CUSTODIAN CONTRACT
between
THE MALLARD FUND, INC.
and
MELLON BANK, N.A.
TABLE OF CONTENTS
Page
I. Employment of Custodian and Property to be Held by It..................1
II. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian.............................................1
A. Holding Securities...............................................1
B. Delivery of Securities...........................................1
C. Registration of Securities.......................................3
D. Bank Accounts....................................................3
E. Investment and Availability of Federal Funds.....................3
F. Collection of Income.............................................4
G. Payment of Fund Moneys...........................................4
H. Liability for Payment in Advance of Receipt of Securities
Purchased........................................................5
I. Appointment of Agents............................................5
J. Deposit of Fund Assets in Securities Systems.....................5
K. Segregated Accounts..............................................7
L. Ownership Certificates for Tax Purposes..........................7
M. Proxies..........................................................7
N. Communications Relating to Fund Portfolio Securities.............7
O. Proper Instructions..............................................8
P. Actions Permitted Without Express Authority......................8
Q. Evidence of Authority............................................9
III. Duties of Custodian with Respect to Books of Account and
Calculation of Net Asset Value and Net Income..........................9
IV. Records................................................................9
V. Reports................................................................9
VI. Opinion of Fund's Independent Accountant..............................10
VII. Reports to Fund by Independent Public Accountants.....................10
VIII. Compensation of Custodian.............................................10
IX. Responsibility of Custodian...........................................10
X. Effective Period, Termination and Amendment...........................11
XI. Successor Custodian...................................................11
XII. Directors.............................................................12
XIII. Pennsylvania Law to Apply.............................................12
XIV. Acknowledgment of Brokerage Services..................................12
CUSTODIAN CONTRACT
This Contract between The Mallard Fund, Inc., a Maryland corporation,
(herein after called the "Fund"), and Mellon Bank, N.A., a national banking
association, (hereinafter called the "Custodian"),
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows .
I. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Articles of Incorporation. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of common stock
("Shares") of the Fund as may be issued or sold from time to time. The Custodian
shall not be responsible for any property of the Fund held or received by the
Fund and not delivered to the Custodian.
The Custodian may from time to time employ one or more sub-custodians,
provided that the employment of any sub-custodian shall not relieve the
Custodian of any of its responsibilities or liabilities hereunder.
II. Duties of the Custodian with Respect to Property of the Fund Held by
the Custodian
A. Holding Securities
The Custodian shall hold, earmark and physically segregate for the account
of the Fund all non-cash property, including all securities owned by the
Fund, other than securities which are maintained pursuant to Section J of
this Article II 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 Systems."
B. Delivery of Securities
The Custodian shall release and deliver securities owned by the Fund held
by the Custodian or in a Securities System account of the Custodian 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 Fund 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 Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section J hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Fund;
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 Fund 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 I of this Article II or into the name or nominee
name of any sub-custodian appointed pursuant to Article I; 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) To the broker selling the same for examination in accordance with
the "street delivery" custom; provided that the Custodian shall
adopt such procedures, as the Fund from time to time shall approve,
to ensure their prompt return to the Custodian by the broker in the
event the broker elects not to accept them;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of 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
Fund, but only against receipt of adequate collateral, as agreed
upon from time to time by the Custodian and the Fund, which may be
in the form of cash or obligations issued by the United States
government, its agencies or instrumentalities or a letter of credit.
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, against receipt of
amounts borrowed;
12) For any other proper corporate purposes, but only upon receipt of,
in addition to proper instructions, a certified copy of a resolution
of the Board of Directors signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purposes to be proper
corporate purposes, and naming the person or persons to whom
delivery of such securities shall be made.
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C. Registration of Securities
Securities held by the Custodian (other than bearer securities) shall be
registered in the name of the Fund, or in the name of any nominee of the
Fund, or of any nominee of the Custodian, provided the Custodian maintains
a mechanism for identifying all securities belonging to the Fund, wherever
held or registered, or in the name or nominee name of any agent appointed
pursuant to Section I of Article II hereof or in the name or nominee name
of any sub-custodian appointed pursuant to Article I. A11 securities
accepted by the Custodian on behalf of the Fund under the terms of this
Contract shall be in "street name" or other good delivery form.
D. Bank Accounts
The Custodian shall open and maintain a separate bank account or accounts
in the name 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 Fund, other than cash maintained by
the Fund in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund 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
("1940 Act"). Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in
that capacity.
E. Investment and Availability of Federal Funds
Upon mutual agreement between the Fund and the Custodian, the Custodian
shall, upon the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such instruments as may be set forth in such
instructions, on the same day as received, all federal funds
received after a time agreed upon between the Custodian and the
Fund; and
2) make federal funds available to the Fund 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 the Fund which
are deposited into the Fund's account.
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F. Collection of Income
The Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to which the
Fund shall be entitled either by law or pursuant to custom in the
securities business and shall collect on a timely basis all income and
other payments with respect to bearer securities if, on the date of
payment by the Issuer, such securities are held by the Custodian or agent
thereof and shall promptly credit such income, as collected, to the Fund'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.
G. Payment of Fund Moneys
Upon receipt of proper instructions, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out moneys
of the Fund in the following cases only:
1) Upon the purchase of securities for the account of the Fund, but
only (a) against the delivery of such securities to the Custodian
(or any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act to act
as a custodian and has been designated by the Custodian as its agent
for this purpose) registered in the name of the Fund or in the name
of a nominee of the Custodian referred to in Section C of Article II
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 J of Article II hereof or; (c) in
the case of repurchase agreements entered into between the Fund and
the Custodian, or another bank, (i) against delivery of securities
either in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such securities
and (ii) against delivery of the receipt evidencing purchase by the
Fund of securities owned by the Custodian or other bank along with
written evidence of the agreement by the Custodian or other bank to
repurchase such securities from the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section B of Article
II hereof;
3) For the payment of any expense or liability incurred, by the Fund,
including but not limited to the following payments for the account
of the Fund: interest, dividend disbursements, taxes, trade
association dues, advisory, administration, 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;
4) For the payment of any dividends declared pursuant to the
governing documents of the Fund; and
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5) For any other proper corporate purposes, but only upon receipt of,
in addition to proper instructions, a certified copy of a resolution
of the Board of Directors 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 corporate purpose, and naming the person or persons to whom
such payment is to be made.
H. Liability for Payment in Advance of Receipt of Securities
Purchased
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific written instructions from
the Fund 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, except that in the case of repurchase
agreements entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to the account of
such bank prior to the receipt of (i) written evidence that the securities
subject to such repurchase agreement have been transferred by book-entry
into a segregated non-proprietary account of the Custodian maintained with
The Federal Reserve Bank of Philadelphia or the safekeeping receipt and
(ii) the repurchase agreement, provided that such written evidence or
documents are received prior to the close of business on the same day.
I. 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 1940 Act to act as a custodian, as its agent to carry
out such of the provisions of this Article II as the Custodian may from
time to time direct; provided, however, that the appointment of any agent
shall not relieve the Custodian of any of its responsibilities or
liabilities hereunder.
J. Deposit of Fund Assets in Securities Systems
The Custodian may deposit and/or maintain securities owned by the Fund in
a clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities Systems" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers.
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2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund 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 Fund. The Custodian
shall transfer securities sold for the account of the Fund 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 Fund. Copies of all advices from
the Securities System of transfers of securities for the account of
the Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Fund at its request. The Custodian
shall furnish the Fund confirmation of each transfer to or from the
account of the Fund in the form of a written advice or notice and
shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the
account of the Fund on the next business day;
4) The Custodian shall have received the initial certificate
required by Article IX hereof:
5) The Custodian shall provide the Fund 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;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund 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 any 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 Fund has not
been made whole for any such loss or damage. The Custodian shall be
subject to the same liability with respect to all securities of the
Fund, and all cash, stock dividends, rights and items of like nature
to which the Fund is entitled, held or received by such securities
systems as if the same were held or received by the Custodian at its
own office.
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K. Segregated Accounts
The Custodian shall upon receipt of Proper Instructions establish and
maintain a segregated account or accounts for and on behalf of the Fund,
into which account or accounts may be transferred cash and/or securities,
including securities maintained in an account by the Custodian pursuant to
Section J hereof, (i) in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association
of Securities Dealers, Inc. (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 connections with
transactions by the Fund, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the
Fund 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) as mutually agreed upon from time
to time in writing by the Custodian and the Fund.
L. Ownership Certificates for Tax Purposes
The Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection with
receipt of income or other payments with respect to securities of the Fund
held by it and in connection with transfers of securities.
M. Proxies
The Custodian shall, with respect to the securities held by it hereunder,
promptly deliver to the Fund all proxies, all proxy soliciting materials
and all notices relating to such securities without indication of the
manner in which such proxies are to be voted.
N. Communications Relating to Fund Portfolio Securities
The Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith) received by
the Custodian from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, the Custodian, shall transmit
promptly to the Fund all written information received by the Custodian
from issuers of the securities whose tender or exchange is sought and from
the party (or his agents) making the tender or exchange offer. If the Fund
desires to take action with respect to any tender offer, exchange offer or
any other similar transaction, the Fund shall notify the Custodian at
least three business days prior to the date on which the Custodian is to
take such action.
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O. Proper Instructions
The term "proper instructions" means instructions from the Fund in respect
of any of the Custodian's duties hereunder which have been received by the
Custodian: (a) in writing (including, without limitation, facsimile
transmission) or by tested telex signed or given by such one or more
person or persons as the Fund shall have from time to time authorized to
give the particular class of proper instructions in question and whose
name and (if applicable) signature and office address have been filed with
the Custodian; (b) a telephonic or oral communication by one or more
persons as the Fund shall have from time to time authorized to give the
particular class of proper instructions in question and whose name has
been filed with the Custodian; or (c) upon receipt of such other form of
proper instructions as the Fund may from time to time authorize in writing
and which the Custodian agrees to accept. Proper instructions in the form
of oral communications shall be confirmed by the Fund by tested telex or
writing in the manner set forth in clause (a) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral proper instructions prior to the Custodian's
receipt of such confirmation.
The Custodian shall have the right to assume in the absence of notice to
the contrary from the Fund that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Fund to give
the proper instructions in question and that such authorization has not
been revoked. The Custodian may act upon, and conclusively rely upon,
without any liability to the Fund or any other person or entity for any
losses resulting therefrom, any proper instructions reasonably believed by
it to be furnished by the proper person or persons as provided above.
P. Actions Permitted Without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
contract, provided that all such payments shall be accounted for to
the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, 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 Fund except as
otherwise directed by the Board of Directors of the Fund.
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Q. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper reasonably
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 Articles of Incorporation 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.
III. Duties of Custodian with Respect to 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 to keep the books of
account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund and/or compute the daily net income of the Fund.
If directed in writing to do so by the Fund, which direction shall be
transmitted to the Custodian reasonably in advance of the date on which it is to
act, the Custodian shall itself keep such books of account and/or compute such
net asset value per share and/or compute the daily net income of the Fund and
shall, upon such written direction, compute daily the Fund's interest received
and accrued, short-term gains and losses realized upon sale of securities,
long-term gains and losses realized upon sale of securities, and unrealized
gains and losses on portfolio securities. If so instructed in writing, which
written instructions shall be transmitted to the Custodian reasonably in advance
of the date on which it is to act, the Custodian shall supply quotations for all
portfolio securities of the Fund to the entity or entities appointed by the
Board of Directors to compute the net asset value per share of the outstanding
shares of the Fund on each day on which such net asset value per share is to be
computed as stated in the Fund's currently effective Registration Statement.
IV. Records
The Custodian shall 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 and the rules
and regulations thereunder, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, applicable federal and state tax laws and any
other law or administrative rules or procedures which may be applicable to the
Fund. All such records shall be the property of the Fund and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission.
V. Reports
The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by the Fund 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.
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VI. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund 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-2 and the Fund's Form N-SAR or other
annual or semi-annual reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission.
VII. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this contract;
such reports, which 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, shall state in detail material
inadequacies disclosed by such examination, and, if there are no such
inadequacies, shall so state.
VIII. Compensation of Custodian
The Custodian shall be entitled to receive annual compensation for its
services hereunder in accordance with its schedule attached as Exhibit A to this
Contract. Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Exhibit A to this Contract a revised fee schedule, dated and
signed by an authorized representative of each party hereto.
The Fund shall reimburse the Custodian for all out-of-pocket expenses
reasonably incurred hereunder.
IX. 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 entitled to rely on and may act upon advice of
counsel (who may be counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
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The Custodian shall be held to the exercise of reasonable care in carrying
out the provisions of this Contract. The Custodian shall be liable for all acts
and omissions of agents (including subcustodians) as if the Custodian performed
the act or omission itself. The Fund shall indemnify the Custodian and hold it
harmless from and against all claims, liabilities, and expenses (including
attorneys' fees) which the Custodian may suffer or incur on account of being
Custodian hereunder except such claims, liabilities and expenses arising from
the Custodian's own negligence or bad faith. Notwithstanding the foregoing,
nothing contained in this paragraph is intended to nor shall it be constructed
to modify the standards of care and responsibility set forth in Article I hereof
with respect to sub-custodians and in Section J(6) of Article II hereof with
respect to Securities Systems.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the reasonable opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
X. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid, to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
however, that the Custodian shall not act under Section J of Article II hereof
in the absence of receipt of an initial certificate from the Fund that the
Directors of the Fund have approved the initial use of a particular Securities
System, as required by Rule 17f-4 under the 1940 Act; provided further, however,
that the Fund shall not amend or terminate the Contract in contravention of any
applicable federal or state regulations, or any provision of the Articles of
Incorporation, and, further provided, that the Fund may at any time by action of
its 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 shall reimburse the Custodian
for those costs, expenses and disbursements that are due as of the date of such
termination.
XI. Successor Custodian
If a successor custodian is appointed by the 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 and other assets of the Fund then held by it hereunder. The Custodian
shall also deliver to such successor custodian copies of such books and records
relating to the Fund as the Fund and Custodian may mutually agree.
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If no such successor custodian is appointed, the Custodian shall, in like
manner, upon receipt of a certified copy of a vote of the Directors of the Fund,
deliver at the office of the Custodian 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 doing business in Pittsburgh, Pennsylvania of its own selection, having
an aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract.
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 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.
XII. Directors
All references to actions of or by Directors or herein shall require
action by such Directors acting as a board or a formally constituted group and
not individually.
XIII. Pennsylvania Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Pennsylvania.
XIV. Acknowledgment of Brokerage Services
The Fund acknowledges that it may execute purchases and sales through a
brokerage service affiliated with the Custodian at the affiliate's regular
institutional rates so long as that service provides competitive execution. The
Fund acknowledges that any broker or dealer executing transactions on behalf of
the Fund may receive commissions that are reasonable in relation to the value of
the brokerage and/or research services provided.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on behalf by its duly authorized representative as of
the 28th day of May, 1997.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice-President
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary, The Mallard Fund, Inc.
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Exhibit A
THE MALLARD FUND, INC.
CUSTODIAN FEE SCHEDULE
Custody Services
Structural Charges
Unitization (if required) $3,000 per
unitization
Active manager Account $3,000 per account
Cash Account $ 500 per account
Passive/Line Item Account $1,500 per account
Asset-Based Charges
Domestic Custody 1.00 basis point
Global custody-Developed Markets 9.00 basis points
Developed markets include: Austria, Australia, Belgium, Canada, Cedel,
Euroclear, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
Korea, Mexico, Netherlands, New Zealand, Norway, Philippines, Singapore,
Spain, Sweden, Switzerland, Thailand, United Kingdom
Global Custody-Intermediate Markets 30.0 basis points
Intermediate markets include: Argentina, Indonesia, Malaysia, Portugal,
Shanghai, Shenzen, Sri Lanka
Global Custody-Emerging Markets 50.0 basis points
Emerging markets include: Brazil, Cyprus, Greece, India, Israel,
Jordan, Luxembourg, Pakistan, Peru, Poland, Trinidad/Tobago, Turkey,
Venezuela, and other emerging markets
Transaction Charges
U.S. Depository Transaction $15 per transaction
U.S. Physical Transaction $25 per transaction
Developed Market Transaction $25 per transaction
Intermediate Market Transaction $60 per transaction
Emerging Market Transaction $85 per transaction
Futures Transaction $25 per transaction
Options round-trip $40 per transaction
Other Fees
Wire Transfer $10 per wire
International Wire Transfer $40 per wire
Margin variation wire $15 per wire
Foreign exchange transaction $30 per transaction
(executed outside Mellon)
Establish Futures Broker $2,000 per agreement
Agreement (if boilerplate not used)
Fee Footnotes
Mellon will pass through to the client any out-of pocket expenses,
including, but not limited to, postage, courier expense, registration
fees, stamp duties, telex charges, custom reporting or custom programming,
internal/external tax, legal and consulting costs, proxy voting expenses,
etc.
The above fees do not contemplate securities lending.
Mellon reserves the right to amend its fees consistent with Article VIII
of this Contract.
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