CUSTODIAN CONTRACT
between
MUTUAL SERIES FUND, INC.
in respect of
MUTUAL SHARES FUND
and
STATE STREET BANK AND TRUST COMPANY
REV 01/88
REV 2/9/88
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 in the United States......3
2.1 Holding Securities ...................................3
2.2 Delivery of Securities ................................3
2.3 Registration of Securities ...........................8
2.4 Bank Accounts........................................ 8
2.5 Availability of Federal Funds..........................9
2.6 Collection of Income...................................9
2.7 Payment of Fund Monies................................10
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased.......................12
2.9 Appointment of Agents.................................13
2.10 Deposit of Fund Assets in Security System.............13
2.10A Fund Assets Held in the Custodian's Direct
Paper System..........................................16
2.11 Segregated Account....................................17
2.12 Ownership Certificates for Tax Purposes...............18
2.13 Proxies...............................................19
2.14 Communications Relating Portfolio Securities..........19
3. Duties of the Custodian with Respect to Property of
the fund Held Outside of the United States..................20
3.1 Appointment of Foreign Sub-Custodians..................20
3.2 Assets to be Held......................................21
3.3 Foreign Securities Depositories........................21
3.4 Segregation of Securities..............................21
3.5 Agreements with Foreign Banking Institutions...........22
3.6 Access of Independent Accountants of the Fund..........22
3.7 Reports by Custodian...................................23
3.8 Transactions in Foreign Custody Account................23
3.9 Liability of Foreign Custody Account...................24
3.10 Monitoring Responsibilities............................25
3.11 Branches of U.S. Banks.................................25
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund.......................................26
5. Proper Instructions.........................................26
6. Actions Permitted Without Express Authority.................27
7. Evidence of Authority.......................................28
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income...........28
9. Records.....................................................29
10. Opinion of Fund's Independent Accountant...................29
11. Reports to Fund by Independent Public Accountant...........30
12. Compensation of Custodian..................................30
13. Responsibility of Custodian................................30
14. Effective Period, Termination and Amendment................33
15. Successor Custodian........................................35
16. Interpretive and Additional Provisions.....................36
17. Additional Funds...........................................37
18. Massachusetts Law to Apply.................................37
19. Prior Contracts............................................37
CUSTODIAN CONTRACT
This Contract between Mutual Series Fund, Inc., in respect of MUTUAL
SHARES FUND, a corporation organized and existing under the laws of Maryland,
having its principal place of business at 00 Xxxxxxxx, 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 three series, the
Mutual Shares Fund, the Mutual Qualified Income Fund, and the Mutual Beacon Fund
(such series together with all other series subsequently established by the Fund
and made subject to this Contract in accordance with paragraph 17, being herein
referred to as the "Portfolio(s)");
NOW THEREFORE, 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, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Charter and By
Laws. The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian
all securities, except for certain securities and related documents evidencing
loans to or claims against entities which are acquired by the Fund and are held
for it pursuant to a custodial arrangement directly with Herzog, Heine,
Geduld,Inc., as to which the Custodian is not expected to have and does not
undertake any responsibility, 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 held or received by the Portfolio and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians located in the United states, but only in
accordance with an applicable vote by the Board of Directors 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. The Custodian may employ as sub-custodians
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3. 2.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
FUND HELD BY THE CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and
physically segregate for the account of each Portfolio all non-cash
property, to be held by it in the United States, including all domestic
securities, except for certain securities and related documents evidencing
loans to or claims against entities which are acquired by the Fund and are
held for it pursuant to a custodial arrangement directly with Herzog,
Heine, Geduld, Inc., as to which the Custodian is not expected to have and
does not undertake any responsibility owned by such Portfolio, other than
(a) securities which are maintained pursuant to Section 2.10 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 2.10A.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a Securities
System account of the system account ("Direct Paper System Account") only
upon receipt of Proper Instructions, 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 2.10 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 2.9 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 Directors 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. Domestic 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 2.9 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.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States 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 a
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 Directors 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 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.
2.6 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to United States registered
securities held hereunder to which 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 United
States 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.
2.7 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 2.10 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; or (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 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;
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 Article 4 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 to 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 Directors 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.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In
any and every case where payment for purchase of domestic securities for
the account of a 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 such 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.
2.9 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.
2.10 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain domestic 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, 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 domestic securities of the Portfolio in a
Securities System provided that such securities are represented in an
account ("Account") of the Custodian of 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 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 transactions in the
Securities System for the account for 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 14 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.
2.10A 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 any 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 any 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 transaction 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.
2.11 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 2.10 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 Directors 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.
2.12 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 domestic securities of each Portfolio held by it and in
connection with transfers of such securities.
2.13 PROXIES. The Custodian shall, with respect to the domestic 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.
2.14 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES, 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 transactions, the Portfolio shall notify the
Custodian at least one business day prior to the date on which the
Custodian is to take such action. In the event the Portfolio notifies the
Custodian less than one business day prior to the date on which such
action is to be taken, the Custodian shall use its best efforts and any
reasonable means to take any and all such actions as may be requested by
the Portfolio. So long as the Custodian uses its best efforts and any
reasonable means to take the action requested by the Portfolio less than
one business day prior to the date on which such action is to be taken,
the Custodian shall not be liable for its failure or inability to take
any such action.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
FUND HELD OUTSIDE OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS.
The Custodian is authorized and instructed to employ as sub-custodians
for the securities and other assets of the Portfolios maintained outside
of the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper Instructions", together with a
certified resolution of the Fund's Board of Directors on behalf of the
applicable Portfolio(s),the Custodian and the Fund may on behalf of the
applicable Portfolio(s) agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodians. Upon receipt of Proper
Instructions from the Fund on behalf of the applicable Portfolio(s) the
Custodian shall cease the employment of any one or more of such
sub-custodians for maintaining custody of the applicable Portfolio(s)
assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the
securities and other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in paragraph
(c)(1) of Rule 17f-5 under the Investment Company Act of 1940, and (b)
cash and cash equivalents in such amounts as the Custodian or the Fund
may determine to be reasonably necessary to effect the foreign securities
transactions of the applicable Portfolios.
3.3 FOREIGN SECURITIES DEPOSITORIES. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund on behalf of the applicable
Portfolio, assets of the applicable Portfolios shall be maintained in
foreign securities depositories only through arrangements implemented by
the foreign banking institutions serving as sub-custodians pursuant to
the terms hereof.
3.4 SEGREGATION OF SECURITIES. The Custodian shall identify on its books as
belonging to each applicable Portfolio of the Fund, the foreign securities
of such Portfolios held by each foreign sub-custodian. Each agreement
pursuant to which the Custodian employs a foreign banking institution
shall require that such institution establish custody account(s) for the
Custodians on behalf of the Fund for each applicable Portfolio of the Fund
and physically segregate in each such account securities and other assets
of the Portfolios, and, in the event that such institution deposits the
securities of one or more of the Portfolios in a foreign securities
depository, that it shall identify on its books as belonging to the
Custodian, as agent for each applicable Portfolio, the securities so
deposited (all collectively referred to as the "Account").
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets of each Portfolio
will be freely transferable without the payment of money or value other
than for custody or administration; (c) adequate records will be
maintained identifying the assets as belonging to the each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the Fund,
the Custodian 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 a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institutions under its agreement with the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities and
other assets of the Portfolio(s) held by foreign sub-custodians, including
but not limited to an identification of entities having possession of the
Portfolio(s) securities and other assets and advices or notifications of
any transfers of securities to or from each custodial account maintained
by a foreign banking institution for the Custodian on behalf of each
applicable Portfolio indicating, as to securities acquired for a
Portfolio, the identity of the entity having physical possession of such
securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall on behalf of each applicable Portfolio
make or cause its foreign sub-custodian to transfer, exchange or deliver
foreign securities owned by the Portfolio, but except to the extent
explicitly provided herein only in any of the cases specified in Section
2.2.(b) Upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties the Custodian shall on
behalf of each applicable Portfolio pay out or cause its foreign
sub-custodians to pay out monies of a Portfolio except to the extent
explicitly provided herein only in any of the, cases specified in Section
2.7.(c) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the account
of each applicable Portfolio, other than in the London market, may be
effected in accordance with the customary or 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 exception
or receiving later payment for such securities from such purchaser or
dealer. (d) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of the Contract and the Fund agrees to hold any
such nominee harmless from any liability as a holder of record of such
securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign sub-custodian
shall require the institution to exercise reasonable care in the
performance of its duties and to indemnify, and hold harmless, the
Custodian and Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.10 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be similar
in kind and scope to that furnished to the Fund in connection with the
initial approval of this Contract. In addition, the Custodian will promptly
inform the Fund in the event that the Custodian learns of a material
adverse change in the financial condition of a foreign sub-custodian or is
notified by a foreign banking institution employed as a foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.11 Branches of U.S. Banks. Except as otherwise set forth in this Contract, the
provisions hereof shall not apply where the custody of the Fund assets is
maintained in a foreign branch of a banking institution which is a "bank"
as defined by Section 2(a) (5) of the Investment Company Act of 1940 and
meets the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by
Article 1 of this Contract.
4. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS' of SHARES OF THE FUND. 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 the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Charter and By Laws and any applicable votes of the Board of
Directors 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.
5. PROPER INSTRUCTIONS. Proper Instructions as used throughout this Contract
means a writing signed or initialled by one or
more person or persons as the Board of Directors 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 Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechancial or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Portfolio's assets.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Fund on behalf of each
applicable Portfolio:
1) upon written approval of the Fund, 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 Directors of the Fund.
7. 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 properly executed by or on
behalf of the Fund. The Custodian may receive and accept a certified copy of a
vote of the Board of Directors 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 Directors pursuant to the
Charter and By Laws 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.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the Board of
Directors 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 related to such Portfolio 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.
9. 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 3la-1 and 3la-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.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT The Custodian shall take all
reasonable actions, 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-lA, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
11. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS The Custodian shall
provide the Fund, on behalf of each of the Portfolios at such time 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.
12. 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 each
applicable Portfolio and the Custodian.
13. 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.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract. The Custodian shall be without liability for
any action taken or omitted in reliance on advice of counsel to the Fund and for
any action taken or omitted in reliance on advice of other counsel, provided
that the Custodian shall have notified the Fund of the action proposed to be
taken or omitted and the advice of counsel with respect thereto prior to such
action or omission and the Fund shall not have objected thereto.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.10)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.11 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a 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 actions,
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 for the benefit of a Portfolio including the purchase or sale of foreign
exchange or contracts for foreign exchange, 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 such Portfolio's assets to the
extent necessary to obtain reimbursement.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominee from and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or its
nominee arising out of actions undertaken by the Custodian pursuant to the terms
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, provided that
the Custodian shall notify the Fund of any such tax, charge, expense,
assessment, claim or liability promptly upon receipt by the Custodian of notice
thereof. The Custodian shall not be entitled to charge any account of the Fund
for such items unless the Fund shall fail to object to the liability or
responsibility of the Fund for such tax, charge, expense, assessment, claim or
liability in writing received by the Custodian within ten (10) business days of
receipt by the Fund of written notice of any such tax, charge, expense,
assessment, claim or liability and for its fees. To secure any advances of cash
or securities made by the Custodian to or for the benefit of the Fund for any
purpose which results in the Fund incurring an overdraft at the end of any
business day, the Fund hereby grants to the Custodian a security interest in and
pledges to the Custodian securities held for it by the Custodian, in an amount
not to exceed the lesser of the dollar amounts advanced or ten percent of the
Fund's gross assets, the specific securities to be designated in writing from
time to time by the Fund or its investment adviser. Should the Fund fail to
repay promptly any advances of cash or securities, the Custodian shall be
entitled to use available cash and to dispose of pledged securities and property
as is necessary to repay any such advances.
The Custodian agrees to indemnify and hold harmless the
Fund from and against all taxes, charges, expenses, assessments,
claims and liabilities (including counsel fees) incurred or
assessed against it or its nominee arising out of actions
undertaken by the Fund pursuant to the terms of this Contract,
except such as may arise from its own negligent action, negligent
failure to act or willful misconduct, provided that the Fund
shall notify the Custodian of any such tax, charge, expense,
assessment, claim or liability promptly upon receipt by the Fund
of notice thereof.
14. 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 pre paid 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 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities System by such Portfolio and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Directors has reviewed the use 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 with respect to
a Portfolio act under Section 2.10A hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the Board of
Directors 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 Directors 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 Charter and By Laws, and
further provided, that the Fund on behalf of one or more of the Portfolios may
at any time by action of its Board of Directors, (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 receiver 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.
15. SUCCESSOR CUSTODIAN
If a successor custodian for the Fund, or one or more of the
Portfolios shall be appointed by the Board of Directors 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 Directors 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 Directors 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 any
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 and to transfer to an account of such successor
custodian all 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 Directors 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.
16. 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 Charter and By laws 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.
17. ADDITIONAL FUNDS
In the event that the Fund establishes one or more
series of Shares in addition to the mutual Shares Fund, the
Mutual Qualified Fund, and the Mutual Beacon Fund 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.
18. 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.
17. 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 February, 1988.
MUTUAL SERIES FUND, INC.
in respect of
MUTUAL SHARES FUND
BY: /s/XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, by: (Illegible)
ATTEST:
/s/ILLEGIBLE
STATE STREET BANK AND TRUST
By: /s/ILLEGIBLE
VICE PRESIDENT
ATTEST:
/s/ILLEGIBLE
ASSISTANT SECRETARY
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Mutual Series Fund,
Inc. for the use as sub-custodians for the Fund's securities and other assets:
State Street London
EXHIBIT 1
CUSTODIAN AGREEMENT
TO:
Gentlemen:
The undersigned ("State Street") hereby request that you (the Bank)
establish a custody account and a cash account for each custodian/employee
benefit plan identified in the Schedule attached to this Agreement and each
additional account which is identified to this Agreement. Each such custody or
cash account a applicable will be referred to herein as the "Account" and will
be subject to the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall physically
segregate in the Account such cash, bullion, coin, stocks, shares,
bonds, debentures, notes and other securities and other property
which is delivered to the Bank for that State Street Account (the
"Property").
2. a. Without the prior approval of State Street it will
not deposit securities in any securities depository
or utilize a clearing agency, incorporated or
organized under the laws of a country other than
the United States, unless such depository or
clearing house operates the central system for
handling of securities or equivalent book-entries
in that country or operates a transnational system
for the central handling of securities or
equivalent book-entries;
b. When securities held for an Account are deposited in a securities
depository or clearing agency by the Bank, the Bank shall
identify on its books as belonging to State Street as agent for
such Account, the securities so deposited.
3. The Banks represents that either:
a. It currently has stockholders' equity in excess of
$200 million (U.S. dollars or the equivalent of
U.S. dollars computed in accordance with generally
accepted U.S. accounting principles) and will
promptly inform State Street in the event that
there appears to be substantial likelihood that its
stockholders' equity will decline below $200
million, or in any event, at such time as its
stockholders' equity in fact decline below $200
million; or
b. It is the subject of an exemptive order issued by
the United States Securities and Exchange
Commission, which such order permits State Street
to employ the Bank as a sub custodian,
notwithstanding the fact that the Bank's
stockholders' equity is currently below $200
million or may in the future decline below $200
million due to currency fluctuation.
4. Upon the written instructions of State Street, as permitted
by Paragraph 8, the Bank is authorized to pay cash from the
Account and to sell, assign, transfer, deliver or exchange,
or to purchase for the Account, any and all stocks, shares,
bonds, debentures, notes and other securities ("Securities"),
bullion, coin and any other property, but only-as provided in
such written instructions. The Bank shall not be held liable
for any act or omission to act on instructions given or
purported to be given should there by any error in such
instructions.
5. Unless the Bank receives written instructions of State Street
to the contrary, the Bank is authorized:
a. To promptly receive and collect all income and
principal with respect to the Property and to
credit cash receipts to the Account;
b. To promptly exchange securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the securities themselves);
c. To promptly surrender securities at maturity or
when called for redemption upon receiving payment
therefor;
d. Whenever notification of a rights entitlement or a
fractional interest resulting from a rights issue,
stock dividend or stock split is received for the
Account and such rights entitlement or fractional
interest bears an expiration date, the Bank will
endeavor to obtain State Street Bank's instructions,
but should these not be received in time for the
Bank to take timely actions, the Bank is authorized
to sell such rights entitlements or fractional
interest and to credit the Account;
e. To hold registered in the name of the nominee of the
Bank or its agents such Securities as are ordinarily
held in registered form;
f. To execute in State Street's name for the Account,
whenever the Bank deems it appropriate, such
ownership an other certificates as may be required
to obtain the payment of income from the Property;
and
g. To pay or cause to be paid, from the Account any and all taxes and
levies in the nature of taxes imposed on such assets by any
governmental authority and shall use reasonable efforts, to
promptly reclaim any foreign withholding tax relating to the
Account.
6. If the Bank shall receive any proxies, notices, reports or
other communications relative to any of the Securities of the
account in connection with tender offers, reorganization,
mergers, consolidations, or similar events which may have an
impact upon the issuer thereof, the Bank shall promptly
transmit any such communication to State Street Bank by means
as will permit State Street Bank to take timely action with
respect thereto.
7. The Bank is authorized in its discretion to appoint brokers and agents in
connection with the Bank's handling of transactions relating to the
Property provided that any such appointment shall not relieve the Bank of
any of its responsibilities or liabilities hereunder.
8. Written instructions shall include (i) instructions in
writing signed by such persons as are designated in writing
by State Street; (ii) telex or tested telex instructions of
State Street; (iii) other forms of instruction in computer
readable form as shall be customarily utilized for the
transmission of like information; an (iv) such other forms of
communication as from time to time shall be agreed upon by
State Street and the Bank.
9. The Bank shall supply periodic reports with respect to the safekeeping of
assets held by it under this agreement. The content of such reports shall
include but not be limited to any transfer to or from any account held by
the Bank hereunder and such other information as State Street may
reasonably request.
10. In addition to its obligations under Section 2B hereof, the Bank shall
maintain such other records as may be necessary to identify the assets
hereunder as belonging to each custodian/employee benefit, plan identified
in our Schedule attached to this agreement and each additional account
which is identified to this agreement.
11. The Bank agrees that its books and records relating to its
actions under this Agreement shall be opened to the physical,
on-premises inspection and audit at reasonable times by
officers of, auditors employed by or other representatives of
State Street (including to the extent permitted under
Massachusetts law the independent public accountants for any
entity whose Property is being held hereunder) and shall be
retained for such period as shall be agreed by State Street
and the Bank.
12. The Bank shall be entitled to reasonable compensation for its services and
expenses as custodian under this Agreement, as agreed upon from time to time
by the Bank and State Street.
13. The Bank shall exercise reasonable care in the performance of
its duties, as are set forth or contemplated herein or
contained in instructions given to the Bank which are not
contrary to this Agreement, shall maintain adequate insurance
and agrees to indemnify and hold harmless, State Street and
each Account from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection
with the Bank's performance of its obligations hereunder.
14. The Bank agrees (i) the property held hereunder is not
subject to any right, charge, security interest, lien or
claim of any kind in favor of the Bank or any of its agents
or its creditors except a claim of payment for their safe
custody and administration and (ii) the beneficial ownership
of the property shall be freely transferable without the
payment of money or other value other than for safe custody
or administration.
15. The Bank agrees to meet State Street Operating Requirements
(See Exhibit A).
16. This Agreement may be terminated by the Bank or State Street by 60 days'
written notice to the other, sent by registered mail or express courier. The
Bank, upon the date this Agreement terminate pursuant to notice which has
been given in a timely fashion, shall deliver the Property to the beneficial
owner unless the Bank has received from the beneficial owner 60 days' prior
to the date an which this Agreement is to be terminated written instructions
of State Street specifying the name(s) of the person(s) to whom the Property
shall be delivered.
17. The Bank and State Street shall each use its best efforts to maintain the
confidentiality of the Property in each Account, subject, however, to the
provisions of any laws requiring the disclosure of the Property.
18. Unless otherwise specified in this Agreement, all notices with respect to
matters contemplated by this Agreement, shall be deemed duly given when
received in writing or by confirmed telex by the Bank or State Street at
their respective addresses set forth below or at such other address as be
specified in each case in a notice similarly given:
To State Street Master Trust Division, Global Custody
STATE STREET BANK AND TRUST COMPANY
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
To the Bank
19. This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts except to the extent that such
laws are preempted by the laws of the United States of America.
Please acknowledge your agreement to the foregoing by executing a
copy of this letter,
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By:________________________________
Vice President
Date:______________________________
Agreed to by:
By:__________________________
Date:________________________
0043k/4
AGREEMENT made by and between State Street Bank and Trust
Company (the "Custodian") and Mutual Series Fund, Inc. (the
"Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated FEBRUARY 19, 1988 (the "Custodian" Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the Custodian Contract
to provide for the maintenance of the Fund's foreign securities, and cash
incidental to transactions in such securities, in the custody of certain foreign
banking institutions and foreign securities depositories acting as
sub-custodians in conformity with the requirements of Rule 17f-5 under the
Investment Company Act of 1940;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and conditions;
1. APPOINTMENT OF FOREIGN SUB-CUSTODIANS
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained outside the
United States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions', as defined in Section 2.17 of the Custodian
Contract, together with a certified resolution of the Fund's Board of Directors,
the Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper Instructions, the
Fund may instruct the Custodian to cease the employment of any one or more of
such sub-custodians for maintaining custody of the Fund's assets.
2. ASSETS TO BE HELD
The Custodian shall limit the securities and other assets maintained in
the custody of the foreign sub-custodians to: (a) "foreign securities", as
defined in paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of
1940, and (b) cash and cash equivalents in such amounts as the Custodian or the
Fund may determine to be reasonably necessary to effect the Fund's foreign
securities transactions.
MG-22e 1/88
3. FOREIGN SECURITIES DEPOSITORIES
Except as may otherwise be agreed upon in writing by the Custodian and
the Fund, assets of the Fund shall be maintained in foreign securities
depositories only through arrangements implemented by the foreign banking
institutions serving as sub-custodians pursuant to the terms hereof. Where
possible, such arrangements shall include entry into agreements containing the
provisions set forth in Section 5 hereof.
4. SEGREGATION OF SECURITIES
The Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian. Each
agreement pursuant to which the Custodian employs a foreign banking institution
shall require that such institution establish a custody account for the
Custodian on behalf of the Fund and physically segregate in that account,
securities and other assets of the Fund, and, in the event that such institution
deposits the Fund's securities in a foreign securities depository, that it shall
identify on its books as belonging to the Custodian, as agent for the Fund, the
securities so deposited.
5. AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS
Each agreement with a foreign banking institution shall be
substantially in the form set forth in Exhibit 1 hereto and shall provide that:
(a) the Fund's assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking institution
or its creditors or agents, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the Fund's assets will be freely
transferable without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the assets
as belonging to the Fund; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accounts for the Fund, will be given
access to the books and records of the foreign banking institution relating to
its actions under its agreement with the Custodian; and (e) assets of the Fund
held by the foreign sub-custodian will be subject only to the instructions of
the Custodian or its agents.
6. ACCESS OF INDEPENDENT ACCOUNTS OF THE FUND
Upon request of the Fund, the Custodian will use its best efforts to
arrange for the independent accounts of the Fund to be afforded access to the
books and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance of
such foreign banking institution under its agreement with the Custodian.
7. REPORTS BY CUSTODIAN
The Custodian will supply to the Fund from time to time, as mutually
agreed upon, statements in respect of the securities and other assets of the
Fund held by foreign sub-custodians, including but not limited to an
identification of entities having possession of the Fund's securities and other
assets and advices or notifications of any transfers of securities to or from
each custodial account maintained by a foreign banking institution for the
Custodian on behalf of the Fund indicating, as to securities acquired for the
Fund, the identity of the entity having physical possession of such securities.
8. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT
(a) Except as otherwise provided in paragraph (b) of this Section 8,
the provisions of Section 2.2 and 2.8 of the Custodian Contract shall apply,
MUTATIS MUTANDIS to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
(b) Notwithstanding any provision of the Custodian Contract to the
contrary, settlement and payment for securities received for the account of the
Fund and delivery of 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.
(c) Securities maintained in the custody of a foreign sub-custodian may be
maintained in the name of such entity's nominee to the same extent as set forth
in Section 2.3 of the Custodian Contract, and the Fund agrees to hold any such
nominee harmless from any liability as a holder of record of such securities.
9. LIABILITY OF FOREIGN SUB-CUSTODIANS
Each agreement pursuant to which the Custodian employs a foreign banking
institution as a foreign sub-custodian shall require the institution to exercise
reasonable care in the performance of its duties and to indemnify, and hold
harmless, the Custodian and each Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian with respect
to any claims against a foreign banking institution as a consequence of any such
loss, damage, cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost, expense, liability
or claim.
10. LIABILITY OF CUSTODIAN
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodian generally in the Custodian Contract and, regardless of whether
assets are maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated by paragraph 13
hereof, the Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation, currency
restrictions, or acts or war or terrorism or otherwise resulting from a bank or
a securities depository failure to exercise reasonable care. Notwithstanding the
foregoing provisions of this paragraph 10, in delegating custody duties to State
Street London Lts., the Custodian shall not be relieved of any responsibility to
the Fund for any loss due to such delegations, except such loss as may result
from (a) political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection, civil
strife or armed hostilities) or (b) other risk of loss (excluding bankruptcy or
insolvency of State Street London Ltd. not caused by political risk) for which
neither the Custodian nor State Street London Ltd. would be liable (including,
but not limited to, losses due to Acts of God, nuclear incident or other losses
under circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care).
11. REIMBURSEMENT FOR ADVANCES
If the Fund requires the Custodian to advance cash or securities for
any purpose including the purchase or sale of foreign exchange or of contracts
for foreign exchange, 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
Fund 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 Fund assets to the extent necessary to obtain reimbursement.
12. MONITORING RESPONSIBILITIES
The Custodian shall furnish annually to the Fund, during the month of
June, information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that furnished
to the Fund in connection with the initial approval of this amendment to the
Custodian Contract. In addition, the Custodian will promptly inform the Fund in
the event that the Custodian learns of a material adverse change in the
financial condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not the subject
of an exemptive order from the Securities and Exchange Commission is notified by
such foreign sub-custodian that there appears to be a substantial likelihood
that its shareholders' equity will decline below $200 million (U.S. dollars or
the equivalent thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted U.S.
accounting principles).
13. BRANCHES OF U.S. BANKS
(a) Except as otherwise set forth in this amendment to the Custodian
Contract, the provisions hereof shall not apply where the custody of the Fund
assets is maintained in a foreign branch of a banking institution which is a
"bank' as defined by Section 2(a)(5) of the Investment Company Act of 1940
meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by paragraph
1 of the Custodian Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained in
an interest bearing account established for the Fund with the Custodian's London
Branch, which account shall be subject to the direction of the Custodian, State
Street London Ltd. or both.
14. APPLICABILITY OF CUSTODIAN CONTRACT
Except as specifically superseded or modified herein,
the terms and provisions of the Custodian Contract shall continue to apply with
full force and effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument t-o be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of , 1988.
MUTUAL SERIES FUND, INC.
ATTEST:
/S/ILLEGIBLE............................By: /s/ILLEGIBLE........
(Title)TREASURER (Title)SECRETARY
STATE STREET BANK AND TRUST COMPANY
ATTEST:
/S/ILLEGIBLE................ By: /s/ILLEGIBLE
---------------------------- ------------------------
Assistant Secretary Vice President
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Mutual Series Fund,
Inc. for use as sub-custodians for the Fund's securities and other assets.
Xxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx Xxxxxx Xxxxx
Credit Commercial de France SICOVAM
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Mutual Series Fund
Inc. for use as sub-custodians for the Fund's securities and other assets:
Bank Mees & Hope N.V.
Banque Bruxelles Xxxxxxx
Xxxxxxxx Handels und Frankfurter Bank
Caisse Interprofessionnelle de Depots et de
Virements de Titres
Canada Trust Company
The Canadian Depository for Securities Limited
Central Gilts Office
Centrale de Livraison de Valeurs Mobilieres
Credit Commercial de France
The Deutscher Kassenverein AG
The Euro-Clear System
Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V.
Societe Interprofessionelle pour la Compensation
des valuers Mcbilieres
State Street London Limited
Schweizerische Effekten-Giro AG
Union Bank of Switzerland
STATE STREET BANK AND TRUST COMPANY
MUTUAL SERIES FUND, INC.
CUSTODIAN FEE SCHEDULE
PER PORTFOLIO
EFFECTIVE NOVEMBER 1, 1995
I. ADMINISTRATION
CUSTODY, PORTFOLIO, AND FUND ACCOUNTING SERVICE - Maintain custody of fund
assets. Settle portfolio purchases and sales. Report buy and sell fails.
Determine and collect portfolio income. Make cash disbursements and report cash
transactions. Maintain investment ledgers, provide selected portfolio
transactions, position and income reports. Maintain general ledger and capital
stock accounts. Prepare daily trial balance. Calculate net asset value daily.
Provide selected general ledger reports. Securities yield or market value
quotations will be provided to State Street by the fund.
The administration fee shown below is an annual charge, billed and payable
monthly based on average monthly net assets.
(Domestic Assets only)
ANNUAL FEES
CUSTODY, PORTFOLIO
FUND NET ASSETS AND FUND ACCOUNTING
First $100 Million 4 Basis Points
Next $900 Million 1 Basis Point
Next $1 Billion .75 Basis Point
Next $1 Billion .50 Basis Point
Over $3 Billion No Asset Charge
Minimum Monthly Charge $3,000
II. GLOBAL CUSTODY - Services provided include:
Cash Movements, Foreign Communication, Foreign Exchange
(local currency settlements).
ANNUAL FEES
All Global Assets 6 Basis Points
III. PORTFOLIO TRADES - FOR EACH LINE ITEM PROCESSED
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $12.00
New York Physical Settlements $25.00
Maturity Collections $ 8.00
PTC Purchase, Sale, Deposit, or Withdrawal $20.00
Foreign Trades $25.00
All Other Trades $16.00
IV. OPTIONS
Option charge for each option written or closing
contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
V. LENDING OF SECURITIES
Deliver loaned securities versus cash collateral $20.00
Deliver loaned securities versus securities
collateral $30.00
Receive/deliver additional cash collateral $ 6.00
Substitutions of securities collateral $30.00
Deliver cash collateral versus receipt of loaned
securities $15.00
Deliver securities collateral versus receipt of
loaned securities $25.00
Loan administration-xxxx-to-market per day, per
loan $ 3.00
VI. INTEREST RATE FUTURES State Street
Transactions - no security movement $ 8.00
VII. PRINCIPAL REDUCTION PAYMENTS
Per Paydown $10.00
VIII.DIVIDEND CHARGES
(For items held at the Request of Traders
over record date in street form) $50.00
IX. SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund consolidations
or reorganizations, extraordinary security shipments and, the preparation
of special reports will be subject to negotiation. Yield calculation and
other special items will be negotiated separately.
X. OUT-OF-POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but are
not limited to the following:
Telephone
Wire Charges (5.00 per wire in and $5.00 out) Postage and Insurance
Courier Service Legal Fees Supplies Related to Fund Records Rush
Transfer - $8.00 each Duplicating Transfer Fees Sub-Custodian Charges
Price Waterhouse Audit Letter Federal Reserve Fee for Return Check items
over $2,500 - $4.25 GNMIA Transfer - $15.00 each
XI. BALANCE CREDIT
A balance credit will be applied against the above fees based on the
monthly average collected balances, less 10% federal reserve requirement,
appearing in the custodian account at the average rate on thirteen week
treasury xxxx.
MUTUAL SERIES FUND, INC. STATE BANK AND TRUST COMPANY
By: By:
Title:TREASURER Title: VICE PRESIDENT
Date:OCTOBER 30, 1995 Date:OCTOBER 25, 1995
SSBZ0552 REV 10/90
