Exhibit 24(b)(8)
CUSTODIAN CONTRACT
Between
QUEST FOR VALUE FAMILY OF FUNDS
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 3
2.3 Registration of Securities 8
2.4 Bank Accounts 9
2.5 Payments for Shares 10
2.6 Availability of Federal Funds 10
2.7 Collection of Income 10
2.8 Payment of Fund Monies 11
2.9 Liability for Payment in Advance of Receipt
of Securities Purchased 14
2.10 Payments for Repurchases or Redemptions of
Shares of the Fund 15
2.11 Appointment of Agents 15
2.12 Deposit of Fund Assets in Securities System 16
2.12A Fund Assets Held in the Custodian's Direct
Paper System 19
2.13 Segregated Account 21
2.14 Ownership Certificates for Tax Purposes 22
2.15 Proxies 22
2.16 Communications Relating to Portfolio Securities 23
2.17 Proper Instructions 23
2.18 Actions Permitted Without Express Authority 24
2.19 Evidence of Authority 25
3. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income 26
4. Records 26
5. Opinion of Fund's Independent Accountants 27
6. Reports to Fund by Independent Public Accountants 27
7. Compensation of Custodian 28
8. Responsibility of Custodian 28
9. Effective Period, Termination and Amendment 30
10. Successor Custodian 31
11. Interpretive and Additional Provisions 33
12. Additional Funds 33
13. Massachusetts Law to Apply 34
14. Prior Contracts 34
CUSTODIAN CONTRACT
This Contract between Quest For Value Family of Funds, a
business trust organized and existing under the laws of
Massachusetts, having its principal place of business at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, hereinafter called the
"Fund," and State Street Bank and Trust Company, a Massachusetts
trust company, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, hereinafter called
the "Custodian,"
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate
series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Fund intends to initially offer shares in four
series, the Asset Allocation Portfolio, U.S. Government High Income
Portfolio, Fixed Income Portfolio, and Small Capitalization
Portfolio (such series together with all other series subsequently
established by the Fund and made subject to this Contract in
accordance with paragraph 12, being herein referred to as the
"Portfolio(s)");
NOW THEREFOR, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as
follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of
the assets of the Portfolios of the Fund pursuant to the provisions
of the Declaration of Trust. The Fund on behalf of the
Portfolio(s) agrees to deliver to the Custodian all securities and
cash of the Portfolios, and all payments of income, payments of
principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares
of beneficial interest of the Fund representing interests in the
Portfolios, ("Shares") as may be issued or sold from time to time.
The Custodian shall not be responsible for any property of a
Portfolio or received by the Portfolio and not delivered to the
Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Section 2.17), the Custodian shall on behalf of the applicable
Portfolio(s) from time to time employ one or more sub-custodians,
but only in accordance with an applicable vote by the Board of
Trustees of the Fund on behalf of the applicable Portfolio(s), and
provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any actions
or omissions of any sub-custodian so employed than any such sub-
custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund
Held By the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio including all
domestic securities owned by the Fund, other than (a)
securities which are maintained pursuant to Section 2.12 in
a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of
the Treasury, collectively referred to herein as "Securities
System" and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and
paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian
pursuant to Section 2.12A.
2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by a Portfolio held by the
Custodian or in a Securities System account of the Custodian
or in the Custodian's Direct Paper book entry system account
("Direct Paper System Account") only upon receipt of Proper
Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Portfolio;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section
2.12 hereof;
4) To the depository agent in connection with tender or
other similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided that, in any such case, the
cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer
into the name of the Portfolio or into the name of
any nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed pursuant
to Section 2.11 or into the name or nominee name of
any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided
that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of
the Portfolio, to the broker or its clearing agent,
against a receipt, for examination in accordance with
"street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or
liability for any loss arising from the delivery of
such securities prior to receiving payment for such
securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities
and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of
such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities
for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of
securities made by the Portfolio, but only against
receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund on behalf
of the Portfolio, which may be in the form of cash or
obligations issued by the United States government,
its agencies or instrumentalities, except that in
connection with any loans for which collateral is to
be credited to the Custodian's account in the book-
entry system authorized by the U.S. Department of the
Treasury, the Custodian will not be held liable or
responsible for the delivery of securities owned by
the Portfolio prior to the receipt of such
collateral;
11) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf of
the Portfolio, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio,
the Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or
organizations, regarding escrow or other arrangements
in connection with transactions by the Portfolio of
the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio,
the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating
to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding
account deposits in connection with transactions by
the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be
described from time to time in the currently
effective prospectus and statement of additional
information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from
the Fund on behalf of the applicable Portfolio, a
certified copy of a resolution of the Board of
Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or
an Assistant Secretary, specifying the securities of
the Portfolio to be delivered, setting forth the
purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered
in the name of the Portfolio or in the name of any nominee
of the Fund on behalf of the Portfolio or of any nominee of
the Custodian which nominee shall be assigned exclusively to
the Portfolio, unless the Fund has authorized in writing the
appointment of a nominee to be used in common with other
registered investment companies having the same investment
adviser as the Portfolio, or in the name or nominee name of
any agent appointed pursuant to Section 2.11 or in the name
or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on
behalf of the Portfolio under the terms of this Contract
shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain
securities in "street name" or other good delivery form.
If, however, the Fund directs the Custodian to maintain
securities in "street name," the Custodian shall utilize its
best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts
basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of each
Portfolio of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and
shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the
account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Portfolio may
be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or
trust company and the funds to be deposited with each such
bank or trust company shall on behalf of each applicable
Portfolio be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the
distributor for the Shares or from the Transfer Agent of the
Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund on
behalf of each such Portfolio and Transfer Agent of any
receipt by it of payments for Shares of such Portfolio.
2.6 Availability of Federal Funds. Upon mutual agreement
between the Fund on behalf of each applicable Portfolio and
the Custodian, the Custodian shall, upon the receipt of
Proper Instructions from the Fund on behalf of a Portfolio,
make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund
and the Custodian in the amount of checks received in
payment for Shares of such Portfolio which are deposited
into the Portfolio's account.
2.7 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all
income and other payments with respect to registered
securities held hereunder to which the each Portfolio shall
be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities
if, on the date of payment by the issuer, such securities
are held by the Custodian or its agent thereof and shall
credit such income, as collected, to such Portfolio's
custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring
presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due
each Portfolio on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility
of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to
provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the
Portfolio is properly entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper Instructions
from the Fund on behalf of the applicable Portfolio, which
may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for
the account of the Portfolio but only (a) against the
delivery of such securities or evidence of title to
such options, futures contracts or options on futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the United
States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as
a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name
of the Portfolio or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in
accordance with the conditions set forth in Section
2.12 hereof; (c) in the case of a purchase involving
the Direct Paper System, in accordance with the
conditions set forth in Section 2.12A; (d) in the
case of repurchase agreements entered into between
the Fund on behalf of the Portfolio and the
Custodian, or another bank, or a broker-dealer which
is a member of the NASD, (i) against delivery of the
securities either in certificate form or through an
entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase
by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the
Custodian to repurchase such securities from the
Portfolio or (e) for transfer to a time deposit
account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to
receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from
the Fund as defined in Section 2.17;
2) In connection with conversion, exchange or surrender
of securities owned by the Portfolio as set forth in
Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by
the Portfolio as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred
by the Portfolio, including but not limited to the
following payments for the account of the Portfolio:
interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the
Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing
documents of the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt
of, in addition to Proper Instructions from the
Fund on behalf of the Portfolio, a certified copy of
a resolution of the Board of Trustees or of the
Executive Committee of the Fund signed by an officer
of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such
payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be
a proper purpose, and naming the person or persons to
whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase
of securities for the account of the Portfolio is made by
the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions
from the Fund on behalf of the Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the
Fund for such securities to the same extent as if the
securities had been received by the Custodian.
2.10 Payments for Repurchase or Redemptions of Shares of the
Fund. From such funds as may be available for the purpose
but subject to the limitations of the Declaration of Trust
and any applicable votes of the Board of Trustees of the
Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available
for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of
their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is
authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection
with the redemption or repurchase of Shares of the Fund, the
Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as
are mutually agreed upon from time to time between the Fund
and the Custodian.
2.11 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove)
any other bank or trust company which is itself qualified
under the Investment Company Act of 1940, as amended, to act
as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time
to time direct; provided, however, that the appointment of
any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 Deposit of Securities in Securities Systems. The Custodian
may deposit and/or maintain securities owned by a Portfolio
in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, which acts as a securities depository,
or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in
a Securities System provided that such securities are
represented in an account ("Account") of the
Custodian in the Securities System which shall not
include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
a Securities System shall identify by book-entry
those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for
the account of the Portfolio upon (i) receipt of
advice from the Securities System that such
securities have been transferred to the Account, and
(ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for
the account of the Portfolio. The Custodian shall
transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the
Securities System that payment for such securities
has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of
the Portfolio. Copies of all advices from the
Securities System of transfers of domestic securities
for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request.
Upon request, the Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form
of a written advice or notice and shall furnish to
the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions
in the Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Fund for the
Portfolio with any report obtained by the Custodian
on the Securities System's accounting system,
internal accounting control and procedures for
safeguarding securities deposited in the Securities
System;
5) The Custodian shall have received from the Fund on
behalf of the Portfolio the initial or annual
certificate, as the case may be, required by Article
9 hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Fund for the benefit of the Portfolio for any loss or
damage to the Portfolio resulting from use of the
Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or
from failure of the Custodian or any such agent to
enforce effectively such rights as it may have
against the Securities System; at the election of the
Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim
against the Securities System or any other person
which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss
or damage.
2.12A Fund Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned
by a Portfolio in the Direct Paper System of the Custodian
subject to the following provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of
Proper Instructions from the Fund on behalf of the
Portfolio;
2) The Custodian may keep securities of the Portfolio in
the Direct Paper System only if such securities are
represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not
include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise for
customers;
3) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
the Direct Paper System shall identify by book-entry
those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for
the account of the Portfolio upon the making of an
entry on the records of the Custodian to reflect such
payment and transfer of securities to the account of
the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from
the account of the Portfolio, in the form of a
written advice or notice, of Direct Paper on the next
business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies
of daily transaction sheets reflecting each day's
transactions in the Securities System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal
accounting control as the Fund may reasonably request
from time to time;
2.13 Segregated Account. The Custodian shall upon receipt of
Proper Instructions from the Fund on behalf of each
applicable Portfolio establish and maintain a segregated
account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.12 hereof,
(i) in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member
of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio, (ii) for
purposes of segregating cash or government securities in
connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the purposes
of compliance by the Portfolio 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 and
(iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper
Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee signed by an officer
of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper
corporate purposes.
2.14 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to securities of each Portfolio held by it and in
connection with transfers of such securities.
2.15 Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of the Portfolio
or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Portfolio such
proxies, all proxy soliciting materials and all notices
relating to such securities.
2.16 Communications Relating to Fund Portfolio Securities.
Subject to the provisions of Section 2.3, the Custodian
shall transmit promptly to the Fund for each Portfolio all
written information (including, without limitation, pendency
of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund on
behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by
the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Portfolio all
written information received by the Custodian from issuers
of the domestic securities whose tender or exchange is
sought and from the party (or his agents) making the tender
or exchange offer. If the Portfolio desires to take action
with respect to any tender offer, exchange offer or any
other similar transaction, the Portfolio shall notify the
Custodian at least three business days prior to the date on
which the Custodian is to take such action.
2.17 Proper Instructions. Proper instructions as used herein
throughout this Article 2 means a writing signed or
initialled by one or more person or persons as the Board of
Trustees shall have from time to time authorized. Each such
writing shall set forth the specific transaction or type of
transaction involved, including a specific statement of the
purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to
the transaction involved. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved
by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical
or electronic devices provided that the Board of Trustees
and the Custodian are satisfied that such procedures afford
adequate safeguards for the Portfolio's assets. For
purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any
three-party agreement which requires a segregated asset
account in accordance with Section 2.13.
2.18 Actions Permitted without Express Authority. The Custodian
may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses
of handling securities or other similar items
relating to its duties under this Contract, provided
that all such payments shall be accounted for to the
Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities
in definitive form;
3) endorse for collection, in the name of the
Portfolio, checks, drafts and other negotiable
instruments; and
4) in general, attend to all non-discretionary details
in connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the
securities and property of the Portfolio except as
otherwise directed by the Board of Trustees of the
Fund.
2.19 Evidence of Authority. The Custodian shall be protected in
acting upon any instructions, notice, request, consent,
certificate or other instrument or paper believed by it to
be genuine and to have been property executed by or on
behalf of the Fund. The Custodian may receive and accept a
certified copy of a vote of the Board of Trustees of the
Fund as conclusive evidence (a) of the authority of any
person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Trustees
pursuant to the Declaration of Trust as described in such
vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to
the contrary.
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with any supply necessary
information to the entity or entities appointed by the Board of
Trustees of the Fund to keep the books of account of each Portfolio
and/or compute the net asset value per share of the outstanding
shares of each Portfolio or, if directed in writing to do so by the
Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net income
of the Portfolio as described in the Fund's currently effective
prospectus and shall advise the Fund and the Transfer Agent daily
of the total amounts of such net income and, if instructed in
writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income
among its various components. The calculations of the net asset
value per share and the daily income of each Portfolio shall be
made at the time or times described from time to time in the Fund's
currently effective prospectus related to such Portfolio.
4. Records.
The Custodian shall with respect to each Portfolio create
and maintain all records relating to its activities and obligations
under this Contract in such manner as will meet the obligations of
the Fund under the Investment Company Act of 1940, with particular
attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law
or administrative rules or procedures which may be applicable to
the Fund. All such records shall be the property of the Fund and
shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers,
employees or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities
owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall
be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.
5. Opinion of Fund's Independent Accountant.
The Custodian shall take all reasonable action, as the Fund
on behalf of each applicable Portfolio may from time to time
request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities
hereunder in connection with the preparation of the Fund's Form N-
1A, and Form N-SAR or other annual reports to the Securities and
Exchange Commission and with respect to any other requirements of
such Commission.
6. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of
the Portfolios at such times as the Fund may reasonably require,
with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under
this Contract; such reports shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Fund to
provide reasonable assurance that any material inadequacies would
be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation
for its services and expenses as Custodian, as agreed upon from
time to time between the Fund on behalf of the applicable Portfolio
and the Custodian.
8. Responsibility of Custodian.
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the
title, validity or genuineness of any property or evidence of title
thereto received by it or delivered by it pursuant to this Contract
and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it
to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the
terms of a three-party futures or options agreement. The Custodian
shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by
and shall be without liability to the Fund for any action taken or
omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. Notwithstanding the foregoing, the responsibility of
the Custodian with respect to redemptions effected by check shall
be in accordance with a separate Agreement entered into between the
Custodian and the Fund.
If the Fund on behalf of the Portfolio requires the
Custodian to take any action with respect to securities, which
action involves the payment of money or which action may, in the
opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or
securities for any purpose of the benefit of a Portfolio or in the
event that the Custodian or its nominee shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as
may arise from its or its nominee's own negligent action, negligent
failure to act or willful misconduct, any property at any time held
for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to
dispose of the Portfolio's assets to the extent necessary to obtain
reimbursement.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either
party by an instrument in writing delivered or mailed, postage
prepaid to the other party, such termination to take effect not
sooner than thirty (30) days after the date of such delivery or
mailing; provided, however that the Custodian shall not with
respect to a Portfolio act under Section 2.12 hereof in the absence
of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System and the
receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by such
Portfolio of such Securities System, as required in each case by
Rule 17f-4 under the Investment Company Act of 1940, as amended and
that the Custodian shall not act under Section 2.12A hereof in the
absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has approved the
initial use of the Direct Paper System by such Portfolio and the
receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however,
that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or
any provision of the Declaration of Trust, and further provided,
that the Fund may at any time by action of its Board of Trustees
(i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment
of a conservator or receive for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation
as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian for the Fund, or one or more of the
Portfolios shall be appointed by the Board of Trustees of the Fund,
the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities of each applicable Portfolio then
held by it hereunder and shall transfer to an account of the
successor custodian all of the securities of each such Portfolio
held in a Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified copy
of a vote of the Board of Trustees of the Fund, deliver at the
office of the Custodian and transfer such securities, funds and
other properties in accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Trustees
shall have been delivered to the Custodian on or before the date
when such termination shall become effective, then the Custodian
shall have the right to deliver to a bank or trust company, which
is a "bank" as defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on
behalf of each applicable Portfolio and all instruments held by the
Custodian relative thereto and all other property held by it under
this Contract on behalf of each applicable Portfolio and to
transfer to an account of such successor custodian all of the
securities of each such Portfolio held in any Securities System,
Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to procure the
certified copy of the vote referred to or of the Board of Trustees
to appoint a successor custodian, the Custodian shall be entitled
to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the
duties and obligations of the Custodian shall remain in full force
and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the
Custodian and the Fund on behalf of each of the Portfolios, may
from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any
such interpretive or additional provisions shall be in writing
signed by both parties and shall be annexed hereto, provided that
no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
Declaration of Trust of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
12. Additional Funds
In the event that the Fund establishes one or more series of
Shares in addition to the Asset Allocation Portfolio, U.S.
Government High Income Portfolio, Fixed Income Portfolio, and Small
Capitalization Portfolio with respect to which it desires to have
the Custodian render services as custodian under the terms hereof,
it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
13. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of the Commonwealth
of Massachusetts.
14. Prior Contracts.
This Contract supersedes and terminates, as of the date
hereof, all prior contracts between the Fund on behalf of each of
the Portfolios and the Custodian relating to the custody of the
Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed as
of the 19th day of October 1989.
ATTEST QUEST FOR VALUE FAMILY OF FUNDS
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------- ------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ X. Xxxxx By: /s/ Xxxxxx X.
--------------------- ----------------------------
Assistant Secretary Vice President
custody\q4ser.cus
