EXHIBIT (3)(a)
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FORM OF
CUSTODIAN AGREEMENT
3/99
NON-ERISA
W/O RE
CUSTODY AGREEMENT
by and between
AUSA Endeavor Target Account
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and
BOSTON SAFE DEPOSIT AND TRUST COMPANY
TABLE OF CONTENTS
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SECTION PAGE
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1. Establishment of/Additions to Account.....................................1
2. Distributions.............................................................1
3. Authorized Parties........................................................1
4. Authorized Instructions...................................................2
5. Directed Powers of Custodian..............................................2
6. Discretionary Powers of Custodian.........................................3
7. Duties of Custodian.......................................................4
8. Contractual Income and Settlement.........................................5
9. Tax Law...................................................................5
10. Non-Account Assets........................................................5
11. Reporting and Recordkeeping...............................................6
12. Standard of Care..........................................................6
13. Force Majeure.............................................................6
14. Compensation and Expenses.................................................7
15. Indemnification...........................................................7
16. Amendment or Termination..................................................7
17. Governing Law and Legal Proceedings.......................................7
18. Representations...........................................................7
19. Necessary Parties.........................................................8
20. Execution in Counterparts.................................................8
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION.................................10
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT made as of July 1, 1999 ("Agreement") by and between
AUSA Endeavor Target Account organized under the laws of the State of New York
("Client") and Boston Safe Deposit and Trust Company, a Massachusetts trust
company ("Custodian").
WITNESSETH:
WHEREAS, the Client and the Custodian desire to establish a custody account
to provide for the safekeeping and recordkeeping of certain property of the
Client;
NOW, THEREFORE, the Client and the Custodian, each intending to be legally
bound, agree as follows:
1. Establishment of/Additions to Account
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The Client hereby appoints Boston Safe Deposit and Trust Company as
Custodian for any property acceptable to the Custodian which the Client may
deposit to the Custodian's care ("Account"). The Custodian shall have no
responsibility for any property until it in fact is received by the Custodian or
its agents or subcustodians. "Property" as used herein shall not include any
direct interest in real property, leaseholds or mineral interests.
2. Distributions
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The Custodian shall make distributions or transfers out of the Account
pursuant to Authorized Instructions, as defined below. In making payments to
service providers pursuant to Authorized Instructions, the Client acknowledges
that the Custodian is acting as a paying agent, and not as the payor, for tax
information reporting and withholding purposes.
3. Authorized Parties
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The Client shall furnish the Custodian with a written list of the names and
signatures of all persons authorized to direct the Custodian on behalf of the
Client under the terms of this Agreement. In addition, the Client may appoint
and remove one or more investment managers ("Investment Manager") for such
portion of the Account as the Client shall designate to the Custodian in
writing. The Investment Manager shall furnish the Custodian with a written list
of the names and signatures of the person or persons who are authorized to
represent the Investment Manager in dealings with the Custodian. The
Custodian shall be entitled to deal with any person or entity so identified by
the Client or Investment Manager ("Authorized Party or Authorized Parties")
until notified otherwise in writing. The Custodian shall be under no duty to
question any direction of an Authorized Party with respect to the portion of the
Account over which such Authorized Party has authority, to review any Property
held in the Account, to make any suggestions with respect to the investment and
reinvestment of the assets in the Account, or to evaluate or question the
performance of any Authorized Party. The Custodian shall not be responsible or
liable for any diminution of value of any securities or other property held by
the Custodian (or its subcustodians).
4. Authorized Instructions
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All directions and instructions to the Custodian from an Authorized Party
shall be in writing, by facsimile transmission, electronic transmission, or any
other method specifically agreed to in writing by the Client and the Custodian,
provided the Custodian may, in its discretion, accept oral directions and
instructions and may require confirmation in writing. The Custodian shall be
fully protected in acting in accordance with all such directions and
instructions ("Authorized Instructions") which it reasonably believes to have
been given by an Authorized Party or in failing to act in the absence thereof.
5. Directed Powers of Custodian
----------------------------
The Custodian shall have and exercise the following powers and authority in
the administration of the Account upon the direction of an Authorized Party:
a. Settle purchases and sales and engage in other transactions, including
free receipts and deliveries, exchanges and other voluntary corporate actions,
with respect to securities or other property received by the Custodian;
b. Execute proxies for any stocks, bonds or other securities held in the
Account;
c. Lend the assets of the Account in accordance with the terms and
conditions of a separate securities lending agreement; and
d. Take any and all actions necessary to settle transactions in futures
and/or options contracts, short-selling programs, foreign exchange or foreign
exchange contracts, swaps and other derivative investments.
Settlements of transactions may be effected in trading and processing
practices customary in the jurisdiction or market where the transaction occurs.
The Client acknowledges that this may, in certain circumstances, require the
delivery of cash or securities (or other property) without the concurrent
receipt of securities (or other property) or cash and, in such circumstances,
the Client shall have responsibility for
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nondelivery of securities or other property (or late delivery) or nonreceipt of
payment (or late payment) by the counterparty.
6. Discretionary Powers of Custodian
---------------------------------
The Custodian shall have and exercise the following powers and authority in
the administration of the Account:
a. Appoint sub-custodians (including a corporate affiliate of the
Custodian), domestic or foreign, as to part or all of the Account;
b. Hold property in nominee name, in bearer form or in book entry form, in
a clearinghouse corporation or in a depository, so long as the Custodian's
records clearly indicate that the assets held are a part of the Account;
c. Commence or defend suits or legal proceedings and represent the Account
in all suits or legal proceedings in any court or before any other body or
tribunal as the Custodian shall deem necessary to protect the Account;
d. Employ suitable agents and legal counsel, who may be counsel for the
Client, and, as a part of its reimbursable expenses under this Agreement, pay
their reasonable compensation and expenses. The Custodian shall be entitled to
rely on and may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice;
e. Take all action necessary to pay for authorized transactions, including
exercising the power to borrow or raise monies from the Custodian in its
corporate capacity or an affiliate of the Custodian and shall hold any property
in the Account as security for advances made to the Account for any such
authorized transactions, including disbursements or expenses, or the purchase or
sale of foreign exchange, or of contracts for foreign exchange. The Custodian
shall be entitled to collect from the Account sufficient cash for reimbursement,
and if such cash is insufficient, dispose of the assets of the Account to the
extent necessary to obtain reimbursement;
f. Make, execute and deliver any and all documents, agreements or other
instruments in writing as is necessary or desirable for the accomplishment of
any of the powers in this Agreement; and
g. Generally take all action, whether or not expressly authorized, which
the Custodian may deem necessary or desirable for the fulfillment of its duties
hereunder.
The powers described in this Section 6 may be exercised by the Custodian
with or without Authorized Instructions, but where the Custodian acts on
Authorized Instructions, the Custodian shall be fully protected as described in
Section 4. Without limiting the
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generality of the foregoing, the Custodian shall not be liable for the acts or
omissions of any subcustodian appointed under paragraph (a) of this Section 6
pursuant to Authorized Instructions including, but not limited to, any broker-
dealer or other entity designated by the Client or Investment Manager to hold
any property of the Account as collateral or otherwise pursuant to investment
strategy.
7. Duties of Custodian
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The Custodian shall perform or cause its agents or subcustodians to perform
the following duties with respect to the Account:
a. Hold the property in safekeeping facilities of the Custodian or of
other custodian banks or clearing corporations, in the United States or
elsewhere; provided that the Custodian shall not be responsible for any losses
resulting from the deposit or maintenance of securities or other property (in
accordance with market practice, custom, or regulation) with any recognized
foreign or domestic clearing facility, book-entry system, centralized custodial
depository, or similar organization;
b. Collect all income payable to and all distributions due to the Account
and sign on the Account's behalf all declarations, affidavits, and certificates
of ownership required to collect income and principal payments; provided that
the Custodian shall not be responsible for the failure to receive payment of (or
late payment of) distributions with respect to securities or other property held
in the Account;
c. Subject to the timely receipt of notice from an issuer or Authorized
Party, collect all proceeds from securities, certificates of deposit or other
investments which may mature or be called;
d. Submit or cause to be submitted to the Client or the Investment
Manager, as designated by the Client, information actually received by the
Custodian regarding ownership rights pertaining to property held in the Account;
e. Attend to involuntary corporate actions;
f. Determine the fair market value of the Account as of such dates as the
Client and the Custodian may agree upon, in accordance with methods consistently
followed and uniformly applied. In determining fair market value of the Account,
the Custodian shall be protected in relying on values recommended by an
Authorized Party; and
g. Render periodic statements for property held hereunder.
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8. Contractual Income and Settlement
---------------------------------
a. Contractual Income. The Custodian shall credit the Account with income
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and maturity proceeds on securities on contractual payment date net of any taxes
or upon actual receipt as agreed between the Custodian and the Client. To the
extent the Client and the Custodian have agreed to credit income on contractual
payment date, the Custodian may reverse such accounting entries with back value
to the contractual payment date if the Custodian reasonably believes that it
will not receive such amount.
b. Contractual Settlement. The Custodian will attend to the settlement of
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securities transactions on the basis of either contractual settlement date
accounting or actual settlement date accounting as agreed between the Client and
the Custodian. To the extent the Client and the Custodian have agreed to settle
certain securities transactions on the basis of contractual settlement date
accounting, the Custodian may reverse with back value to the contractual
settlement date any entry relating to such contractual settlement where the
related transaction remains unsettled in accordance with established procedures.
9. Tax Law
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a. The Custodian shall use reasonable efforts to assist the Authorized
Party, to the extent the Authorized Party has provided necessary information,
with respect to any tax obligations, including responsibility for taxes,
withholding, certification and reporting requirements, claims for exemptions or
refund, interest, penalties and other expenses ("Tax Obligations"). The Client
shall cause the Authorized Party to notify the Custodian in writing of any such
Tax Obligations. The Custodian shall have no responsibility or liability for any
Tax Obligations now or hereafter imposed on the Client or the Account by any
taxing authorities, domestic or foreign.
b. To the extent the Custodian is responsible under any applicable law for
any Tax Obligation, the Client shall cause the Authorized Party to inform the
Custodian of all Tax Obligations, shall direct the Custodian with respect to the
performance of such Tax Obligations and shall provide the Custodian with the
necessary funds and all information required by the Custodian to meet such Tax
Obligations.
10. Non-Account Assets
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The Client may request the Custodian to perform a recordkeeping function
with respect to property held by others and not otherwise subject to the terms
of this Agreement. To the extent the Custodian shall agree to perform this
service, its sole responsibility shall be to accurately reflect information on
its books which it has received from an Authorized Party.
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11. Reporting and Recordkeeping
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If, within ninety (90) days after the Custodian mails to the Client a
statement with respect to the Account, the Client has not given the Custodian
written notice of any exception or objection thereto, the statement shall be
deemed to have been approved, and in such case, the Custodian shall not be
liable for any matters in such statements. The Client shall have the right, at
its own expense and with prior written notice to the Custodian, to inspect the
Custodian's books and records directly relating to the Account during normal
business hours or to designate an accountant to make such inspection.
12. Standard of Care
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In performing its duties under this Agreement, the Custodian shall
exercise the same care and diligence that it would devote to its own property in
like circumstances. The duties of the Custodian shall only be those specifically
undertaken pursuant to this Agreement. The Custodian shall not be responsible or
liable for any losses or damages suffered by the Client arising as a result of
the insolvency of any subcustodian, except to the extent the Custodian was
negligent in its selection or continued retention of such subcustodian.
The Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, direction, instruction, consent, certification or
other instrument believed by it to be genuine and delivered by an Authorized
Party. The Custodian shall not be liable for any act or omission of any other
person in carrying out any responsibility imposed upon such person and under no
circumstances shall the Custodian be liable for any indirect, consequential or
special damages with respect to the role as Custodian.
13. Force Majeure
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Notwithstanding anything in this Agreement to the contrary contained
herein, the Custodian shall not be responsible or liable for its failure to
perform under this Agreement or for any losses to the Account resulting from any
event beyond the reasonable control of the Custodian, its agents or
subcustodians, including but not limited to nationalization, strikes,
expropriation, devaluation, seizure, or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, levies or other charges affecting the Account's property; or
the breakdown, failure or malfunction of any utilities or telecommunications
systems; or any order or regulation of any banking or securities industry
including changes in market rules and market conditions affecting the execution
or settlement of transactions; or acts of war, terrorism, insurrection or
revolution; or acts of God; or any other similar event. This Section shall
survive the termination of this Agreement.
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14. Compensation and Expenses
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The Custodian shall be entitled to compensation for services under this
Agreement as mutually agreed. The Client acknowledges that, as part of the
Custodian' s compensation, the Custodian may earn interest on balances,
including disbursement balances and balances arising from purchase and sale
transactions. The Custodian shall also be entitled to reimbursement for
reasonable expenses incurred by it in the discharge of its duties under this
Agreement. The Custodian is authorized to charge and collect from the Account
any and all fees and expenses earned unless such fees and expenses are paid
directly by the Client. To the extent the Custodian advances funds to the
Account for disbursements or to effect the settlement of purchase transactions,
the Custodian shall be entitled to collect from the Account either (i) with
respect to domestic assets, an amount equal to what would have been earned on
the sums advanced (an amount approximating the "federal funds" interest rate) or
(ii) with respect to non-domestic assets, the rate applicable to the appropriate
foreign market.
15. Indemnification
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The Client shall indemnify and hold harmless the Custodian from all
liability and expense, including reasonable counsel fees and expenses, arising
out of the performance of its obligations under this Agreement, except as a
result of the Custodian's own negligence or willful misconduct. This
indemnification shall survive the termination of this Agreement.
16. Amendment or Termination
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This Agreement may be amended by written agreement of the Client and the
Custodian and may be terminated by either party upon ninety (90) days' notice in
writing to the other party.
17. Governing Law and Legal Proceedings
-----------------------------------
This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts. The parties hereby expressly waive,
to the full extent permitted by applicable law, any right to trial by jury with
respect to any judicial proceeding arising from or related to this Agreement.
18. Representations
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The Client and the Custodian hereby each represent and warrant to the
other that it has full authority to enter into this Agreement upon the terms and
conditions hereof and that the individual executing this Agreement on its behalf
has the requisite authority to bind the Client or the Custodian to this
Agreement.
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19. Necessary Parties
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All of the understandings, agreements, representations and warranties
contained herein are solely for the benefit of the Client and the Custodian and
there are no other parties who are intended to be benefited, in any way
whatsoever, by this Agreement.
20. Execution in Counterparts
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This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument and may be sufficiently evidenced by one
counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
Authorized Signer of: Authorized Officer of:
AUSA Endeavor Target Account BOSTON SAFE DEPOSIT
---------------------------- AND TRUST COMPANY
(Client)
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
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Address for Notice: Address for Notice:
---------------------------- One Cabot Road
---------------------------- Xxxxxxx, XX 00000
---------------------------- Attention:
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Taxable:
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or
Tax Exempt:
(Under IRC Section: )
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----------------------------
Fiscal Year
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TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
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By signing below the Client hereby certifies under penalties of perjury that the
taxpayer identification number provided below is correct and that the Client is
not subject to back-up withholding on reportable payments credited to the
Client's Account by the Custodian. The Client may not be subject to back-up
withholding either because (a) the Client is exempt from back-up withholding
because it is an "exempt recipient", (b) the Client has not been notified by the
Internal Revenue Service that it is subject to back-up withholding for failure
to report all interest or dividends, or (c) the IRS has notified the Client that
it is no longer subject to back-up withholding. (If (a), (b), or (c) do not
apply, please cross out.) Failure to sign below and provide a valid taxpayer
identification number may require that the Custodian apply federal income tax
withholding at the rate of 31% (or the rate as required by law) on all
reportable payments made to the Account established under this Agreement.
The Internal Revenue Service does not require your consent to any provision
of this document other than the certifications required to avoid backup
withholding.
AUSA Endeavor Target Account
----------------------------
(Client)
By:
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Name:
Title:
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Taxpayer Identification Number
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