MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
UNITED STATES TRUST COMPANY OF NEW YORK
July 22, 1994
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
Table of Contents
Section/Paragraph Page
1. Appointment 1
2. Delivery of Documents 1
3. Definitions 2
4. Delivery and Registration of the Property 3
5. Voting Rights 4
6. Receipt and Disbursement of Money 4
7. Receipt of Securities 5
8. Use of Securities Depository or the Book-Entry System 5
9. Foreign Sub-Custody Arrangements 6
10. Instructions Consistent With The Charter, etc. 7
11. Transactions Not Requiring Instructions 8
12. Transactions Requiring Instructions 11
13. Repurchase Agreement Transactions 12
14. Purchase of Securities 12
15. Sales of Securities 13
16. Records 13
17. Cooperation with Accountants 14
18. Confidentiality 14
19. Equipment Failures 14
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
Table of Contents continued
Section/Paragraph Page
20. Right to Receive Advice 14
21. Compliance with Governmental Rules and Regulations 15
22. Compensation 15
23. Indemnification 15
24. Responsibility of U.S. Trust 17
25. Collection 18
26. Duration and Termination 18
27. Notices 18
28. Further Actions 19
29. Amendments 19
30. Miscellaneous 19
Signatures 20
Attachment A - Portfolios Covered by This Agreement
Attachment B - Fees and Expenses
Attachment C - Authorized Persons
Attachment D - Authorized Brokers
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MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of July 22, 1994, by and between MAS FUNDS on
behalf of certain of its portfolio series, a Pennsylvania business trust (the
"Fund"), and UNITED STATES TRUST COMPANY OF NEW YORK, a New York State chartered
bank and trust company ("U.S. Trust").
WITNESSETH:
WHEREAS, the Fund is registered as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain U.S. Trust to serve as the Fund's
custodian for the assets of the portfolios of the Fund listed in Attachment A
hereto, and to retain U.S. Trust to arrange for Xxxxxx Xxxxxxx Trust Company
("Xxxxxx Xxxxxxx") or its successor to serve as the Fund's sub-custodian for
its assets held outside the United States pursuant to an agreement between U.S.
Trust and Xxxxxx Xxxxxxx, and U.S. Trust is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints U.S. Trust to act as custodian
of its portfolio securities, cash and other property on the terms set forth in
this Agreement. U.S. Trust accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 20 of this Agreement.
2. Delivery of Documents. The Fund will promptly furnish to U.S. Trust
such copies, properly certified or authenticated, of contracts, documents and
other related information as U.S. Trust may request or require to properly
discharge its duties, including but not limited to the following:
(a) Resolutions of the Fund's Board of Trustees ("Board") authorizing
the appointment of U.S. Trust as Custodian of the portfolio securities, cash and
other property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and containing
the signatures of the Fund's officers and/or the persons authorized to sign
Written Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Declaration of Trust and all amendments thereto (such
Declaration of Trust, as currently in effect and as they shall from time to time
be amended, are herein called the "Charter");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(e) Resolutions of the Fund's Board and/or the Fund's shareholders
approving the Investment Advisory and Management Agreement between the Fund and
the Fund's investment adviser (the "Advisory Agreement");
(f) The Advisory Agreement; and
(g) The Fund's Registration Statement on Form N-1A under the 1940 Act
and the Securities Act of 1933, as amended ("xxx 0000 Xxx"), as filed with, and
declared effective by, the Securities and Exchange Commission (the "SEC") and
all exhibits, amendments and supplements thereto, including any opinion of
counsel for the Fund with respect to the validity of the shares of the Fund (the
"Shares") and the status of such Shares under the 1933 Act as registered with
the SEC and under any other applicable federal law or regulation.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means the Fund's President, Vice-President Treasurer and any
other person, whether or not any such person is an officer or employee of the
Fund, duly authorized by the Board to give Written Instructions on behalf of the
Fund and listed on Attachment B hereto, which may be amended from time to time.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Property". The term "Property", as used in this Agreement, means:
(i) any and all securities, cash, and other property of the Fund
which the Fund may from time to time deposit, or cause to be
deposited, with U.S. Trust, or a subcustodian, which U.S. Trust, or
the subcustodian, may from time to time hold for the Fund;
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(ii) all income in respect of any such securities or other
property;
(iii) all proceeds of the sales of any of such securities or
other property; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by U.S. Trust, or a subcustodian, from time to
time from or on behalf of the Fund.
(d) "Securities Depository". As used in this Agreement the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC, or its successor or successors and its nominee
or nominees; and shall also mean any other registered clearing agency, its
successor or successors, specifically identified in a certified copy of a
resolution of the Fund's Board approving deposits by U.S. Trust therein.
(e) U.S. Trust "Asset Management System" (AMS) means U.S. Trust's
recordkeeping and reporting system.
(f) "Written Instructions". Means instructions
(i) delivered by mail, tested telegram, cable, telex or facsimile
sending device, and received by U.S. Trust, signed by an Authorized
Person or by a person reasonably believed by U.S. Trust to be an
Authorized Person; or
(ii) transmitted electronically through the U.S. Trust Asset
Management System or any similar electronic instruction system
acceptable to U.S. Trust.
4. Delivery and Registration of the Property. The Fund will deliver or
cause to be delivered to U.S. Trust all Property owned by it which is held
within the United States, including cash received for the issuance of its
Shares, at all times during the period of this Agreement, except for securities
and monies to be delivered to any subcustodian appointed pursuant to Paragraph 7
hereof. U.S. Trust will not be responsible for such securities and such monies
until actually received by U.S. Trust or by any subcustodian. All securities
delivered to U.S. Trust or to any such subcustodian (other than in bearer form)
shall be registered in the name of the Fund or in the name of a nominee of the
Fund or in the name of U.S. Trust or any nominee of U.S. Trust (with or without
indication of fiduciary status) or in the name of any subcustodian or any
nominee of such subcustodian appointed pursuant to Paragraph 7 hereof or shall
be properly endorsed and in form for transfer satisfactory to U.S. Trust.
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5. Voting Rights. With respect to all securities owned by the Fund,
however registered. it is understood that the voting and other rights and powers
of such securities shall be exercised bv the Fund. U.S. Trust's only duty shall
be to mail to the Fund any documents received, including proxy statements and
offering circulars, with any proxies for securities registered in a nominee name
executed by such nominee. Where warrants, options, tenders or other securities
have fixed expiration dates, the Fund understands that in order for U.S. Trust
to act, U.S. Trust must receive the Fund's instructions at its offices in New
York City, addressed as U.S. Trust may from time to time request, by no later
than noon (New York City time) at least one business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as
permits the Fund a reasonable period of time in which to respond after U.S.
Trust notifies the Fund of such date or time). Absent U. S. Trust's timely
receipt of such instructions, such instruments will expire without liability to
U.S. Trust.
6. Receipt and Disbursement of Money.
(a) U.S. Trust shall open and maintain a custody account for the Fund
(the "Account") subject only to draft or order by U.S. Trust acting pursuant to
the terms of this Agreement, and shall hold in such Account, subject to the
provisions hereof, all cash received by it from or for the Fund. U.S. Trust
shall make payments of cash to, or for the account of, the Fund from such cash
only (i) for the purchase of securities for the Fund as provided in paragraph 12
hereof, (ii) upon receipt of Written Instructions for the payment of dividends
or other distributions of shares, or for the payment of interest, taxes,
administration, distribution or advisory fees or expenses which are to be borne
by the Fund under the terms of this Agreement, any Advisory Agreement, or any
administration agreement of the Fund; (iii) upon receipt of Written Instructions
for payments in connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Fund and held by or to be delivered to
U.S. Trust; (iv) to a subcustodian pursuant to Paragraph 7 hereof; or (v) upon
receipt of Written Instructions for other Fund business purposes.
(b) U.S. Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian for the
Fund.
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7. Receipt of Securities.
(a) Except as provided by Paragraph 8 hereof, U.S. Trust shall hold all
securities and non-cash Property received by it for the Fund. All such
securities and non-cash Property are to be held or disposed of by U.S. Trust for
the Fund pursuant to the terms of this Agreement. In the absence of Written
Instructions accompanied by a certified resolution authorizing the specific
transaction by the Fund's Board, U.S. Trust shall have no power or authority to
withdraw, deliver, assign, hypothecate, pledge or otherwise dispose of any such
securities and non-cash Property, except in accordance with the express terms
provided for in this Agreement. In connection with its duties under this
Paragraph 7, U.S. Trust may, at its own expense, enter into subcustodian
agreements with other U.S. banks or trust companies for the receipt of certain
securities and cash to be held by U.S. Trust for the account of the Fund
pursuant to this Agreement; provided that each such bank or trust company has an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than twenty million dollars ($20,000,000) and that such bank
or trust company agrees with U.S. Trust to comply with all relevant provisions
of the 1940 Act and applicable rules and regulations thereunder.
(b) Promptly after the close of business on each day, U.S. Trust shall
furnish the Fund with confirmations and a summary of all transfers to or from
the account of the Fund during said day. Where securities are transferred to the
account of the Fund established at a Securities Depository or the Book Entry
System pursuant to Paragraph 8 hereof, U.S. Trust shall also by book-entry or
otherwise identify as belonging to the Fund the quantity of securities that
belong to the Fund that are part of a fungible bulk of securities registered in
the name of U.S. Trust (or its nominee) or shown in U.S. Trust's account on the
books of a Securities Depository or the Book-Entry System. From time to time,
and at least once monthly, U.S. Trust shall furnish the Fund with a detailed
statement of the Property held for the Fund under this Agreement. U.S. Trust
shall provide such other periodic reports as the Fund may reasonably request.
8. Use of Securities Depository or the Book-Entry System. The Fund
authorizes U.S. Trust, on a continuous and ongoing basis until instructed to the
contrary by Written Instructions actually received by U.S. Trust (i) to deposit
in a Securities Depository or the Book-Entry System all securities of the Fund
eligible for deposit therein and (ii) to utilize a Securities Depository or the
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Book-Entry System to the extent possible in connection with the performance of
its duties hereunder, including without limitation, settlements of purchases
and sales of securities by the Fund, and deliveries and returns of securities
collateral in connection with borrowings. Without limiting the generality of
such use, it is agreed that the following provisions shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities
Depository or the Book-Entry System will at all times be segregated from any
assets and cash controlled by U.S. Trust in other than a fiduciary or custodian
capacity but may be commingled with other assets held in such capacities. U.S.
Trust will effect payment for securities and receive and deliver securities in
accordance with accepted industry practices in the place where the transaction
is settled, unless the Fund has given U.S. Trust Written Instructions to the
contrary.
(b) All Books and records maintained by U.S. Trust which relate to the
Fund's participation in a Securities Depository or the Book-Entry System will at
all times during U,.S. Trust's regular business hours be open to the inspection
of the Fund's duly authorized employees or agents, and the Fund will be
furnished with all information in respect of the services rendered to it as it
may require.
(c) U.S. Trust shall be liable to the Fund for any loss or damage to
the Fund resulting from errors of which the Book-Entry System informs U.S. Trust
or its agents or employees.
9. Foreign Sub-Custody Arrangements, U.S. Trust has entered into a
separate international custodian agreement with Xxxxxx Xxxxxxx governing the
custody of the foreign securities of the Fund (the "International Custodian
Agreement"). Under the International Custodian Agreement, Xxxxxx Xxxxxxx will
serve as custodian and will receive, safeguard and deliver the Fund's foreign
securities which U.S. Trust causes to be deposited with Xxxxxx Xxxxxxx from time
to time. U.S. Trust agrees that, as a precondition to the deposit of each
foreign security of the Fund with Xxxxxx Xxxxxxx pursuant to the International
Custody Agreement, U.S. Trust must ascertain that Xxxxxx Xxxxxxx has entered
into a written contract with each foreign subcustodian to be used thereunder
which provides in substance that, as a "Customer" under the International
Custodian Agreement:
(a) the Fund will be adequately insured or indemnified in the event of
loss;
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(b) the Fund's assets will not be subject to any claim by the foreign
subcustodian or its creditors except a claim for payment for
custody or administrative services;
(c) beneficial ownership of the Fund's assets will be freely
transferable;
(d) adequate records will be maintained identifying the assets as
belonging to the Fund;
(e) the Fund's independent public accountants will be given access to
those records; and
(f) the Fund will receive periodic reports with respect to the
safekeeping of its assets.
10. Instructions Consistent With The Charter, etc. U.S. Trust may
assume that any Written Instructions received hereunder are not in any way
inconsistent with any provision of the Charter or By-Laws of the Fund or any
vote or resolution of the Fund's Board, or any committee thereof. U.S. Trust
shall be entitled to rely upon any Written Instructions actually received by
U.S. Trust pursuant to this Agreement. The Fund agrees that U.S. Trust shall
incur no liability in acting in good faith upon Written Instructions given to
U.S. Trust. In accord with instructions from the Fund, as required by accepted
industry practice or as U.S. Trust may elect in effecting the execution of Fund
instructions, any advance of cash or other Property made by U.S. Trust, arising
from the purchase, sale, redemption, transfer or other disposition of Property
of the Fund, or in connection with the disbursement of funds to any party, or in
payment of fees, expenses, claims or liabilities owed to U.S. Trust by the Fund
or to any other party which has secured judgment in a court of law against the
Fund, which creates an overdraft in the accounts or over-delivery of Property
shall be deemed a loan by U.S. Trust to the Fund, payable on demand, bearing
interest at such rate as is customarily charged by U.S. Trust for similar loans.
The Fund agrees that test arrangements, authentication methods or other security
devices to be used with respect to instructions which the Fund may give by
telephone, telex, TWX, facsimile transmission, bank wire or through an
electronic instruction system, shall be processed in accordance with terms and
conditions for the use of such arrangements, methods or devices as U.S. Trust
may put into effect and modify from time to time. The Fund shall safeguard any
test keys, identification codes or other security devices which U.S. Trust makes
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available to the Fund and agrees that the Fund shall be responsible for any
loss, liability or damage incurred by U.S. Trust or by the Fund as a result of
U.S. Trust's acting in accordance with instructions from any unauthorized person
using the proper security device, unless such loss, liability or damage was
incurred as a result of U.S. Trust's negligence or misconduct. U.S. Trust may
electronically record, but shall not be obligated to so record, any instructions
given bv telephone and any other telephone discussions with respect to the
Account. In the event that the Fund uses U.S. Trust's Asset Management System
("AMS"), the Fund agrees that U.S. Trust will not be responsible for the
consequences of the failure of the AMS to perform for any reason beyond the
reasonable control of U.S. Trust, or the failure of any communications carrier,
utility or communications network. In the event the AMS is inoperable, the Fund
agrees that it will accept the communication of transaction instructions by
telephone, facsimile transmission on equipment compatible to U.S. Trust's
facsimile receiving equipment or by letter, at no additional charge to the Fund.
11. Transactions Not Requiring Written Instructions. U.S. Trust is
authorized and (unless expressly indicated to the contrary) instructed to take
the following actions without Written Instructions:
(a) Collection of Income and Other Payments. U.S. Trust shall:
(i) collect and receive for the account of the Fund, all income
and other payments and distributions, including (without limitation)
stock dividends, rights, warrants and similar items included or to be
included in the Property of the Fund, and promptly advise the Fund of
such receipt and shall credit such income, as collected, to the Fund.
From time to time, U.S. Trust may elect, but shall not be so obligated,
to credit the Account with interest, dividends or principal payments on
payable or contractual settlement dates, in anticipation of receiving
same from a payor, central depository, broker or other agent employed
by the Fund or U.S. Trust. Any such crediting and posting shall be at
the Fund's sole risk, and U.S. Trust shall be authorized to reverse any
such advance posting in the event U.S. Trust does not receive good
funds from any such payor, central depository, broker or agent of the
Fund. U.S. Trust will take any reasonable action which may be necessary
and proper in connection with the collection of such interest,
dividends or principal payments, provided the Fund will reimburse U.S.
Trust for any reasonable attorneys' fees in connection therewith.
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(ii) with respect to securities of foreign issuers held in custody
by U.S. Trust hereunder, if any, effect collection of dividends,
interest and other income, and notify the Fund of any call for
redemption, offer of exchange, right of subscription, reorganization,
or other proceedings affecting such securities, or any default in
payments due thereon. It is understood, however, that U.S. Trust shall
be under no responsibility for any failure or delay in effecting such
collections or giving such notice with respect to securities of foreign
issuers unless such failure or delay is due to its negligence or
misconduct; provided that this sub-paragraph (ii) shall not be
construed as creating any such responsibility with respect to
securities of non-foreign issuers. Collections of income in foreign
currency are, to the extent possible, to be converted into United
States Dollars, unless the Fund instructs U.S. Trust otherwise in
writing, and in effecting such conversion U.S. Trust may use such
methods or agencies as it may see fit, including the facilities of its
own foreign division, at customary rates. All risk and expense incident
to such conversion is for the account of the Fund and U.S. Trust shall
have no responsibility for fluctuations in exchange rates affecting any
such conversion, provided such conversion is performed promptly.
(iii) endorse and deposit for collection in the name of the Fund,
checks, drafts, or other orders for the payment of money on the same
day as received.
(iv) receive and hold for the account of the Fund all securities
received by the Fund as a result of a stock dividend, share split-up or
reorganization, recapitalization, readjustment or other rearrangement
or distribution of rights or similar securities issued with respect to
any portfolio securities of the Fund held by U.S. Trust hereunder.
(v) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable.
(vi) take any action which may be necessary and proper in
connection with the collection and receipt of Fund income and other
payments and the endorsement for collection of checks, drafts and other
negotiable instruments.
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(vii) with respect to domestic securities, exchange securities in
temporary form for securities in definitive form, effect an exchange of
the shares where the par value of stock is changed, and surrender
securities at maturity or when advised of earlier call for redemption
against payment therefor in accordance with accepted industry practice.
U.S. Trust shall not be liable for failure to redeem any called bond or
to take other action if notice of such call or action was not provided
by any service to which it subscribes, provided that U.S. Trust shall
have acted in good faith without being negligent and in accordance with
"street practice" (as is customary in industry). U.S. Trust shall have
no duty to notify the Fund of any rights, duties, limitations,
conditions or other information set forth in any security (including
mandatory or optional put, call and similar provisions), but U.S. Trust
shall forward to the Fund any notices or other documents received with
regard to any such security. When fractional shares of stock of a
declaring corporation are received as a stock distribution, unless
specifically instructed to the contrary in writing, U.S. Trust is
authorized to sell the fraction received and credit the Fund's account.
Unless specifically instructed to the contrary in writing, U.S. Trust
is authorized to exchange securities in bearer form for securities in
registered form. If any Property registered in the name of a nominee of
U.S. Trust is called for partial redemption by the issuer of such
Property, U.S. Trust is authorized to allot the called portion to the
respective beneficial holders of the Property in such manner as is
deemed by U.S. Trust to be fair and equitable.
(b) Miscellaneous Transactions. U.S. Trust is authorized to deliver or
cause to be delivered Property against payment or other consideration or
written receipt therefor in the following cases:
(i) for examination by a broker selling for the account of the Fund
in accordance with street delivery custom;
(ii) for the exchange of interim receipts or temporary securities
for definitive securities; and
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(iii) for transfer of securities into the name of the Fund or U.S.
Trust or a nominee of either, or for exchange of securities for a
different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be delivered
to U.S. Trust.
12. Transactions Requiring Instructions. Upon receipt of Written
Instructions and not otherwise, U.S. Trust, directly or through the use of a
Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in such
Written Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised;
(b) Deliver any securities held for the Fund against receipt of 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;
(c) Deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, against receipt of such certificates of deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund and take
such other steps as shall be stated in said instructions to be for the purpose
of effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust
company for the purpose of pledge or hypothecation to secure any loan incurred
by the Fund; provided, however, that securities shall be released only upon
payment to U.S. Trust of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already made, subject to
proper prior authorization, further securities may be released for that purpose;
and pay such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes evidencing the
loan;
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(f) Deliver any securities held for the Fund upon the exercise of a
covered call option written by the Fund on such securities; and
(g) Deliver securities held for the Fund pursuant to separate security
lending and repurchase agreements concerning the lending of the Fund's
securities into which the Fund may enter, from time to time.
13. Repurchase Agreement Transactions. U.S. Trust is authorized to make
temporary short-term investments of the Fund's excess cash (as presented to U.S.
Trust by Mutual Funds Service Company) pursuant to the standing instructions set
forth in this section 13. U.S. Trust shall invest excess cash in repurchase
agreements with maturities of not more than 7 days entered into with banks or
dealers approved by the Fund's Board of Trustees, as set forth in Attachment D
to this Agreement. The collateral must be segregated from the assets of the
seller of the repurchase agreement and held in a separate account with a third
party custodian in the name of U.S. Trust on behalf of the Fund. U.S. Trust is
responsible for ensuring that the underlying collateral consists of only U.S.
Government securities, certificates of deposit and bankers' acceptances. If the
underlvlng collateral has a maturity of two years or less, the market value of
the collateral shall equal at least 101% of the cash value of the repurchase
agreement. If the underlying collateral has a maturity of greater than two
years, the market value of the collateral shall equal at least 102% of the cash
value of the repurchase agreement. U.S. Trust will be liable to the Fund if it
acts beyond the authority granted to it by the Fund pursuant to this standing
instruction.
14. Purchase of Securities. Promptly after each purchase of securities
by the Investment Adviser (or any sub-adviser), the Fund shall deliver to U.S.
Trust (as Custodian) Written Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares or the principal amount purchased and accrued interest, if any,
(c) the dates of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase and (f) the name of the person from
whom or the broker through whom the purchase was made. U.S. Trust shall upon
receipt of securities purchased by or for the Fund pay out of the monies held
for the account of the Fund the total amount payable to the person from whom or
the broker through whom the purchase was made, provided that the same conforms
to the total amount payable as set forth in such Written Instructions.
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In each case where payment for purchase of securities is made by U.S.
Trust in advance of receipt of the securities purchased in the absence of
specific Written Instructions from the Fund to so pay in advance, U.S. Trust
shall be liable to the Fund for such securities to the same extent as if the
securities had been received by U.S. Trust, unless the custom of the individual
country is to make payment for the securities in advance of receipt of the
securities.
15. Sales of Securities. Promptly after each sale of securities by the
Investment Adviser, the Fund shall deliver to U.S. Trust (as Custodian) Written
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable to the Fund upon such sale and (f)
the name of the broker through whom or the person to whom the sale was made.
U.S. Trust shall deliver the securities upon receipt of the total amount payable
to the Fund upon such sale, provided that the same conforms to the total amount
payable as set forth in such Written Instructions. Subject to the foregoing,
U.S. Trust may accept payment in such form as shall be satisfactory to it, and
may deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
16. Records. U.S. Trust shall keep and maintain appropriate books and
records with respect to its duties hereunder for the Fund. The books and records
pertaining to the Fund which are in the possession of U.S. Trust shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws and regulations. The books and records pertaining to the Fund
which are in the possession of U.S. Trust shall be the property of the Fund.
The Fund, or the Fund's authorized representatives, shall have access to such
books and records at all times during U.S. Trust's normal business hours, and
such books and records shall be surrendered to the Fund promptly upon request.
Upon reasonable request of the Fund, copies of any such books and records shall
be provided by U.S. Trust to the Fund or the Fund's authorized representative at
the Fund's expense.
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17. Cooperation with Accountants. U.S. Trust shall cooperate with the
Fund's independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their unqualified opinion, including but not limited to the
opinion included in the Fund's semiannual report on Form N-SAR.
18. Confidentiality. U.S. Trust agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the Fund
all records and other information relative to the Fund and its prior, present or
potential shareholders and relative to the Investment Adviser and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where U.S.
Trust may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Nothing contained herein,
however, shall prohibit U.S. Trust from advertising or soliciting the public
generally with respect to other products or services, regardless of whether such
advertisement or solicitation may include prior, present or potential
shareholders of the Fund.
19. Equipment Failures. In the event of equipment failures beyond U.S.
Trust's control, U.S. Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions but shall not have liability
with respect thereto. U.S. Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
back up emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
20. Right to Receive Advice.
(a) Advice of Fund. If U.S. Trust shall be in doubt as to any action to
be taken or omitted by it, it may request, and shall receive, from the Fund
clarification or advice.
-14-
(b) Advice of Counsel. if U.S. Trust shall be in doubt as to any
question of law involved in any action to be taken or omitted by U.S. Trust, it
may request advice at its own cost from counsel of its own choosing (who may be
counsel for the Fund or U.S. Trust, at the option of U.S. Trust).
(c) Conflicting Advice. In case of conflict between directions or
advice received by U.S. Trust pursuant to subparagraph (a) of this paragraph and
advice received by U.S. Trust pursuant to subparagraph (b) of this paragraph,
U.S. Trust shall be entitled to rely on and follow the advice received pursuant
to the latter provision alone.
(d) Protection of U.S. Trust. U.S. Trust shall be protected in any
action or inaction which it takes or omits to take in reliance on any directions
or advice received pursuant to subparagraph (a) of this section which U.S.
Trust, after receipt of any such directions or advice, in good faith believes to
be consistent with such directions or advice. However, nothing in this paragraph
shall be construed as imposing upon U.S. Trust any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to U.S. Trust's properly taking or omitting
to take such action. Nothing in this subparagraph shall excuse U.S. Trust when
an action or omission on the part of U.S. Trust constitutes willful misfeasance,
bad faith, negligence or reckless disregard by U.S. Trust of its duties under
this Agreement.
21. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the contents of its registration
statement on Form N-1A, as filed with, and declared effective by, the SEC, and
all amendments thereto, comply with all applicable requirements of the 1933 Act,
the 1940 Act, and any laws, rules and regulations of governmental authorities
having jurisdiction.
22. Compensation. As compensation for the services described within
this Agreement and rendered by U.S. Trust during the term of this Agreement, the
Fund will pay to U.S. Trust, in addition to reimbursement of its out-of-pocket
expenses, monthly fees as outlined in Attachment B.
23. Indemnification. The Fund, as sole owner of the Property, agrees to
indemnify and hold harmless U.S. Trust and its nominees from all taxes, charges,
expenses, assessments, claims, and liabilities (including, without limitation,
-15-
liabilities arising under the 1933 Act, the Securities Exchange Act of 1934, the
1940 Act, and any state and foreign securities and blue sky laws, all as amended
from time to time) and expenses, including (without limitation) reasonable
attorneys' fees and disbursements, arising directly or indirectly (a) from the
fact that securities included in the Property are registered in the name of any
such nominee or (b) without limiting the generality of the foregoing clause (a)
from any action or thing which U.S. Trust takes or does or omits to take or do
(i) at the request or on the direction of or in reliance on the advice of the
Fund, or (ii) upon Written Instructions; provided, that neither U.S. Trust nor
any of its nominees or subcustodians shall be indemnified against any liability
to the Fund or to its Shareholders (or any expenses incident to such liability)
arising out of (x) U.S. Trust's or such nominee's or subcustodian's willful
misfeasance, bad faith, negligence or reckless disregard of its duties under
this Agreement or (y) U.S. Trust's own or its subcustodian's negligent failure
to perform its duties under this Agreement. In order that the indemnification
provisions contained in this Section 23 shall apply, however, it is understood
that if in any case the Fund may be asked to indemnify or save U.S. Trust
harmless, the Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that U.S.
Trust will use all reasonable care to identify and notify the Fund promptly
concerning any situation which presents the probability of such a claim for
indemnification against the Fund. The Fund shall have the option to defend U.S.
Trust against any claim in an amount exceeding $50,000 which may be the subject
of this indemnification, and in the event that the Fund so elects it will so
notify U.S. Trust and thereupon the Fund shall take over complete defense of the
claim, and U.S. Trust shall in such situations initiate no further legal or
other expenses for which it shall seek indemnification under this Section 23.
U.S. Trust shall in no case confess any claim or make any compromise in any case
in which the Fund will be asked to indemnify U.S. Trust except with the Fund's
prior written consent. In the event of any advance of cash for any purpose made
by U.S. Trust resulting from orders or Written Instructions of the Fund, or in
the event that U.S. Trust or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
-16-
its or its nominee's or subcustodian's willful misfeasance, bad faith,
negligence or reckless disregard of its duties under this Agreement or any
agreement between U.S Trust and any nominee or subcustodian, the Fund shall
promptly reimburse U.S. Trust for such advance of cash or such taxes, charges,
expenses, assessments, claims or liabilities.
24. Responsibility of U.S. Trust. U.S. Trust shall be under no duty to
take any action on behalf of the Fund except as specifically set forth herein or
as may be specifically agreed to by U.S. Trust in writing. In the performance of
its duties hereunder, U.S. Trust shall be obligated to exercise care and
diligence and to act in good faith and to use its best efforts within reasonable
limits to insure the accuracy of all services performed under this Agreement.
U.S. Trust shall be responsible for its own negligent failure or that of any
subcustodian it shall appoint to perform its duties under this Agreement
(including but not limited to any subcustodian appointed pursuant to a
repurchase agreement transaction under section 13 of this Agreement) but to the
extent that duties, obligations and responsibilities are not expressly set forth
or referenced in this Agreement, U.S. Trust shall not be liable for any act or
omission which does not constitute willful misfeasance, bad faith, or negligence
on the part of U.S. Trust or reckless disregard of such duties, obligations and
responsibilities. Without limiting the generality of the foregoing or of any
other provision of this Agreement, U.S. Trust in connection with its duties
under this Agreement shall not be under any duty or obligation to inquire into
and shall not be liable for or in respect of (a) the validity or invalidity or
authority or lack thereof of any advice, direction, notice or other instrument
which conforms to the applicable requirements of this Agreement, if any, and
which U.S. Trust believes to be genuine, (b) the validity of the issue of any
securities purchased or sold by the Fund, the legality of the purchase or sale
thereof or the propriety of the amount paid or received therefor, (c) the
legality of the issue or sale of any Shares, or the sufficiency of the amount to
be received therefor, (d) the legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor, (e) the legality of the declaration
or payment of any dividend or distribution on Shares, or (f) delays or errors or
loss of data occurring by reason of circumstances beyond U.S. Trusts control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 19),
flood or catastrophe, acts of God, insurrection, war, riots, or failure of the
mail, transportation systems, communication systems or power supply.
-17-
25. Collection. All collections of monies or other property in respect,
or which are to become part, of the Property (but not the safekeeping thereof
upon receipt by U.S. Trust) shall be at the sole risk of the Fund. In any case
in which U.S. Trust does not receive any payment due the Fund within a
reasonable time after U.S. Trust has made proper demands for the same, it shall
so notify the Fund in writing, including copies of all demand letters, any
written responses thereto, and memoranda of all oral responses thereto, and to
telephonic demands, and await instructions from the Fund. U.S. Trust shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. U.S. Trust shall also notify the Fund as soon
as reasonably practicable whenever income due on securities is not collected in
due course.
26. Duration and Termination. This Agreement shall be effective as of
the date hereof and shall continue until termination by the Fund or by U.S.
Trust on 90 days' written notice. Upon any termination of this Agreement,
pending appointment of a successor to U.S. Trust or a vote of the Shareholders
of the Fund to dissolve or to function without a custodian of its cash,
securities or other property, U.S. Trust shall not deliver cash, securities or
other property of the Fund to the Fund, but may deliver them to a bank or trust
company of its own selection, having aggregate capital, surplus and undivided
profits, as shown by its last published report of not less than twenty million
dollars ($20,000,000) as a successor custodian for the Fund to be held under
terms similar to those of this Agreement, provided, however, that U.S. Trust
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by U.S. Trust or on or against U.S. Trust and
until full payment shall have been made to U.S. Trust of all of its fees,
compensation, costs and expenses, subject to the provisions of Paragraph 22 of
this Agreement.
27. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
-18-
Notices shall be addressed (a) if to U.S. Trust, at U.S. Trust's address, 000 X.
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; (b) if to the Fund. at the address of
the Fund, Xxx Xxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000; or (c) if to
neither of the foregoing, at such other address as shall have been notified to
the sender of any such Notice or other communication. If the location of the
sender of a Notice and the address of the addressee thereof are, at the time of
sending, more than 100 miles apart, the Notice may be sent by first-class mail,
in which case it shall be deemed to have been given three days after it is sent,
or if sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately, and, if the location of the
sender of a Notice and the address of the addressee thereof are, at the time of
sending, not more than 100 miles apart, the Notice may be sent by first-class
mail, in which case it shall be deemed to have been given two days after it is
sent, or if sent by messenger, it shall be deemed to have been given on the day
it is delivered, or if sent by confirming telegram, cable, telex or facsimile
sending device, it shall be deemed to have been given immediately. All postage,
cable, telegram, telex and facsimile sending device charges arising from the
sending of a Notice hereunder shall be paid by the sender.
28. Further Actions. Each party agees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
29. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
30. Miscellaneous. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the parties hereto. The captions in this
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. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
-19-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
MAS FUNDS
Attest: Xxxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------- ---------------------------
Name: Xxxxx X. Xxxxxx
---------------------------
Title: President
---------------------------
UNITED STATES TRUST COMPANY OF NEW YORK
Attest: Xxxxxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------- ---------------------------
Name: Xxxxx X. Xxxxxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
July 22, 1994
ATTACHMENT A
Portfolios Covered by This Agreement
1. Equity Portfolio
2. Value Portfolio
3. Small Capitalization Value Portfolio
4. Growth Portfolio
5. Emerging Growth Portfolio
6. Fixed Income Portfolio
7. Fixed Income II Portfolio
8. Special Purpose Fixed Income Portfolio
9. High Yield Securities Portfolio
10. Limited Duration Fixed Income Portfolio
11. Intermediate Duration Fixed Income Portfolio
12. Mortgage-Backed Securities Portfolio
13. Balanced Portfolio
14. Cash Reserves Portfolio
15. Select Value Portfolio
16. Select Equity Portfolio
17. Select Fixed Income Portfolio
18. Municipal Fixed Income Portfolio
19. Pennsylvania Municipal Fixed Income Portfolio
20. Global Balanced Portfolio
A-1
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
July 22, 1994
ATTACHMENT B
Fees and Expenses
The Fund will be billed monthly for fees and out-of-pocket expenses
under its Mutual Fund Custody Agreement with U.S. Trust. Billings for fees and
expenses will be due to U.S. Trust upon receipt and are based on the following
schedules:
For the services rendered pursuant to the Mutual Fund Custody
Agreement, the Fund shall pay to U.S. Trust, net of any securities lending
revenue due the Fund, a custody safekeeping fee and custody transaction fee
computed and payable monthly as follows:
Domestic Custody Safekeeping Fees
.8 Basis Points on the first $1 billion in assets in each Portfolio, plus
.7 Basis Points on assets in excess of $1 billion in each Portfolio
Domestic Custody Transaction Fees
$ 8.00 per DTC or Fed Book Entry transaction
$15.00 per PTC transaction
$28.00 per Physical transaction
$40.00 per Future or Option Wire
$ 8.00 per outgoing Wire Transfer
Global Custody Fees for Euroclear Eligible Securities
4.0 Basis Points on the Funds' average net assets.
$35.00 per Euroclear transaction
B-1
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
July 22, 1994
Global Custody Fees for non-Euroclear Eligible Securities - Country Dependent
Safekeeping Fee Transaction Fee
Argentina 32.0 basis points $175
Australia 11.0 75
Austria 10.0 75
Belgium 10.0 75
Brazil 32.0 000
Xxxxxx 7.0 00
Xxxxxxx 00.0 00
Xxxxxxx 00.0 00
Xxxxxx 9.0 75
Germany 9.0 00
Xxxxxx 00.0 000
Xxxx Xxxx 10.0 75
Indonesia 22.0 125
Ireland 12.0 00
Xxxxx 00.0 00
Xxxxx 8.0 30
Malaysia 17.0 125
Mexico 14.0 00
Xxxxxxxxxxx 00.0 00
Xxx Xxxxxxx 12.0 00
Xxxxxx 00.0 00
Xxxxxxxxxxx 00.0 000
Xxxxxxxx 27.0 000
Xxxxx Xxxxxx 14.0 75
Singapore 12.0 75
Spain 14.0 50
Sweden 11.0 35
Switzerland 11.0 00
Xxxxxxxx 00.0 000
Xxxxxx Xxxxxxx 7.0 35
Venezuela 47.0 175
Other Countries 10.0 55
B-2
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
July 22, 1994
ATTACHMENT B
Fees and Expenses
Balance Credits on Mutual Fund Custody
Credit on overnight cash balances, less required reserves, will be paid
to the Fund at a rate equal to 75% of the 90 day Treasury xxxx rate.
Out-of-Pocket Expenses
Out-of-pocket expenses including but not limited to the cost of
reregistration of foreign securities will be billed to the Fund on a monthly
basis.
B-3
MUTUAL FUND CUSTODY AGREEMENT
MAS FUNDS
July 22, 0000
XXXXXXXXXX X
Xxxxxxxxxx Xxxxxxx
Xxxxxx Xxxxxx Trust Company of New York
X.X Xxxxxx Securities
Xxxxxxx Sachs & Co.
Xxxxxxx Xxxxx & Co. Inc.
D-1
