fund, the
Fund or its designated agent shall have the full responsibility for making the
determination of how the Security or payment is to be treated for purposes of
the computation and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to make
independent determinations with respect to any item which is covered by this
Section, and shall not be responsible for its computations made in accordance
with such determinations so long as such computations are mathematically
correct.
(d) The Fund shall keep the Bank informed of all publicly available
information and of any non-public advice, or information obtained by the Fund
from its independent auditors or by its Personnel or the Personnel of its
investment adviser, or subsequent staff positions related to the computations to
be undertaken by the Bank pursuant to this Agreement and the Bank shall not be
deemed to have knowledge of such information (except as contained in the
Releases) unless it has been furnished to the Bank in writing.
13. Additional Services. The Bank shall perform the additional
-------------------
services for the Fund as are set forth on Appendix C hereto. Appendix C may be
---------- ----------
amended from time to time upon Agreement of the parties to include further
additional services to be provided by the Bank to the Fund, at which time the
fees set forth in Appendix B shall be appropriately amended.
----------
14. Duties of the Bank.
------------------
14.1 Performance of Duties and Standard of Care. In performing its
------------------------------------------
duties hereunder and any other duties listed on any schedule hereto, if any, the
Bank will be entitled to receive and Act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will be without
liability for any Action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
(a) The validity of the issue of any Portfolio Securities purchased by
or for the Fund, the legality of the purchases thereof or the propriety of the
price incurred therefor;
(b) The legality of any sale of any Portfolio Securities by or for the
Fund or the propriety of the amount for which the same are sold;
(c) The legality of an issue or sale of any shares of the Fund or the
sufficiency of the amount to be received therefor;
(d) The legality of the repurchase of any shares of the Fund or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration of any dividend by the Fund or the
legality of the distribution of any Portfolio Securities as payment in kind of
such dividend; and
(f) any property or moneys of the Fund unless and until received by
it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the Account of the Fund are such as may properly be held by the Fund
under the provisions of its Declaration, By-laws, any Federal or state statutes
or any Rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
-------------------------------------------------------------
held in the United States. The Bank may employ agents of its own selection in
-------------------------
the performance of its duties hereunder and shall be responsible for the Acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed by
one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such subcustodian
meets at least the minimum qualifications required by Section 17(f)(1) of the
1940 Act to act as a custodian of the Fund's assets with respect to property of
the Fund held in the United States. The Bank shall have no liability to the
Fund or any other Person by reason of any Act or omission of any such
subcustodian and the Fund shall indemnify the Bank and hold it harmless from and
against any and all Actions, suits and claims, arising directly or indirectly
out of the performance of any subcustodian. Upon request of the Bank, the Fund
shall assume the entire defense of any Action, suit, or claim subject to the
foregoing indemnity. The Fund shall pay all fees and expenses of any
subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund
-------------------------------------------------------
Held Outside of the United States.
---------------------------------
(a) Appointment of Foreign Custody Manager.
--------------------------------------
(i) If the Fund has appointed the Bank Foreign Custody Manager
(as that term is defined in Rule 17f-5 under the 1940 Act), the Bank's
duties and obligations with respect to the Fund's Portfolio Securities and
other assets maintained outside the United States shall be, to the extent
not set forth herein, as set forth in the delegation Agreement between the
Fund and the Bank (the "Delegation Agreement").
(ii) If the Fund has appointed any other Person or entity Foreign
Custody Manager, the Bank shall Act only upon Proper Instructions from the
Fund with regard to any of the Fund's Portfolio Securities or other assets
held or to be held outside of the United States, and the Bank shall be
without liability for any claim (as that term is defined in Section 15
hereof) arising out of maintenance of the Fund's Portfolio Securities or
other assets outside of the United States. The Fund also agrees that it
shall enter into a written Agreement with such Foreign Custody Manager that
shall obligate such foreign custody manager to provide to the Bank in a
timely manner all information required by the Bank in order to complete its
obligations hereunder. The Bank shall not be liable for any claim arising
out of the failure of such Foreign Custody Manager to provide such
information to the Bank.
(b) Segregation of Securities. The Bank shall identify on its books
-------------------------
as belonging to the Fund the foreign Portfolio Securities held by each foreign
sub-custodian (each an "Eligible Foreign Custodian") selected by the Foreign
Custody Manager, subject to receipt by the Bank of the necessary information
from such Eligible Foreign Custodian if the Foreign Custody Manager is not the
Bank.
(c) Access of Independent Accountants of the Fund. If the Bank is the
---------------------------------------------
Fund's Foreign Custody Manager, upon request of the Fund, the Bank will use its
best efforts to arrange for the independent accountants of the Fund to be
afforded access to the books and records of any foreign Banking institution
employed as an Eligible Foreign Custodian insofar as such books and records
relate to the performance of such foreign Banking institution with regard to the
Fund's Portfolio Securities and other assets.
(d) Reports by Bank. If the Bank is the Fund's Foreign Custody
---------------
Manager, the Bank will supply to the Fund the reports required under the
Delegation Agreement.
(e) Transactions in Foreign Custody Account. Transactions with
---------------------------------------
respect to the assets of the Fund held by an Eligible Foreign Custodian shall be
effected pursuant to Proper Instructions from the Fund to the Bank and shall be
effected in accordance with the applicable Agreement between the Foreign Custody
Manager and such Eligible Foreign Custodian. if at any time any Foreign
Portfolio Securities shall be registered in the name of the
nominee of the eligible foreign custodian, the Fund agrees to hold any such
nominee harmless from any liability by reason of the registration of such
Securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for Foreign Portfolio Securities received for the Account
of the Fund and delivery of Foreign Portfolio Securities maintained for the
Account of the Fund may be effected in accordance with the customary established
Securities trading or Securities processing prActices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering Securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Securities from such purchaser
or dealer.
In connection with any Action to be taken with respect to the Foreign
Portfolio Securities held hereunder, including, without limitation, the exercise
of any voting rights, subscription rights, redemption rights, Exchange rights,
conversion rights or tender rights, or any other Action in connection with any
other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank by the
Eligible Foreign Custodian, and shall promptly forward to the applicable
Eligible Foreign Custodian any instructions, forms or certifications with
respect to such Rights, and any instructions relating to the Actions to be taken
in connection therewith, as the Bank shall receive from the Fund pursuant to
Proper Instructions. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the determination of
whether any Action proposed to be taken with respect to such Rights by the Fund
or by the applicable Eligible Foreign Custodian will comply with all applicable
terms and conditions of any such Rights or any applicable laws or regulations,
or market practices within the market in which such Action is to be taken or
omitted.
(f) Tax Law. The Bank shall have no responsibility or liability for
-------
any obligations now or hereafter imposed on the Fund or the Bank as custodian of
the Fund by the tax laws of any jurisdiction, and it shall be the responsibility
of the Fund to notify the Bank of the obligations imposed on the Fund or the
Bank as the custodian of the Fund by the tax law of any non-U.S. jurisdiction,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Eligible Foreign Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any claim
for exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.
14.5 Fees and Expenses of the Bank. The Fund will pay or reimburse
-----------------------------
the Bank from time to time for any transfer taxes payable upon transfer of
Portfolio Securities
made hereunder, and for all necessary proper disbursements, expenses and charges
made or incurred by the Bank in the performance of this Agreement (including any
duties listed on any schedule hereto, if any) including any indemnities for any
loss, liabilities or expense to the Bank as provided above. for the services
rendered by the Bank hereunder, the Fund will pay to the Bank such compensation
or fees at such rate and at such times as set forth in appendix b hereto. The
Bank will also be entitled to reimbursement by the Fund for all reasonable
expenses incurred in conjunction with termination of this Agreement.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
--------------------
advance Funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. should such a payment or payments, with advanced
Funds, result in an overdraft (due to insufficiencies of the Fund's Account with
the Bank, or for any other reason) This Agreement deems any such overdraft or
related indebtedness a loan made by the Bank to the Fund payable on demand.
Such overdraft shall bear interest at the current rate charged by the Bank for
such loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
Security interest to the extent of any overdraft or indebtedness or to the
extent required by law, whichever is greater, in and to any property at any time
held by it for the Fund's benefit or in which the Fund has an interest and which
is then in the Bank's possession or control (or in the possession or control of
any third party Acting on the Bank's behalf). The Fund authorizes the Bank, in
the Bank's sole discretion, at any time to charge any overdraft or indebtedness,
together with interest due thereon, against any balance of Account standing to
the credit of the Fund on the Bank's books.
15. Limitation of Liability.
-----------------------
15.1 Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Bank and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "claim") arising as
a result of any Act or omission of the Bank or any Indemnified Party under this
Agreement, except for any claim resulting from the negligence, willful
misfeasance or bad faith of the Bank or any Indemnified Party. Without limiting
the foregoing, neither the Bank nor the Indemnified Parties shall be liable for,
and the Bank and the Indemnified Parties shall be indemnified against, any Claim
arising as a result of:
(a) Any Act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, telegram, telecopier, notice,
request, Certificate or other instrument reasonably believed by the Bank to
genuine;
(b) Any Act or omission of any subcustodian selected by or at the
direction of the Fund;
(c) Any Act or omission of any Foreign Custody Manager other than the
Bank or any Act or omission of any Eligible Foreign Custodian if the Bank is not
the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not been
registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which the Bank has
not received Proper Instructions or obtained Actual possession of all necessary
Securities, consents or other materials by 5:00 p.m. on the date specified as
the response deadline;
(f) Any Act or omission of any European branch of a U.S. Banking
institution that is the Issuer of eurodollar CDs in connection with any
eurodollar CDs held by such European branch;
(g) information relied on in good faith by the Bank and supplied by
any Authorized Person in connection with the calculation of (i) The net asset
value and public offering price of the shares of the Fund or (ii) The Yield
Calculation; or
(h) Any acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, Acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software) and
computer facilities, the unavailability of energy sources and other similar
happenings or events, provided that the Bank has taken reasonable steps to
protect against potential disruption caused by the foregoing.
15.2 Notwithstanding anything to the contrary in this Agreement, in
no event shall the Bank or the indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any Activities hereunder.
16. Termination.
-----------
16.1 The term of this Agreement shall be one year commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
after the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive one-year terms (each a "Renewal Term") unless
notice of non-renewal is delivered by the non-renewing party to the other party
no later than sixty days prior to the expiration of the Initial Term or any
Renewal Term, as the case may be.
(a) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the non-violating party
gives written notice of such violation to the violating party and the violating
party does not cure such violation within 60 days of receipt of such notice.
(b) Either party may terminate this Agreement during any renewal term
upon sixty days written notice to the other party. any termination pursuant to
this paragraph 16.1(b) shall be effective upon expiration of such sixty days,
provided, however, that the effective date of such termination may be postponed
to a date not more than one hundred twenty days after delivery of the written
notice: (i) at the request of the Bank, in order to prepare for the transfer by
the Bank of all of the assets of the Fund held hereunder; or (ii) at the request
of the Fund, in order to give the Fund an opportunity to make suitable
arrangements for a successor custodian.
16.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. if
the Fund does not select a successor custodian within sixty (60) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subSection 16.3, deliver the Portfolio Securities and cash of the
Fund held by the Bank to a Bank or trust company of the Bank's own selection
which meets the requirements of Section 17(f)(1) of the 1940 Act and has a
reported capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held as the property of the Fund under terms similar to those
on which they were held by the Bank, whereupon such Bank or trust company so
selected by the Bank will become the successor custodian of such assets of the
Fund with the same effect as though selected by the Board. Thereafter, the Bank
shall be released from any and all obligations under this Agreement.
16.3 Prior to the expiration of sixty (60) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to Act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
in that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which Action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfActory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
17. Confidentiality. Both parties hereto agree than any non-public
---------------
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency. The
parties further agree that a breach of this provision would irreparably damage
the other party and accordingly agree that each of them is entitled, in addition
to all other remedies at law or in equity to an injunction or injunctions
without bond or other Security to prevent breaches of this provision.
18. Notices. Any notice or other instrument in writing Authorized or
-------
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) United
States Postal Service registered mail, (ii) Telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office at
the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
Xxxxxx Series Trust
000 Xxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxx
With a copy to: Xxxxx Xxxx
(b) in the case of notices sent to the Bank to:
Investors Bank & Trust Company
000 xxxxxxxxx xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx, Director - Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time designate
in writing.
19. Amendments. This Agreement may not be altered or amended, except
----------
by an instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to
-------
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, Authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 16 hereof will not be deemed to
be an assignment within the meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will
-------------
be governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
22. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
23. Entire Agreement. This Agreement, together with its Appendices,
----------------
constitutes the sole and entire Agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior Agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations
-----------------------
assumed by the Fund hereunder shall be limited in all cases to the assets of the
Fund and that the Bank shall not seek satisfAction of any such obligation from
the officers, agents, employees, trustees, or shareholders of the Fund.
25. Several Obligations of the Portfolios. This Agreement is an
-------------------------------------
Agreement entered into between the Bank and the Fund with respect to each
Portfolio. With respect to any obligation of the Fund on behalf of any
Portfolio arising out of this Agreement, the Bank shall look for payment or
satisfaction of such obligation solely to the assets of the Portfolio to which
such obligation relates as though the Bank had separately contrActed with the
Fund by separate written instrument with respect to each Portfolio.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly Authorized as of the day
and year first written above.
XXXXXX SERIES TRUST
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Director, Client Management
Appendices
----------
Appendix A.............................................. Series or Portfolios
Appendix B.............................................. Fee Schedule
Appendix C.............................................. Additional Services
Appendix A
----------
Xxxxxx Money Market Fund
Appendix B
----------
Xxxxxx Series Trust
Annual Fee Schedule
For One Money Market Fund - 2 Classes
September 1, 1998
================================================================================
Fund Accounting, Custody and Calculation of N.A.V., Transfer Agency, Fund
Administration, Financial Statement Preparation and Blue Sky
================================================================================
A. FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
-------------------------------------------------------------------------
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
------------------------------------------------------------
The Annual Fee for Fund Accounting, Custody and Calculation of N.A.V.,
Transfer Agency, Fund Administration, Financial Statement Preparation and
Blue Sky for the one (1) Xxxxxx Money Market Fund (including two classes)
will be charged according to the following schedule. The following schedule
is exclusive of transaction costs and out-of-pocket expenses.
ANNUAL FEE
----------
Annual Fee per Fund $70,000
For each additional class added beyond the first two classes there will be
an annual fee of $28,000 for the above services.
Blue Sky services, which are to be billed separately from the above, will
be billed at an annual rate of $100.00 per permit filed.
B. TRANSACTION COSTS PER TRANSACTION
----------------- ---------------------
incoming wires 5.00
outgoing wires 7.00
================================================================================
MISCELLANEOUS
================================================================================
A. OUT-OF-POCKET
-------------
- These charges consist of:
- Telephone
- Ad Hoc reporting
- TA - Non-current Day Inquiry ($1.00 per inquiry)
- Third Party Review
- Forms and Supplies
- Printing/Postage/Delivery
- Systems Development/Reports/Transmissions
- Equipment Rental
- Legal costs associated with substantial alterations of IBT's standard
Agreements
B. BALANCE CREDITS
---------------
We allow use of balance credit against fees (excluding out-of-pocket
charges) for collected Fund balances arising out of the custody
relationship. The monthly earnings allowance is equal to 75% of the 90-day
T-xxxx rate.
C. SYSTEMS
-------
The details of any Systems work required to service this Fund will be
determined after a thorough business analysis. all Systems work, including
creating customized reports and establishing Systems/communications
interfaces with Xxxxxx, other providers, etc., will be billed on a time and
materials basis.
D. OTHER ASSUMPTIONS
-----------------
The fee schedule assumes that there will be two (2) classes of shares.
Also, this schedule reflects the fAct that the Fund will not declare a
daily distribution, but will distribute monthly or annually only. increases
in the number of classes or any change in the frequency of distributions
will result in an increase in the fees noted above.
This fee schedule does not reflect the impAct, if any, on ibt's processing
transactions using Fundserve or other nscc applications. the fees
associated with such applications and any related Systems development costs
will be determined at a later date prior to implementation.
The above fees will be charged against the Funds' custodian checking
Account five business days after the invoice is mailed to the Fund.
This annual fee schedule is valid for 30 days and assumes the execution of
IBT's standard contrActual Agreements for a minimum term of one (1) year.
All charges will be billed monthly. The fee schedule will be effective upon
start-up of the Fund.
Appendix C
----------
