SUCH GRANTS SHALL HAVE A FIRST PRIORITY SUBJECT TO NO SETOFFS,
COUNTERCLAIMS, OR OTHER LIENS OR GRANTS PRIOR TO OR ON A PARITY THEREWITH, AND
IT SHALL TAKE SUCH ADDITIONAL STEPS AS CUSTODIAN MAY REQUIRE TO ASSURE SUCH
PRIORITY.
3.
THE CORPORATION HEREBY COVENANTS THAT IT SHALL FROM TIME TO TIME COMPLETE
AND EXECUTE AND DELIVER TO CUSTODIAN UPON CUSTODIAN'S REQUEST A FORM FR U-1 (OR
SUCCESSOR FORM) WHENEVER THE CORPORATION BORROWS FROM CUSTODIAN ANY MONEY TO BE
USED FOR THE PURCHASE OR CARRYING OF MARGIN STOCK AS DEFINED IN FEDERAL RESERVE
REGULATION U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1.
(A)
SUBJECT TO THE TERMS HEREOF, THE CORPORATION HEREBY AUTHORIZES
CUSTODIAN TO HOLD ANY SECURITIES RECEIVED BY IT FROM TIME TO TIME FOR THE
CORPORATION'S ACCOUNT.
CUSTODIAN SHALL BE ENTITLED TO UTILIZE, SUBJECT TO
SUBSECTION (C) OF THIS SECTION 1, DEPOSITORIES, SUBCUSTODIANS, AND, SUBJECT TO
SUBSECTION (D) OF THIS SECTION 1, FOREIGN DEPOSITORIES, TO THE EXTENT POSSIBLE
IN CONNECTION WITH ITS PERFORMANCE HEREUNDER.
SECURITIES AND CASH HELD IN A
DEPOSITORY OR FOREIGN DEPOSITORY WILL BE HELD SUBJECT TO THE RULES, TERMS AND
CONDITIONS OF SUCH ENTITY.
SECURITIES AND CASH HELD THROUGH SUBCUSTODIANS SHALL
BE HELD SUBJECT TO THE TERMS AND CONDITIONS OF CUSTODIAN'S AGREEMENTS WITH SUCH
SUBCUSTODIANS.
SUBCUSTODIANS MAY BE AUTHORIZED TO HOLD SECURITIES IN FOREIGN
DEPOSITORIES IN WHICH SUCH SUBCUSTODIANS PARTICIPATE.
UNLESS OTHERWISE REQUIRED
BY LOCAL LAW OR PRACTICE OR A PARTICULAR SUBCUSTODIAN AGREEMENT, SECURITIES
DEPOSITED WITH A SUBCUSTODIAN, A DEPOSITARY OR A FOREIGN DEPOSITORY WILL BE HELD
IN A COMMINGLED ACCOUNT, IN THE NAME OF CUSTODIAN, HOLDING ONLY SECURITIES HELD
BY CUSTODIAN AS CUSTODIAN FOR ITS CUSTOMERS.
CUSTODIAN SHALL IDENTIFY ON ITS
BOOKS AND RECORDS THE SECURITIES AND CASH BELONGING TO THE CORPORATION, WHETHER
HELD DIRECTLY OR INDIRECTLY THROUGH DEPOSITORIES, FOREIGN DEPOSITORIES, OR
4
SUBCUSTODIANS.
CUSTODIAN SHALL, DIRECTLY OR INDIRECTLY THROUGH SUBCUSTODIANS,
DEPOSITORIES, OR FOREIGN DEPOSITORIES, ENDEAVOR, TO THE EXTENT FEASIBLE, TO HOLD
SECURITIES IN THE COUNTRY OR OTHER JURISDICTION IN WHICH THE PRINCIPAL TRADING
MARKET FOR SUCH SECURITIES IS LOCATED, WHERE SUCH SECURITIES ARE TO BE PRESENTED
FOR CANCELLATION AND/OR PAYMENT AND/OR REGISTRATION, OR WHERE SUCH SECURITIES
ARE ACQUIRED.
CUSTODIAN AT ANY TIME MAY CEASE UTILIZING ANY SUBCUSTODIAN AND/OR
MAY REPLACE A SUBCUSTODIAN WITH A DIFFERENT SUBCUSTODIAN (THE "REPLACEMENT
SUBCUSTODIAN").
IN THE EVENT CUSTODIAN SELECTS A REPLACEMENT SUBCUSTODIAN,
CUSTODIAN SHALL NOT UTILIZE SUCH REPLACEMENT SUBCUSTODIAN UNTIL AFTER THE
CORPORATION'S BOARD OR FOREIGN CUSTODY MANAGER HAS DETERMINED THAT UTILIZATION
OF SUCH REPLACEMENT SUBCUSTODIAN SATISFIES THE REQUIREMENTS OF THE '40 ACT AND
RULE 17F-5 THEREUNDER.
(B)
UNLESS CUSTODIAN HAS RECEIVED A CERTIFICATE OR INSTRUCTIONS TO THE
CONTRARY, CUSTODIAN SHALL HOLD SECURITIES INDIRECTLY THROUGH A SUBCUSTODIAN ONLY
IF (I) THE SECURITIES ARE NOT SUBJECT TO ANY RIGHT, CHARGE, SECURITY INTEREST,
LIEN OR CLAIM OF ANY KIND IN FAVOR OF SUCH SUBCUSTODIAN OR ITS CREDITORS OR
OPERATORS, INCLUDING A RECEIVER OR TRUSTEE IN BANKRUPTCY OR SIMILAR AUTHORITY,
EXCEPT FOR A CLAIM OF PAYMENT FOR THE SAFE CUSTODY OR ADMINISTRATION OF
SECURITIES ON BEHALF OF THE CORPORATION BY SUCH SUBCUSTODIAN,