EXHIBIT (G)
9/10/2001
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
DEFINITIONS...............................................................1
ARTICLE I - CUSTODY.......................................................4
1. Appointment of Custodian.........................................4
2. Custody of Cash and Securities...................................4
3. Settlement of Fund Transactions..................................8
4. Lending of Securities............................................9
5. Persons Having Access to Assets of the Fund......................9
6. Standard of Care; Scope of Custodial Responsibilities...........10
7. Appointment of Subcustodians...................................11
8. Overdraft Facility and Security for Payment.....................12
9. Tax Obligations.................................................12
ARTICLE II - FOREIGN CUSTODY MANAGER SERVICES............................13
1. Delegation......................................................13
2. Changes to Appendix C...........................................13
3. Reports to Board................................................13
4. Monitoring System...............................................13
5. Standard of Care................................................13
6. Use of Securities Depositories..................................14
ARTICLE III - Information Services.......................................14
1. Risk Analysis...................................................14
2. Monitoring of Securities Depositories...........................14
3. Use of Agents...................................................14
4. Exercise of Reasonable Care.....................................15
5. Liabilities and Warranties......................................15
ARTICLE IV - GENERAL PROVISIONS..........................................15
1. Compensation....................................................15
2. Insolvency of Foreign Custodians................................15
3. Liability for Depositories......................................16
4. Damages.........................................................16
5. Indemnification; Liability of the Fund..........................16
6. Force Majeure...................................................16
7. Termination.....................................................16
8. Inspection of Books and Records.................................17
9. Miscellaneous...................................................17
APPENDIX A.....Authorized Persons........................................21
APPENDIX B.....Fund Officers.............................................21
APPENDIX C.....Selected Countries........................................22
APPENDIX D.....Information Services Agreement............................23
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MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of September 10, 2001, and is between The Gabelli
Value Fund, Inc. (the "Company" or the "Fund"), a corporation organized under
the laws of the State of Maryland having its principal office and place of
business at Xxx Xxxxxxxxx Xxxxxx, Xxx, XX 00000, and BOSTON SAFE DEPOSIT AND
TRUST COMPANY, (the "Custodian") a Massachusetts trust company with its
principal place of business at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company and the Custodian desire to restate the terms of
their existing custody agreement to reflect the changes to Rules 17f-5 and the
requirements of new Rule 17f-7, and to set forth their agreement with respect to
the custody of the Funds' Securities and cash and the processing of Securities
transactions;
WHEREAS, the Board desires to delegate certain of its responsibilities
for performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to the Custodian as a Foreign Custody Manager; and
WHEREAS, the Custodian agrees to accept such delegation with respect to
Assets, including those held by Foreign Custodians in the Selected Countries as
set forth in jurisdictions listed on APPENDIX C as set forth in Article II;
WHEREAS, the Custodian agrees to perform the function of a Primary
Custodian under Rule 17f-7;
NOW THEREFORE, the Company and the Custodian agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires otherwise, shall
have the following meanings:
1. "ACT": the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time.
References to a Rule herein are references to a Rule under the
Act unless otherwise specified.
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2. "AGREEMENT": this agreement and any amendments.
3. "ASSETS": any of the Funds' investments, including foreign
currencies and investments for which the primary market is
outside the United States, and such cash and cash equivalents
as are reasonably necessary to effect the Funds' transactions
in such investments.
4. "AUTHORIZED PERSON": the Chairman of the Company Board, its
President, and any Vice President, Secretary, Treasurer or any
other person, whether or not any such person is an officer or
employee of the Company, duly authorized by the Board to add
or delete jurisdictions pursuant to Article II and to give
Instructions on behalf of the Company which is listed in the
Certificate annexed hereto as APPENDIX A or such other
Certificate as may be received by the Custodian from time to
time.
5. "BOARD": the Board of Directors (or the body authorized to
exercise authority similar to that of the board of directors
of a corporation) of the Company.
6. "BOOK-ENTRY SYSTEM": the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its
successor or successors and its nominee or nominees.
7. "BUSINESS DAY": any day on which the Funds, the Custodian, the
Book-Entry System and appropriate clearing corporation(s) are
open for business.
8. "CERTIFICATE": any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given
to the Custodian, which is actually received by the Custodian
and signed on behalf of the Company by an Authorized Person or
Persons designated by the Board to issue a Certificate.
9. "COUNTRY RISK": means all factors reasonably related to the
systemic risk of holding assets in a particular country
including, but not limited to, such country's financial
infrastructure (including any Securities Depositories
operating in such country), prevailing custody and settlement
practices and laws applicable to the safekeeping and recovery
of Assets held in custody.
10. "ELIGIBLE SECURITIES DEPOSITORY": the meaning of the term set
forth in Rule 17f-7(b)(1) of the Act.
11. "FOREIGN CUSTODIAN": (a) a banking institution or trust
company, incorporated or organized under the laws of a country
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other than the United States, that is regulated as such by the
country's government or an agency of the country's government;
(b) a majority-owned direct or indirect subsidiary of a U.S.
Bank or bank-holding company; or (c) any entity other than a
Securities Depository with respect to which exemptive or
no-action relief has been granted by the Securities and
Exchange Commission authorizing it to act as a Custodian for
registered investment companies. For the avoidance of doubt,
the term "Foreign Custodian" shall not include Euroclear,
Clearstream, Bank One or any other transnational system for
the central handling (including on a book-entry basis) of
securities transactions regardless of whether or not such
entities or their service providers are acting in a custodial
capacity with respect to Assets, Securities or other property
of the Company.
12. "FOREIGN CUSTODY MANAGER" the meaning set forth in Rule
17f-5(a)(3).
13. "INSTRUCTIONS": directions and instructions to the Custodian
from an Authorized Person in writing by facsimile or
electronic transmission subject to the Custodian's practices
or any other method specifically agreed upon, provided that
the Custodian may, in its discretion, accept oral directions
and instructions from an individual it reasonably believes to
be an Authorized Person and may require confirmation in
writing.
14. "PRIMARY CUSTODIAN": the meaning set forth in Rule 17f-7(b)(2)
of the Act.
15. "PROSPECTUS": the Fund' current prospectus and statement of
additional information relating to the registration of the
Funds' Shares under the Securities Act of 1933, as amended.
16. "RISK ANALYSIS": the analysis required under Rule 17f-7(a)
(1)(i)(A).
17. "RULES 17F-4, 17F-5 AND 17F-7": such Rules as promulgated
under Section 17(f) of the Act, as such rules (and any
successor rules or regulations) may be amended from time to
time.
18. "SECURITY" or "SECURITIES": bonds, debentures, notes, stocks,
shares, evidences of indebtedness, and other securities,
commodities, interests and investments from time to time owned
by the Funds.
19. "SECURITIES DEPOSITORY": a system for the central handling of
securities as defined in Rule 17f-4.
20. "SELECTED COUNTRIES": the jurisdictions listed on APPENDIX C
as such may be amended from time to time in accordance with
Article II.
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21. "SHARES": shares of the Funds, however designated.
All uses of the word "Funds" or the phrase "a Fund" shall refer to the
Fund and all verbs and other parts of speech shall be conformed thereto.
ARTICLE I
CUSTODY PROVISIONS
1. APPOINTMENT OF CUSTODIAN. The Board appoints the Custodian, and the
Custodian accepts appointment as custodian of all the Securities and monies at
the time owned by or in the possession of the Fund during the period of this
Agreement.
2. CUSTODY OF CASH AND SECURITIES.
(a) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver or cause
to be delivered to the Custodian all Securities and monies
owned by each at any time during the period of this Custody
Agreement. The Custodian will not be responsible for such
Securities and monies until actually received. The Board
specifically authorizes the Custodian to hold Securities,
Assets or other property of the Fund with any domestic
subcustodian or Securities Depository or with any Foreign
Custodian or Eligible Securities Depository in any Selected
Country as provided in Article II. Securities and monies of
the Funds deposited in a Securities Depository or Eligible
Securities Depository will be reflected in an account or
accounts which include only assets held by the Custodian or a
Foreign Custodian for its customers.
(b) DISBURSEMENTS OF CASH AND DELIVERY OF SECURITIES. The
Custodian shall disburse cash or deliver out Securities only
for the purposes listed below. Instructions must specify or
evidence the purpose for which any transaction is to be made
and the Company shall be solely responsible to assure that
Instructions are in accord with any limitations or
restrictions applicable to the Funds.
(1) In payment for Securities purchased for a Fund;
(2) In payment of dividends or distributions with respect to
Shares;
(3) In payment for Shares which have been redeemed by a
Fund;
(4) In payment of taxes;
(5) When Securities are called, redeemed, retired, or
otherwise become payable;
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(6) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan
or merger, consolidation, reorganization,
recapitalization or readjustment;
(7) Upon conversion of Securities pursuant to their terms
into other securities;
(8) Upon exercise of subscription, purchase or other similar
rights;
(9) For the payment of interest, management or supervisory
fees, distributions or operating expenses;
(10) In payment of fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to a Fund;
(11) In connection with any borrowings by a Fund or short
sales of securities requiring a pledge of Securities,
but only against receipt of amounts borrowed;
(12) In connection with any loans, but only against receipt
of adequate collateral as specified in Instructions
which shall reflect any restrictions applicable to
a Fund;
(13) For the purpose of redeeming Shares of the capital stock
of a Fund and the delivery to, or the crediting to the
account of, the Custodian or the Company's transfer
agent, such Shares to be purchased or redeemed;
(14) For the purpose of redeeming in kind Shares of a Fund
against delivery to the Bank, its Subcustodian or the
Company's transfer agent of such Shares to be so
redeemed;
(15) For delivery in accordance with the provisions of any
agreement among a Fund, 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 a Fund.
The Custodian will act only in accordance with
Instructions in the delivery of Securities to be held in
escrow and will have no responsibility or liability for
any such Securities which are not returned promptly when
due other than to make proper requests for such return;
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(16) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from
Securities or related transactions;
(17) Upon the termination of this Agreement; and
(18) For other proper purposes as may be specified in
Instructions issued by an officer of the Company which
shall include a statement of the purpose for which the
delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name
of the person or persons to whom delivery or payment is
to be made, and a Certificate stating that the purpose
is a proper purpose under the instruments governing the
Company.
(c) ACTIONS WHICH MAY BE TAKEN WITHOUT INSTRUCTIONS. Unless an
Instruction to the contrary is received, the Custodian shall:
(1) Collect all income due or payable, provided that the
Custodian shall not be responsible for any failure not
attributable to itself to receive payment of (or late
payment of) distributions or other payments with respect
to Securities or other property held in the account;
(2) Present for payment and collect the amount payable upon
all Securities which may mature or be called, redeemed,
retired or otherwise become payable. Notwithstanding the
foregoing, the Custodian shall have no responsibility to
the Company for monitoring or ascertaining any call,
redemption or retirement dates with respect to put bonds
or similar instruments that are owned by Fund and held
by the Custodian or its nominees where such dates are
not published in sources routinely used by the
Custodian. Nor shall the Custodian have any
responsibility or liability to the Company for any loss
by a Fund for any missed payments or other defaults
resulting therefrom with respect to put bonds or similar
instruments unless the Custodian received timely
notification from the Fund specifying the time, place
and manner for the presentment of any such put bond
owned by the Fund and held by the Custodian or its
nominee. The Custodian shall not be responsible and
assumes no liability for the accuracy or completeness of
any notification the Custodian may furnish to a Fund
with respect to put bonds or similar instruments;
(3) Surrender Securities in temporary form for definitive
Securities;
(4) Hold directly, or through a Securities Depository with
respect to Securities therein deposited, for the account
of a Fund all rights and similar Securities issued with
respect to any Securities held by the Custodian
hereunder for a Fund;
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(5) Submit or cause to be submitted to the a Fund or its
investment adviser as designated by a Fund information
actually received by the Custodian regarding ownership
rights pertaining to property held for a Fund;
(6) Deliver or cause to be delivered any Securities held for
a Fund in exchange for other Securities or cash issued
or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;
(7) Deliver or cause to be delivered any Securities held for
a Fund to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation,
and receive and hold under the terms of this Agreement
such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(8) Make or cause to be made such transfers or exchanges of
the assets specifically allocated to a Fund and take
such other steps as shall be stated in Instructions to
be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of a Fund;
(9) Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by a Fund;
(10) Deliver Securities owned by a Fund to the issuer thereof
or its agent when such Securities are called, redeemed,
retired or otherwise become payable; provided, however,
that in any such case the cash or other consideration is
to be delivered to the Custodian. Notwithstanding the
foregoing, the Custodian shall have no responsibility to
the Funds for monitoring or ascertaining any call,
redemption or retirement dates with respect to the put
bonds or similar instruments that are owned by a Fund
and held by the Custodian or its nominee where such
dates are not published in sources routinely used by the
Custodian. Nor shall the Custodian have any
responsibility or liability to the Company for any loss
by a Fund for any missed payment or other default
resulting therefrom with respect to put bonds or similar
instruments unless the Custodian received timely
notification from the Fund specifying the time, place
and manner for the presentment of any such put bond
owned by the Fund and held by the Custodian or its
nominee. The Custodian shall not be responsible and
assumes no liability to the Company for the accuracy or
completeness of any notification the Custodian may
furnish to the Funds with respect to put bonds or
similar investments;
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(11) Endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for
the account of the Funds;
(12) Execute any and all documents, agreements or other
instruments as may be necessary or desirable for the
accomplishment of the purposes of this Agreement.
(d) CONFIRMATION AND STATEMENTS. Promptly after the close of
business on each day, the Custodian shall furnish the Company
with confirmations and a summary of all transfers to or from
the account of the Funds during the day. Where securities
purchased by a Fund are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of a Securities
Depository, the Custodian shall by book-entry or otherwise
identify the quantity of those securities belonging to the
Fund. At least monthly, the Custodian shall furnish the Funds
with a detailed statement of the Securities and monies held
for the Funds under this Custody Agreement.
(e) REGISTRATION OF SECURITIES. The Custodian is authorized to
hold all Securities, Assets, or other property of the Funds in
nominee name, in bearer form or in book-entry form. The
Custodian may register any Securities, Assets or other
property of a Fund in the name of the Fund, in the name of the
Custodian, any domestic subcustodian, or Foreign Custodian, in
the name of any duly appointed registered nominee of such
entity, or in the name of a Securities Depository or its
successor or successors, or its nominee or nominees. Each Fund
agrees to furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee
or in the name of a Securities Depository, any Securities
which it may hold for the account of a Fund and which may from
time to time be registered in the name of a Fund.
(f) SEGREGATED ACCOUNTS. Upon receipt of Instructions, the
Custodian will, from time to time establish segregated
accounts on behalf of the Funds to hold and deal with
specified assets as shall be directed.
3. SETTLEMENT OF FUND TRANSACTIONS.
(a) CUSTOMARY PRACTICES. Settlement of transactions may be
effected in accordance with trading and processing practices
customary in the jurisdiction or market where the transaction
occurs. The Company acknowledges that this may, in certain
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circumstances, require the delivery of cash or Securities (or
other property) without the concurrent receipt of Securities
(or other property) or cash. In such circumstances, the
Custodian shall have no responsibility for nonreceipt of
payments (or late payment) or nondelivery of Securities or
other property (or late delivery) by the counterparty unless
it has breached its standard of care under this Agreement.
(b) CONTRACTUAL INCOME. Unless the parties agree to the contrary,
the Custodian shall credit the Funds, in accordance with the
Custodian's standard operating procedure, with income and
maturity proceeds on securities on contractual payment date
net of any taxes or upon actual receipt. To the extent the
Custodian credits income on contractual payment date, the
Custodian may reverse such accounting entries with back value
to the contractual payment date if the Custodian reasonably
believes that such amount will not be received.
(c) CONTRACTUAL SETTLEMENT. Unless the parties agree to the
contrary, the Custodian will attend to the settlement of
securities transactions in accordance with the Custodian's
standard operating procedure, on the basis of either
contractual settlement date accounting or actual settlement
date accounting. To the extent the Custodian settles certain
securities transactions on the basis of contractual settlement
date accounting, the Custodian may reverse with back value to
the contractual settlement date any entry relating to such
contractual settlement if the Custodian reasonably believes
that such amount will not be received.
4. LENDING OF SECURITIES. The Custodian may lend the assets of the Funds
in accordance with the terms and conditions of a separate securities lending
agreement.
5. PERSONS HAVING ACCESS TO ASSETS OF THE FUND.
(a) The Custodian shall not permit any trustee or agent of the
Company, or any officer, director, employee or agent of the
Funds' investment adviser, of any sub-investment adviser of
the Funds, or of the Funds' administrator, to have physical
access to the Assets held by the Custodian or be authorized or
permitted to withdraw any Assets nor shall the Custodian
deliver any Assets to any such person.
The Custodian shall not permit any officer, director,
employee or agent of the Custodian who holds any similar
position with the Funds' investment adviser, with any
sub-investment adviser of the Funds or with the Funds'
administrator to have access to the Assets.
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(b) Nothing in this Section 5 shall prohibit any duly authorized
officer, employee or agent of the Company, or a duly
authorized officer, director, employee or agent of the
investment adviser, of any sub-investment adviser of the
Funds' or of the Funds' administrator, from giving
Instructions to the Custodian or executing a Certificate so
long as it does not result in delivery of or access to Assets
of the Fund prohibited by paragraph (a) of this Section 5.
6. STANDARD OF CARE; SCOPE OF CUSTODIAL RESPONSIBILITIES.
(a) STANDARD OF CARE. Custodian shall be required to exercise
reasonable care with respect to its duties under this
Agreement unless otherwise provided.
(1) Notwithstanding any other provision of this Custody
Agreement, the Custodian shall not be liable for any
loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, except for
any such loss or damage arising out of the negligence or
willful misconduct of the Custodian.
(2) The Custodian may, with respect to questions of law,
apply for and obtain the advice and opinion of counsel
to the Company or of its own counsel, at the expense of
the Company, and shall be fully protected with respect
to anything done or omitted by it in good faith in
conformity with such advice or opinion.
(b) SCOPE OF DUTIES. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for:
(1) The acts or omissions of any other agent appointed
pursuant to Instructions of a Fund or its investment
adviser including, but not limited to, any broker-dealer
or other entity to hold any Securities or other property
of the Fund as collateral or otherwise pursuant to any
investment strategy.
(2) The validity of the issue of any Securities purchased by
a Fund, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
(3) The legality of the sale of any Securities by a Fund or
the propriety of the amount for which the same are sold;
(4) The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
(5) The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of a Fund;
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(7) The legality of any borrowing for temporary
administrative or emergency purposes.
(c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable
for, or considered to be the Custodian of, any money, whether
or not represented by any check, draft, or other instrument
for the payment of money, received by it on behalf of a Fund
until the Custodian actually receives and collects such money.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall not be
required to effect collection of any amount due to a Fund from
the Fund's transfer agent nor be required to cause payment or
distribution by such transfer agent of any amount paid by the
Custodian to the transfer agent.
(e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall not be
required to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in
default, or if payment is refused after due demand or
presentation, unless and until it shall be directed to take
such action and it shall be assured to its satisfaction of
reimbursement of its related costs and expenses.
(f) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be
under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for a Fund
are such as may properly be held by the Fund under the
provisions of its governing instruments or Prospectus.
(g) RELIANCE ON INSTRUCTIONS. The Custodian shall be entitled to
rely upon any Instruction, notice or other instrument in
writing received by the Custodian and reasonably believed by
the Custodian to be genuine and to be signed by an Authorized
Person of the Company. Where the Custodian is issued
Instructions orally, the Company acknowledges that if written
confirmation is requested, the validity of the transactions or
enforceability of the transactions authorized by the Company
shall not be affected if such confirmation is not received or
is contrary to oral Instructions given. The Custodian shall be
under no duty to question any direction of an Authorized
Person to review any property held in the account, to make any
suggestions with respect to the investment of the assets in
the account, or to evaluate or question the performance of any
Authorized Person. The Custodian shall not be responsible or
liable for any diminution of value of any securities or other
property held by the Custodian.
7. APPOINTMENT OF SUBCUSTODIANS. The Custodian is hereby authorized to
appoint one or more domestic subcustodians (which may be an affiliate of the
Custodian) qualified under the Act to hold Securities and monies at any time
owned by the Funds; provided however that the appointment of any such
sub-custodian shall not relieve the Custodian of its responsibilities or
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liabilities hereunder. The Custodian is also hereby authorized when acting
pursuant to Instructions to: 1) place assets with any Foreign Custodians located
in a jurisdiction which is not a Selected Country; and 2) place assets with a
broker or other agent as subcustodian in connection with futures, options, short
selling or other transactions which in the case of transactions subject to Rule
17f-6 would be done in compliance with Rule 17f-6. When acting pursuant to such
Instructions, the Custodian shall not be liable for the acts or omissions of any
subcustodian so appointed.
8. OVERDRAFT FACILITY AND SECURITY FOR PAYMENT. In the event that the
Custodian receives Instructions to make payments or transfers of monies on
behalf of a Fund for which there would be, at the close of business on the date
of such payment or transfer, insufficient monies held by the Custodian on behalf
of the Fund, the Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Fund in an amount sufficient to allow the completion of such
payment or transfer. Any Overdraft provided hereunder: (a) shall be payable on
the next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest from the date of the Overdraft to the date of
payment in full by the Fund at a rate agreed upon from time to time, by the
Custodian and the Fund or, in the absence of specific agreement, by such rate as
charged to other customers of Custodian under procedures uniformly applied. The
Custodian and the Company acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt delivery in accordance
with the terms hereof, to meet unanticipated or unusual redemptions, to allow
the settlement of foreign exchange contracts or to meet other unanticipated Fund
expenses. The Custodian shall promptly notify the Funds (an "Overdraft Notice")
of any Overdraft. To secure payment of any Overdraft, each Fund hereby grants to
the Custodian a continuing security interest in and right of setoff against the
Securities and cash in the Fund's account from time to time in the full amount
of such Overdraft. Should the a Fund fail to pay promptly any amounts owed
hereunder, the Custodian shall be entitled to use available cash in the Fund's
account and to liquidate Securities in the account as necessary to meet the
Fund's obligations under the Overdraft. In any such case, and without limiting
the foregoing, the Custodian shall be entitled to take such other actions(s) or
exercise such other options, powers and rights as the Custodian now or hereafter
has as a secured creditor under the Massachusetts Uniform Commercial Code or any
other applicable law.
9. TAX OBLIGATIONS. For purposes of this Agreement, "Tax Obligations"
shall mean taxes, withholding, certification and reporting requirements, claims
for exemptions or refund, interest, penalties, additions to tax and other
related expenses. To the extent that the Custodian has received relevant and
necessary information with respect to a Fund, the Custodian shall perform the
following services with respect to Tax Obligations:
a. the Custodian shall file claims for exemptions or refunds with
respect to withheld foreign (non-U.S.) taxes in instances in which such claims
are appropriate;
b. the Custodian shall withhold appropriate amounts, as required by
U.S. tax laws, with respect to amounts received on behalf of nonresident aliens;
and
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c. the Custodian shall provide to the Fund or the Authorized Person
such information received by the Custodian which could, in the Custodian's
reasonable belief, assist the Fund or the Authorized Person in the submission
of any reports or returns with respect to Tax Obligations. The Fund shall inform
the Custodian in writing as to which party or parties shall receive information
from the Custodian.
The Custodian shall provide such other services with respect to Tax Obligations,
including preparation and filing of tax returns and reports and payment of
amounts due (to the extent funded), as requested by the Fund and agreed to by
the Custodian in writing. The Custodian shall have no independent obligation to
determine the existence of any information with respect to, or the extent of,
any Tax Obligations now or hereafter imposed on the Fund by any taxing
authority. Except as specifically provided herein or agreed to in writing by the
Custodian, the Custodian shall have no obligations or liability with respect to
Tax Obligations, including, without limitation, any obligation to file or submit
returns or reports with any taxing authorities.
ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. DELEGATION. PURSUANT TO RULE 17F-5(B) the Board delegates to the Custodian,
and the Custodian hereby agrees to accept responsibility as the Company's
Foreign Custody Manager for selecting, contracting with and monitoring Foreign
Custodians in those Selected Countries set forth in Appendix C in accordance
with Rule 17f-5(c).
2. CHANGES TO APPENDIX C. Appendix C may be amended by from time to time to add
or delete jurisdictions by written agreement signed by an Authorized Person of
the Company and the Custodian, but the Custodian reserves the right to delete
jurisdictions upon reasonable notice to the Company.
3. REPORTS TO BOARD. The Custodian shall provide written reports notifying the
Board of the placement of Assets with a particular Foreign Custodian and of any
material change in a Fund's foreign custody arrangements. Such reports shall be
provided to the Board quarterly, except as otherwise agreed to by the Custodian
and the Company.
4. MONITORING SYSTEM. In each case in which the Custodian as Foreign Custody
Manager has exercised delegated authority to place Assets with a Foreign
Custodian, the Custodian shall establish a system, to re-assess or re-evaluate
such Foreign Custodians, at least annually in accordance with Rule 17f-5(c)(3)
and to notify the Company immediately if any such Foreign Custodian is
determined by the Custodian to no longer satisfy the requirements of Rule 17f-5
(c).
xiii
5. STANDARD OF CARE. In exercising the delegated authority under this Article II
of the Agreement, the Custodian agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of the
Assets would exercise in like circumstances. Contracts with Foreign Custodians
shall be in writing and shall provide for reasonable care for Assets based on
the standards applicable to Foreign Custodians in the Selected Country and shall
comply with the other requirements of Rule 17f-5(c)(2). In making this
determination, the Custodian shall consider all pertinent factors including
those set forth in Rule 17f-5(c)(1). The Custodian shall be liable for the acts
or omissions for a Foreign Custodian to the same extent as set forth herein with
respect to domestic subcustodians, provided, however, that except as may arise
from the negligence or willful misconduct of the Custodian or a domestic
custodian shall be without liability in respect of Country Risk.
6. USE OF SECURITIES DEPOSITORIES. In exercising its delegated authority, the
Custodian may assume, unless instructed in writing to the contrary by an
Authorized Person, that the Board or the Funds' investment adviser has
determined, pursuant to Rule 17f-7, to place and maintain foreign assets with
any Securities Depository as to which the Custodian has provided the Company
with a Risk Analysis.
ARTICLE III
INFORMATION SERVICES
1. RISK ANALYSIS. The Custodian will provide the Company with a Risk Analysis
with respect to Securities Depositories operating in the countries listed in
Appendix C. If the Custodian is unable to provide a Risk Analysis with respect
to a particular Securities Depository, it will promptly notify the Fund Company.
Each Risk Analysis shall indicate whether the particular Securities Depository
has been determined by the Custodian, in exercise of its standard of care, to be
an Eligible Securities Depository. If a new Securities Depository commences
operation in one of the Appendix C countries, the Custodian will provide the
Company with a Risk Analysis within a reasonably practicable time after such
Securities Depository becomes operational. If a new country is added to Appendix
C, the Custodian will provide the Company with a Risk Analysis with respect to
each Securities Depository in that country within a reasonably practicable time
after the addition of the country to Appendix C.
2. MONITORING. The Custodian will monitor the custody risks associated with
maintaining assets with each Securities Depository for which it has provided the
Company with a Risk Analysis as required under Rule 17f-7. The Custodian will
promptly notify the Company or Funds investment adviser of any material change
in these risks with respect to any Eligible Securities Depository.
3. USE OF AGENTS. The Custodian may employ agents, including, but not limited
to Foreign Custodians, to perform its responsibilities under Sections 1 and 2
above.
xiv
4. EXERCISE OF REASONABLE CARE. The Custodian will exercise reasonable care,
prudence, and diligence in performing its responsibilities under this Article
III. With respect to the Risk Analyses provided or monitoring performed by an
agent, the Custodian will exercise reasonable care in the selection of such
agent, and shall be entitled to rely upon information provided by agents so
selected in the performance of its duties and responsibilities under this
Article III unless the Custodian knows or should have know such information to
be incorrect, incomplete or misleading.
5. LIABILITIES AND WARRANTIES. While the Custodian will take reasonable
precautions to ensure that information provided is accurate, the Custodian shall
have no liability with respect to information provided to it by third parties
unless the Custodian knows or should have known such information to be
incorrect, incomplete or misleading. Due to the nature and source of
information, and the necessity of relying on various information sources, most
of which are external to the Custodian, the Custodian shall have no liability
for direct or indirect use of such information
ARTICLE IV
GENERAL PROVISIONS
1. COMPENSATION.
(a) The Company will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in a separate Fee Schedule which schedule may be
modified by the Custodian upon not less than ninety days prior
written notice to the Company.
(b) The Custodian will xxxx the Company as soon as practicable
after the end of each calendar month. The Company will
promptly pay to the Custodian the amount of such billing.
(c) If not paid directly or timely by the Company, the Custodian
may charge against assets held on behalf of a Fund
compensation and any expenses incurred by the Custodian in the
performance of its duties for such Fund pursuant to this
Agreement. The Custodian shall also be entitled to charge
against assets of a Fund the amount of any loss, damage,
liability or expense incurred with respect to such Fund,
including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. The
expenses which the Custodian may charge include, but are not
limited to, the expenses of domestic subcustodians and Foreign
Custodians incurred in settling transactions.
xv
2. INSOLVENCY OF FOREIGN CUSTODIANS. The Custodian shall be responsible
for losses or damages suffered by a Fund arising as a result of the insolvency
of a Foreign Custodian only to the extent that the Custodian failed to comply
with the standard of care set forth in Article II with respect to the selection
and monitoring of such Foreign Custodian.
3. LIABILITY FOR DEPOSITORIES. The Custodian shall not be responsible
for any losses resulting from the deposit or maintenance of Securities, Assets
or other property of a Fund with a Securities Depository.
4. DAMAGES. Under no circumstances shall the Custodian be liable for
any indirect, consequential or special damages with respect to its role as
Foreign Custody Manager, Custodian or information vendor.
5. INDEMNIFICATION; LIABILITY OF THE COMPANY.
(a) The Company shall indemnify and hold the Custodian harmless
from all liability and expense, including reasonable counsel
fees and expenses, arising out of the performance of the
Custodian's obligations under this Agreement except as a
result of the Custodian's negligence or willful misconduct.
(b) The Company and the Custodian agree that the obligations of
the Company under this Agreement shall not be binding upon any
of the Directors, Trustees, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the
Company, individually, but are binding only upon the assets
and property of the Funds.
6. FORCE MAJEURE. Notwithstanding anything in this Agreement to the
contrary, the Custodian shall not be liable for any losses resulting from or
caused by events or circumstances beyond its reasonable control, including, but
not limited to, losses resulting from nationalization, strikes, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Funds' property; or the breakdown, failure or malfunction of any
utilities or public telecommunications systems; or any order or regulation of
any banking or securities industry including changes in market rules and market
conditions affecting the execution or settlement of transactions; or acts of
war, terrorism, insurrection or revolution; or any other similar event.
7. TERMINATION.
(a) Either party may terminate this Agreement by giving the other
party at least sixty (60) days notice in writing, specifying
the date of such termination.
xvi
(b) In the event notice of termination is given by the Custodian,
the Company shall, on or before the termination date, deliver
to the Custodian a Certificate evidencing the vote of the
Board designating a successor custodian. In the absence of
such designation, the Custodian may designate a successor
custodian, which shall be a person qualified to so act under
the Act or the Company. If the Company fails to designate a
successor custodian, the Company shall, upon the date
specified in the notice of termination, and upon the delivery
by the Custodian of all Securities and monies then owned by
the Funds, be deemed to be its own custodian and the Custodian
shall thereby be relieved of all duties and responsibilities
under this Agreement other than the duty with respect to
Securities held in the Book-Entry System or any Securities
Depository which cannot be delivered to the Company.
(c) Upon termination of the Agreement, the Custodian shall, upon
receipt of a notice of acceptance by the successor custodian,
deliver to the successor all Securities and monies then held
by the Custodian on behalf of the Funds, after deducting all
fees, expenses and other amounts owed to the Custodian.
(d) In the event of a dispute following the termination of this
Agreement, all relevant provisions shall be deemed to continue
to apply to the obligations and liabilities of the parties.
8. INSPECTION OF BOOKS AND RECORDS. The books and records of the
Custodian shall be open to inspection and audit at reasonable times by officers
and auditors employed by the Company at its own expense and with prior written
notice to the Custodian, and by the appropriate employees of the Securities and
Exchange Commission.
9. MISCELLANEOUS.
(a) APPENDIX A is a Certificate signed by the Secretary of the
Fund setting forth the names and the signatures of Authorized
Persons. The Company shall furnish a new Certificate when the
list of Authorized Persons is changed in any way. Until a new
certification is received, the Custodian shall be fully
protected in acting upon Instructions from Authorized Persons
as set forth in the last delivered Certificate.
(b) Any required written notice or other instrument shall be
sufficiently given if addressed to the Custodian or the
Company as the case may be and delivered to it at its offices
at:
xvii
The Custodian:
Boston Safe Deposit and Trust Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: ____________________________
The Company
The Gabelli Value Fund
Xxx Xxxxxxxxx Xxxxxx
Xxx, XX 00000
Attn: General Counsel________________
or at such other place as the parties may from time to time designate to the
other in writing.
(c) The Custodian shall provide the Company at such time as the
Company may reasonably request with reports by independent
public accountants and procedures for safe guarding Assets in
sufficient scope and detail to provide reasonable assurance
that any material inadequacies would be disclosed.
(d) This Agreement may not be amended or modified except by a
written agreement executed by both parties.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
by the Company without the written consent of the Custodian,
or by the Custodian without the written consent of the Company
authorized or approved by a vote of the Board, provided,
however, that the Custodian may assign the Agreement or any
function thereof to any corporation or entity which directly
or indirectly is controlled by, or is under common control
with, the Custodian and any other attempted assignment without
written consent shall be null and void.
xviii
(f) Nothing in this Agreement shall give or be construed to give
or confer upon any third party any rights hereunder.
(g) The Custodian represents that it is a U.S. Bank within the
meaning of paragraph (a)(7) of Rule 17f-5.
(h) The Company acknowledges and agrees that, except as expressly
set forth in this Agreement, the Company is solely responsible
to assure that the maintenance of the Funds' Securities and
cash hereunder complies with applicable laws and regulations,
including without limitation the Act and applicable
interpretations thereof or exemptions therefrom. The Company
represents that it has determined that it is reasonable to
rely on the Custodian to perform the responsibilities
delegated pursuant to this Agreement.
(i) This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts.
(j) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
(k) Each party represents to the other that it has all necessary
power and authority, and has obtained any consent or approval
necessary to permit it, to enter into and perform this
Agreement and that this Agreement does not violate, give rise
to a default or right of termination under or otherwise
conflict with any applicable law, regulation, ruling, decree
or other governmental authorization or any contract to which
it is a party or by which any of its assets is bound.
(l) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
(m) SEC Rule 14b-2 requires banks which hold securities for the
account of customers to respond to requests by issuers of
securities for the names, address and holdings of beneficial
owners of securities of that issuer held by the bank unless
the beneficial owner has expressly objected to disclosure of
this information. In order to comply with the rule, the
Custodian needs the Company to indicate whether it authorizes
the Custodian to provide a Fund's name, address, and share
position to requesting companies whose securities the Fund
owns. If a fund tells the Custodian "no", the Custodian will
not provide this information to requesting companies.
xix
If a Fund tells the Custodian "yes" or does not check either
"yes" or "no" below, the Custodian is required by the rule to
treat the Fund as consenting to disclosure of this information
for all securities owned by the Fund or any funds or accounts
established by the Fund. For the Funds protection, the Rule
prohibits the requesting company from using a Funds' name and
address for any purpose other than corporate communications.
Please indicate below whether the Company consents or objects
by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Funds' name,
address, and share positions.
NO [X ] The Custodian is not authorized to release the Funds' name,
address, and share positions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives duly authorized as of the day and year first
above written.
THE GABELLI VALUE FUND
By: /S/ XXXXX X. XXXXXX
Name: Xxxxx Xxxxxx
Title: Vice President and Treasurer
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: /S/ XXXXXXXXXXX XXXXX
Name: Xxxxxxxxxxx Xxxxx
Title: First Vice President
xx
APPENDIX A
LIST OF AUTHORIZED PERSONS
The Gabelli Value Fund, a business trust organized under the laws of the
State of Delaware does hereby certify that:
The following individuals have been duly authorized as Authorized
Persons to give Instructions on behalf of the Company Funds and the specimen
signatures set forth opposite their respective names are their true and correct
signatures:
NAME SIGNATURE
-------------------------
-------------------------
-------------------------
-------------------------
-------------------------
-------------------------
-------------------------
-------------------------
By:
--------------------------------
Secretary
Dated:
xxi
APPENDIX C
SELECTED COUNTRIES
Argentina Luxembourg
Australia Malaysia
Austria Mauritius
Bangladesh Mexico
Belgium Morocco
Bermuda Namibia
Bolivia The Netherlands
Botswana New Zealand
Brazil Norway
Canada Pakistan
Chile Panama
China/Shenzhen Peru
China The Philippines
Columbia Poland
Costa Rica* Portugal
Croatia Romania
Czech Republic Russia*
Denmark Singapore
Ecuador Slovakia
Egypt Slovenia
Estonia South Africa
Finland Spain
France Sri Lanka
Germany Sweden
Ghana Switzerland
Greece Taiwan
Hong Kong Thailand
Hungray Trinidad*
India Tunisia*
Indonesia Turkey
Ireland United Kingdom
Israel Uruguay
Italy Venezuela
Japan Vietnam
Jordan Zambia
Kenya Zimbabwe
Korea, Republic of
xxii
"*Note, Custodian will not act as a Foreign Custody Manager with respect to
assets held in this country. Holding assets and use of Mellon's usual
subcustodian in this country is subject to Instructions by the Company and its
execution of a separate letter-agreement pertaining to custody and market
risks."
APPENDIX D
ANCILLARY INFORMATION SERVICES AGREEMENT
Until the Custodian provides a Risk Analysis pursuant to Article III of
the Agreement with respect to a Securities Depositories operating in such
country a particular country as set forth on Appendix C, the following sets
forth our agreement with respect to the delivery of certain information to the
Board or its agents as requested by the Board from time to time. These terms
shall control over the provisions of Article III of this Agreement but shall
cease to apply as to any country for which Custodian provides a Risk Analysis
for one or more Securities Depositories operating therein. Otherwise, unless
continued as provided below, these provisions shall expire on July 2, 2001.
After expiration, the information set forth in Sections 2, A and B
below may be provided as agreed upon from time to time in writing between the
Company and the Custodian subject to Section 3 hereof.
1. PROVISION OF INFORMATION. In accordance with the provisions of this
Information Services Agreement, the Custodian agrees to provide to the Board, or
at the direction of the Board, the Funds' investment advisers, the information
set forth in Section 2, below, with respect to Foreign Custodians and Securities
Depositories which hold Securities, Assets, or other property of the Fund and
the systems and environment for securities processing in the jurisdiction in
which such Foreign Custodians or Securities Depositories are located. The
Custodian shall provide only that portion of such information as is reasonably
available to it.
2. INFORMATION TO BE PROVIDED.
A. COUNTRY INFORMATION
o Settlement Environment
o Depository
o Settlement Period
o Trading
o Security Registration
o Currency
o Foreign Investment Restrictions
o Entitlements
o Proxy Voting
o Foreign Taxation
xxiii
B. SUBCUSTODIAN INFORMATION
o Financial Information
o Regulator
o External Auditor
o How Securities are Held
o Operational Capabilities
o Insurance Coverage
C. DEPOSITORY INFORMATION (IF APPLICABLE TO THE COUNTRY)
o Name
o Information relative to Determining Compulsory or Voluntary Status
of the Facility
o Type of Entity
o Ownership Structure
o Operating History
o Eligible Instruments
o Security Form
o Financial Data
o Regulator
o External Auditor
D. INFORMATION ON THE FOLLOWING LEGAL QUESTIONS
o Would the applicable foreign law restrict the access afforded the
independent public accountants of the Fund to books and records kept
by a Foreign Custodian?
o Would the applicable foreign law restrict the ability of the Fund to
recover its assets in the event of bankruptcy of the Foreign
Custodian?
o Would the applicable foreign law restrict the ability of the Fund to
recover assets that are lost while under the control of the Foreign
Custodian?
o What are the foreseeable difficulties in converting the Fund's cash
into U.S. dollars?
xxiv
3. LIABILITY AND WARRANTIES. While the Custodian will take reasonable
precautions to ensure that information provided is accurate the Custodian shall
have no liability with respect to information provided to it by third parties
unless the Custodian knows or should have known such information to be
incorrect, incomplete or misleading. Due to the nature and source of
information, and the necessity of relying on various information sources, most
of which are external to the Custodian, the Custodian shall have no liability
for direct or indirect use of such information. The Custodian makes no other
warranty or representation, either express or implied, as to the merchantability
or fitness for any particular purpose of the information provided under this
Appendix D
Acknowledged:
/s/ Xxxxx Xxxxxx /s/ Xxxxxxxxxxx Xxxxx
XXXXX XXXXXX XXXXXXXXXXX XXXXX
Fund Custodian
xxv
