EXHIBIT 99.2(j)
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[CUSTODY AGREEMENT]
CUSTODY AGREEMENT
Dated January 1, 1999
Between
UMB BANK, N.A.
and
ZAZOVE CONVERTIBLE SECURITIES FUND, INC.
TABLE OF CONTENTS
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions 1
(a) Securities 1
(b) Assets 1
(c) Instructions and Special Instructions 1
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic Subcustodian 2
(a) Safekeeping 3
(b) Manner of Holding Securities 3
(c) Free Delivery of Assets 4
(d) Exchange of Securities 4
(e) Purchases of Assets 4
(f) Sales of Assets 5
(g) Options 5
(h) Futures Contracts 6
(i) Segregated Accounts 6
(j) Depositary Receipts 6
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 6
(l) Interest Bearing Deposits 7
(m) Foreign Exchange Transactions 7
(n) Pledges or Loans of Securities 8
(o) Stock Dividends, Rights, Etc. 8
(p) Routine Dealings 8
(q) Collections 8
(r) Bank Accounts 9
(s) Dividends, Distributions and Redemptions 9
(t) Proceeds from Shares Sold 9
(u) Proxies and Notices; Compliance with the Shareholders
Communication Act of 1985 9
(v) Books and Records 9
(w) Opinion of Fund's Independent Certified Public Accountants10
(x) Reports by Independent Certified Public Accountants 10
(y) Bills and Others Disbursements 10
5. Subcustodians 10
(a) Domestic Subcustodians 10
(b) Foreign Subcustodians 10
(c) Interim Subcustodians 11
(d) Special Subcustodians 11
(e) Termination of a Subcustodian 11
(f) Certification Regarding Foreign Subcustodians 11
6. Standard of Care 12
(a) General Standard of Care 12
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Armed Conflict, Sovereign
Risk, etc. 12
(c) Liability for Past Records 12
(d) Advice of Counsel 12
(e) Advice of the Fund and Others 12
(f) Instructions Appearing to be Genuine 13
(g) Exceptions from Liability 13
7. Liability of the Custodian for Actions of Others 13
(a) Domestic Subcustodians 13
(b) Liability for Acts and Omissions of
Foreign Subcustodians 13
(c) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities Depositories and
Clearing Agencies 13
(d) Defaults or Insolvency's of Brokers, Banks, Etc. 14
(e) Reimbursement of Expenses 14
8. Indemnification 14
(a) Indemnification by Fund 14
(b) Indemnification by Custodian 14
9. Advances 14
10. Liens 15
11. Compensation 15
12. Powers of Attorney 15
13. Termination and Assignment 15
14. Additional Funds 15
15. Notices 16
16. Miscellaneous 16
CUSTODY AGREEMENT
This agreement made as of this 1st day of January, 1999, between UMB
Bank, n.a., a national banking association with its principal place of
business located in Kansas City, Missouri (hereinafter "Custodian"), and
each of the Funds listed on Appendix B hereof, together with such
additional Funds which shall be made parties to this Agreement by the
execution of Appendix B hereto (individually, a "Fund" and collectively,
the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as a management investment company
under the Investment Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as its custodian for
the custody of Assets (as hereinafter defined) owned by such Fund which
Assets are to be held in such accounts as such Fund may establish from time
to time; and
WHEREAS, Custodian is willing to accept such appointment on the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN.
Each Fund hereby constitutes and appoints the Custodian as custodian
of Assets belonging to each such Fund which have been or may be from time
to time deposited with the Custodian. Custodian accepts such appointment
as a custodian and agrees to perform the duties and responsibilities of
Custodian as set forth herein on the conditions set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds, bills,
rights, script, warrants, interim certificates and all negotiable or
nonnegotiable paper commonly known as Securities and other instruments or
obligations.
(b) "Assets" shall mean Securities, monies and other property held
by the Custodian for the benefit of a Fund.
(c)(1) "Instructions", as used herein, shall mean: (i) a tested
telex, a written (including, without limitation, facsimile transmission)
request, direction, instruction or certification signed or initialed by or
on behalf of a Fund by an Authorized Person; (ii) a telephonic or other
oral communication from a person the Custodian reasonably believes to be an
Authorized Person; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) on behalf of a Fund. Instructions in the form of
oral communications shall be confirmed by the appropriate Fund by tested
telex or in writing in the manner set forth in clause (i) above, but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral Instructions prior to the Custodian's
receipt of such confirmation. Each Fund authorizes the Custodian to record
any and all telephonic or other oral Instructions communicated to the
Custodian.
(c)(2) "Special Instructions", as used herein, shall mean
Instructions signed or confirmed in writing by the Treasurer or any
Assistant Treasurer of a Fund or any other person designated by the
Treasurer of such Fund in writing.
(c)(3) Instructions and Special Instructions shall be delivered to
the Custodian at the address and/or telephone, facsimile transmission or
telex number agreed upon from time to time by the Custodian and each Fund.
(c)(4) Where appropriate, Instructions and Special Instructions
shall be continuing instructions.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that its execution
does not violate any of the provisions of its respective charter, articles
of incorporation, articles of association or bylaws and all required
corporate action to authorize the execution and delivery of this Agreement
has been taken.
Each Fund has furnished the Custodian with copies, properly certified
or authenticated, with all amendments or supplements thereto, of the
following documents:
(a) Certificate of Incorporation (or equivalent document) of the
Fund as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing the
Custodian and approving the form of this Agreement; and
(d) With regard to a Fund the outstanding shares of which are
registered under the Securities Act of 1933, the Fund's current prospectus
and statements of additional information, and with regard to a Fund the
outstanding shares of which are not registered under the Securities Act of
1933, the Fund's current Private Placement Memorandum.
Each Fund shall promptly furnish the Custodian with copies of any
updates, amendments or supplements to the foregoing documents.
In addition, each Fund has delivered or will promptly deliver to the
Custodian, copies of the Resolution(s) of its Board of Directors or
Trustees and all amendments or supplements thereto, properly certified or
authenticated, designating certain officers or employees of each such Fund
who will have continuing authority to certify to the Custodian: (a) the
names, titles, signatures and scope of authority of all persons authorized
to give Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of each Fund, and (b) the names, titles
and signatures of those persons authorized to countersign or confirm
Special Instructions on behalf of each Fund (in both cases collectively,
the "Authorized Persons" and individually, an "Authorized Person"). Such
Resolutions and certificates may be accepted and relied upon by the
Custodian as conclusive evidence of the facts set forth therein and shall
be considered to be in full force and effect until delivery to the
Custodian of a similar Resolution or certificate to the contrary. Upon
delivery of a certificate which deletes or does not include the name(s) of
a person previously authorized to give Instructions or to countersign or
confirm Special Instructions, such persons shall no longer be considered an
Authorized Person authorized to give Instructions or to countersign or
confirm Special Instructions. Unless the certificate specifically requires
that the approval of anyone else will first have been obtained, the
Custodian will be under no obligation to inquire into the right of the
person giving such Instructions or Special Instructions to do so.
Notwithstanding any of the foregoing, no Instructions or Special
Instructions received by the Custodian from a Fund will be deemed to
authorize or permit any director, trustee, officer, employee, or agent of
such Fund to withdraw any of the Assets of such Fund upon the mere receipt
of such authorization, Special Instructions or Instructions from such
director, trustee, officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.
Except for Assets held by any Subcustodian appointed pursuant to
Sections 5(b), (c), or (d) of this Agreement, the Custodian shall have and
perform the powers and duties hereinafter set forth in this Section 4. For
purposes of this Section 4 all references to powers and duties of the
"Custodian" shall also refer to any Domestic Subcustodian appointed
pursuant to Section 5(a).
(a) SAFEKEEPING.
The Custodian will keep safely the Assets of each Fund which are
delivered to it from time to time. The Custodian shall not be responsible
for any property of a Fund held or received by such Fund and not delivered
to the Custodian.
(b) MANNER OF HOLDING SECURITIES.
(1) The Custodian shall at all times hold Securities of each
Fund either: (i) by physical possession of the share certificates or other
instruments representing such Securities in registered or bearer form; or
(ii) in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio Securities
which have been delivered to it in physical form, by registering the same
in the name of the appropriate Fund or its nominee, or in the name of the
Custodian or its nominee, for whose actions such Fund and Custodian,
respectively, shall be fully responsible. Upon the receipt of
Instructions, the Custodian shall hold such Securities in street
certificate form, so called, with or without any indication of fiduciary
capacity. However, unless it receives Instructions to the contrary, the
Custodian will register all such portfolio Securities in the name of the
Custodian's authorized nominee. All such Securities shall be held in an
account of the Custodian containing only assets of the appropriate Fund or
only assets held by the Custodian as a fiduciary, provided that the records
of the Custodian shall indicate at all times the Fund or other customer for
which such Securities are held in such accounts and the respective
interests therein.
(3) The Custodian may deposit and/or maintain domestic
Securities owned by a Fund in, and each Fund hereby approves use of: (a)
The Depository Trust Company; (b) The Participants Trust Company; and (c)
any book-entry system as provided in (i) Subpart O of Treasury Circular Xx.
000, 00 XXX 306.115, (ii) Subpart B of Treasury Circular Public Debt Series
Xx. 00-00, 00 XXX 350.2, or (iii) the book-entry regulations of federal
agencies substantially in the form of 31 CFR 306.115. Upon the receipt of
Special Instructions, the Custodian may deposit and/or maintain domestic
Securities owned by a Fund in any other domestic clearing agency registered
with the Securities and Exchange Commission ("SEC") under Section 17A of
the Securities Exchange Act of 1934 (or as may otherwise be authorized by
the SEC to serve in the capacity of depository or clearing agent for the
Securities or other assets of investment companies) which acts as a
Securities depository. Each of the foregoing shall be referred to in this
Agreement as a "Securities System", and all such Securities Systems shall
be listed on the attached Appendix A. Use of a Securities System shall be
in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(i) The Custodian may deposit the Securities directly or
through one or more agents or Subcustodians which are also qualified to act
as custodians for investment companies.
(ii) The Custodian shall deposit and/or maintain the
Securities in a Securities System, provided that such Securities are
represented in an account ("Account") of the Custodian in the Securities
System that includes only assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(iii) The books and records of the Custodian shall at
all times identify those Securities belonging to any one or more Funds
which are maintained in a Securities System.
(iv) The Custodian shall pay for Securities purchased
for the account of a Fund only upon (a) receipt of advice from the
Securities System that such Securities have been transferred to the Account
of the Custodian in accordance with the rules of the Securities System, and
(b) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Fund. The Custodian shall
transfer Securities sold for the account of a Fund only upon (a) receipt of
advice from the Securities System that payment for such Securities has been
transferred to the Account of the Custodian in accordance with the rules of
the Securities System, and (b) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of such
Fund. Copies of all advices from the Securities System relating to
transfers of Securities for the account of a Fund shall be maintained for
such Fund by the Custodian. The Custodian shall deliver to a Fund, on the
next succeeding business day, daily transaction reports that shall include
each day's transactions in the Securities System for the account of such
Fund. Such transaction reports shall be delivered to such Fund or any
agent designated by such Fund pursuant to Instructions, by computer or in
such other manner as such Fund and Custodian may agree.
(v) The Custodian shall, if requested by a Fund pursuant
to Instructions, provide such Fund with reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
Securities deposited in the Securities System.
(vi) Upon receipt of Special Instructions, the Custodian
shall terminate the use of any Securities System on behalf of a Fund as
promptly as practicable and shall take all actions reasonably practicable
to safeguard the Securities of such Fund maintained with such Securities
System.
(c) FREE DELIVERY OF ASSETS.
Notwithstanding any other provision of this Agreement and except as
provided in Section 3 hereof, the Custodian, upon receipt of Special
Instructions, will undertake to make free delivery of Assets, provided such
Assets are on hand and available, in connection with a Fund's transactions
and to transfer such Assets to such broker, dealer, Subcustodian, bank,
agent, Securities System or otherwise as specified in such Special
Instructions.
(d) EXCHANGE OF SECURITIES.
Upon receipt of Instructions, the Custodian will exchange portfolio
Securities held by it for a Fund for other Securities or cash paid in
connection with any reorganization, recapitalization, merger,
consolidation, or conversion of convertible Securities, and will deposit
any such Securities in accordance with the terms of any reorganization or
protective plan.
Without Instructions, the Custodian is authorized to exchange
Securities held by it in temporary form for Securities in definitive form,
to surrender Securities for transfer into a name or nominee name as
permitted in Section 4(b)(2), to effect an exchange of shares in a stock
split or when the par value of the stock is changed, to sell any fractional
shares, and, upon receiving payment therefor, to surrender bonds or other
Securities held by it at maturity or call.
(e) PURCHASES OF ASSETS.
(1) SECURITIES PURCHASES. In accordance with Instructions,
the Custodian shall, with respect to a purchase of Securities, pay for such
Securities out of monies held for a Fund's account for which the purchase
was made, but only insofar as monies are available therein for such
purpose, and receive the portfolio Securities so purchased. Unless the
Custodian has received Special Instructions to the contrary, such payment
will be made only upon receipt of Securities by the Custodian, a clearing
corporation of a national Securities exchange of which the Custodian is a
member, or a Securities System in accordance with the provisions of Section
4(b)(3) hereof. Notwithstanding the foregoing, upon receipt of
Instructions: (i) in connection with a repurchase agreement, the Custodian
may release funds to a Securities System prior to the receipt of advice
from the Securities System that the Securities underlying such repurchase
agreement have been transferred by book-entry into the Account maintained
with such Securities System by the Custodian, provided that the Custodian's
instructions to the Securities System require that the Securities System
may make payment of such funds to the other party to the repurchase
agreement only upon transfer by book-entry of the Securities underlying the
repurchase agreement into such Account; (ii) in the case of Interest
Bearing Deposits, currency deposits, and other deposits, foreign exchange
transactions, futures contracts or options, pursuant to Sections 4(g),
4(h), 4(l), and 4(m) hereof, the Custodian may make payment therefor before
receipt of an advice of transaction; and (iii) in the case of Securities as
to which payment for the Security and receipt of the instrument evidencing
the Security are under generally accepted trade practice or the terms of
the instrument representing the Security expected to take place in
different locations or through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates, derivatives and
similar Securities, the Custodian may make payment for such Securities
prior to delivery thereof in accordance with such generally accepted trade
practice or the terms of the instrument representing such Security.
(2) OTHER ASSETS PURCHASED. Upon receipt of Instructions and
except as otherwise provided herein, the Custodian shall pay for and
receive other Assets for the account of a Fund as provided in Instructions.
(f) SALES OF ASSETS.
(1) SECURITIES SOLD. In accordance with Instructions, the
Custodian will, with respect to a sale, deliver or cause to be delivered
the Securities thus designated as sold to the broker or other person
specified in the Instructions relating to such sale. Unless the Custodian
has received Special Instructions to the contrary, such delivery shall be
made only upon receipt of payment therefor in the form of: (a) cash,
certified check, bank cashier's check, bank credit, or bank wire transfer;
(b) credit to the account of the Custodian with a clearing corporation of a
national Securities exchange of which the Custodian is a member; or (c)
credit to the Account of the Custodian with a Securities System, in
accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding
the foregoing, Securities held in physical form may be delivered and paid
for in accordance with "street delivery custom" to a broker or its clearing
agent, against delivery to the Custodian of a receipt for such Securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or return of, such Securities by the
broker or its clearing agent, and provided further that the Custodian shall
not be responsible for the selection of or the failure or inability to
perform of such broker or its clearing agent or for any related loss
arising from delivery or custody of such Securities prior to receiving
payment therefor.
(2) OTHER ASSETS SOLD. Upon receipt of Instructions and except
as otherwise provided herein, the Custodian shall receive payment for and
deliver other Assets for the account of a Fund as provided in Instructions.
(g) OPTIONS.
(1) Upon receipt of Instructions relating to the purchase of
an option or sale of a covered call option, the Custodian shall: (a)
receive and retain confirmations or other documents, if any, evidencing the
purchase or writing of the option by a Fund; (b) if the transaction
involves the sale of a covered call option, deposit and maintain in a
segregated account the Securities (either physically or by book-entry in a
Securities System) subject to the covered call option written on behalf of
such Fund; and (c) pay, release and/or transfer such Securities, cash or
other Assets in accordance with any notices or other communications
evidencing the expiration, termination or exercise of such options which
are furnished to the Custodian by the Options Clearing Corporation (the
"OCC"), the securities or options exchanges on which such options were
traded, or such other organization as may be responsible for handling such
option transactions.
(2) Upon receipt of Instructions relating to the sale of a
naked option (including stock index and commodity options), the Custodian,
the appropriate Fund and the broker-dealer shall enter into an agreement to
comply with the rules of the OCC or of any registered national securities
exchange or similar organizations(s). Pursuant to that agreement and such
Fund's Instructions, the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the writing of the
option; (b) deposit and maintain in a segregated account, Securities
(either physically or by book-entry in a Securities System), cash and/or
other Assets; and (c) pay, release and/or transfer such Securities, cash or
other Assets in accordance with any such agreement and with any notices or
other communications evidencing the expiration, termination or exercise of
such option which are furnished to the Custodian by the OCC, the securities
or options exchanges on which such options were traded, or such other
organization as may be responsible for handling such option transactions.
The appropriate Fund and the broker-dealer shall be responsible for
determining the quality and quantity of assets held in any segregated
account established in compliance with applicable margin maintenance
requirements and the performance of other terms of any option contract.
(h) FUTURES CONTRACTS.
Upon receipt of Instructions, the Custodian shall enter into a
futures margin procedural agreement among the appropriate Fund, the
Custodian and the designated futures commission merchant (a "Procedural
Agreement"). Under the Procedural Agreement the Custodian shall: (a)
receive and retain confirmations, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract by such Fund; (b)
deposit and maintain in a segregated account cash, Securities and/or other
Assets designated as initial, maintenance or variation "margin" deposits
intended to secure such Fund's performance of its obligations under any
futures contracts purchased or sold, or any options on futures contracts
written by such Fund, in accordance with the provisions of any Procedural
Agreement designed to comply with the provisions of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market (such
as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release Assets from and/or transfer Assets
into such margin accounts only in accordance with any such Procedural
Agreements. The appropriate Fund and such futures commission merchant
shall be responsible for determining the type and amount of Assets held in
the segregated account or paid to the broker-dealer in compliance with
applicable margin maintenance requirements and the performance of any
futures contract or option on a futures contract in accordance with its
terms.
(i) SEGREGATED ACCOUNTS.
Upon receipt of Instructions, the Custodian shall establish and
maintain on its books a segregated account or accounts for and on behalf of
a Fund, into which account or accounts may be transferred Assets of such
Fund, including Securities maintained by the Custodian in a Securities
System pursuant to Paragraph (b)(3) of this Section 4, said account or
accounts to be maintained (i) for the purposes set forth in Sections 4(g),
4(h) and 4(n) and (ii) for the purpose of compliance by such Fund with the
procedures required by the SEC Investment Company Act Release Number 10666
or any subsequent release or releases relating to the maintenance of
segregated accounts by registered investment companies, or (iii) for such
other purposes as may be set forth, from time to time, in Special
Instructions. The Custodian shall not be responsible for the determination
of the type or amount of Assets to be held in any segregated account
referred to in this paragraph, or for compliance by the Fund with required
procedures noted in (ii) above.
(j) DEPOSITARY RECEIPTS.
Upon receipt of Instructions, the Custodian shall surrender or cause
to be surrendered Securities to the depositary used for such Securities by
an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter referred to, collectively, as "ADRs"), against a
written receipt therefor adequately describing such Securities and written
evidence satisfactory to the organization surrendering the same that the
depositary has acknowledged receipt of instructions to issue ADRs with
respect to such Securities in the name of the Custodian or a nominee of the
Custodian, for delivery in accordance with such instructions.
Upon receipt of Instructions, the Custodian shall surrender or cause
to be surrendered ADRs to the issuer thereof, against a written receipt
therefor adequately describing the ADRs surrendered and written evidence
satisfactory to the organization surrendering the same that the issuer of
the ADRs has acknowledged receipt of instructions to cause its depository
to deliver the Securities underlying such ADRs in accordance with such
instructions.
(k) CORPORATE ACTIONS, PUT BONDS, CALLED BONDS, ETC.
Upon receipt of Instructions, the Custodian shall: (a) deliver
warrants, puts, calls, rights or similar Securities to the issuer or
trustee thereof (or to the agent of such issuer or trustee) for the purpose
of exercise or sale, provided that the new Securities, cash or other
Assets, if any, acquired as a result of such actions are to be delivered to
the Custodian; and (b) deposit Securities upon invitations for tenders
thereof, provided that the consideration for such Securities is to be paid
or delivered to the Custodian, or the tendered Securities are to be
returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall notify the appropriate Fund of such action in
writing by facsimile transmission or in such other manner as such Fund and
Custodian may agree in writing.
The Fund agrees that if it gives an Instruction for the performance
of an act after the deadline prescribed by the Custodian for the
performance of such act, the Custodian shall use its best efforts to
perform such act, but the Fund shall hold the Custodian harmless from any
adverse consequences in connection with any failure to effect such
Instruction. The Custodian agrees to establish reasonable deadlines by
which Instructions must be given.
(l) INTEREST BEARING DEPOSITS.
Upon receipt of Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to,
collectively, as "Interest Bearing Deposits") for the account of a Fund,
the Custodian shall purchase such Interest Bearing Deposits in the name of
such Fund with such banks or trust companies, including the Custodian, any
Subcustodian or any subsidiary or affiliate of the Custodian (hereinafter
referred to as "Banking Institutions"), and in such amounts as such Fund
may direct pursuant to Instructions. Such Interest Bearing Deposits may be
denominated in U.S. dollars or other currencies, as such Fund may determine
and direct pursuant to Instructions. The responsibilities of the Custodian
to a Fund for Interest Bearing Deposits issued by the Custodian shall be
that of a U.S. bank for a similar deposit. With respect to Interest
Bearing Deposits other than those issued by the Custodian, (a) the
Custodian shall be responsible for the collection of income and the
transmission of cash to and from such accounts; and (b) the Custodian shall
have no duty with respect to the selection of the Banking Institution or
for the failure of such Banking Institution to pay upon demand.
(m) FOREIGN EXCHANGE TRANSACTIONS.
(l) Each Fund hereby appoints the Custodian as its agent in
the execution of all currency exchange transactions. The Custodian agrees
to provide exchange rate and U.S. Dollar information, in writing, to the
Funds. Such information shall be supplied by the Custodian at least by the
business day prior to the value date of the foreign exchange transaction,
provided that the Custodian receives the request for such information at
least two business days prior to the value date of the transaction.
(2) Upon receipt of Instructions, the Custodian shall settle
foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf of and for the account of
a Fund with such currency brokers or Banking Institutions as such Fund may
determine and direct pursuant to Instructions. If, in its Instructions, a
Fund does not direct the Custodian to utilize a particular currency broker
or Banking Institution, the Custodian is authorized to select such currency
broker or Banking Institution as it deems appropriate to execute the Fund's
foreign currency transaction.
(3) Each Fund accepts full responsibility for its use of third
party foreign exchange brokers and for execution of said foreign exchange
contracts and understands that the Fund shall be responsible for any and
all costs and interest charges which may be incurred as a result of the
failure or delay of its third party broker to deliver foreign exchange.
The Custodian shall have no responsibility or liability with respect to the
selection of the currency brokers or Banking Institutions with which a Fund
deals or the performance of such brokers or Banking Institutions.
(4) Notwithstanding anything to the contrary contained herein,
upon receipt of Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
(5) The Custodian shall not be obligated to enter into foreign
exchange transactions as principal. However, if the Custodian has made
available to a Fund its services as a principal in foreign exchange
transactions and subject to any separate agreement between the parties
relating to such transactions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell foreign currencies for
spot and future delivery on behalf of and for the account of the Fund, with
the Custodian as principal.
(n) PLEDGES OR LOANS OF SECURITIES.
(1) Upon receipt of Instructions from a Fund, the Custodian
will release or cause to be released Securities held in custody to the
pledgees designated in such Instructions by way of pledge or hypothecation
to secure loans incurred by such Fund with various lenders including but
not limited to UMB Bank, n.a.; provided, however, that the Securities shall
be released only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is required to secure
existing borrowings, further Securities may be released or delivered, or
caused to be released or delivered for that purpose upon receipt of
Instructions. Upon receipt of Instructions, the Custodian will pay, but
only from funds available for such purpose, any such loan upon re-delivery
to it of the Securities pledged or hypothecated therefor and upon surrender
of the note or notes evidencing such loan. In lieu of delivering
collateral to a pledgee, the Custodian, on the receipt of Instructions,
shall transfer the pledged Securities to a segregated account for the
benefit of the pledgee.
(2) Upon receipt of Special Instructions, and execution of a
separate Securities Lending Agreement, the Custodian will release
Securities held in custody to the borrower designated in such Instructions
and may, except as otherwise provided below, deliver such Securities prior
to the receipt of collateral, if any, for such borrowing, provided that, in
case of loans of Securities held by a Securities System that are secured by
cash collateral, the Custodian's instructions to the Securities System
shall require that the Securities System deliver the Securities of the
appropriate Fund to the borrower thereof only upon receipt of the
collateral for such borrowing. The Custodian shall have no responsibility
or liability for any loss arising from the delivery of Securities prior to
the receipt of collateral. Upon receipt of Instructions and the loaned
Securities, the Custodian will release the collateral to the borrower.
(o) STOCK DIVIDENDS, RIGHTS, ETC.
The Custodian shall receive and collect all stock dividends, rights,
and other items of like nature and, upon receipt of Instructions, take
action with respect to the same as directed in such Instructions.
(p) ROUTINE DEALINGS.
The Custodian will, in general, attend to all routine and mechanical
matters in accordance with industry standards in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings with
Securities or other property of each Fund except as may be otherwise
provided in this Agreement or directed from time to time by Instructions
from any particular Fund. The Custodian may also make payments to itself
or others from the Assets for disbursements and out-of-pocket expenses
incidental to handling Securities or other similar items relating to its
duties under this Agreement, provided that all such payments shall be
accounted for to the appropriate Fund.
(q) COLLECTIONS.
The Custodian shall (a) collect amounts due and payable to each Fund
with respect to portfolio Securities and other Assets; (b) promptly credit
to the account of each Fund all income and other payments relating to
portfolio Securities and other Assets held by the Custodian hereunder upon
Custodian's receipt of such income or payments or as otherwise agreed in
writing by the Custodian and any particular Fund; (c) promptly endorse and
deliver any instruments required to effect such collection; and (d)
promptly execute ownership and other certificates and affidavits for all
federal, state, local and foreign tax purposes in connection with receipt
of income or other payments with respect to portfolio Securities and other
Assets, or in connection with the transfer of such Securities or other
Assets; provided, however, that with respect to portfolio Securities
registered in so-called street name, or physical Securities with variable
interest rates, the Custodian shall use its best efforts to collect amounts
due and payable to any such Fund. The Custodian shall notify a Fund in
writing by facsimile transmission or in such other manner as such Fund and
Custodian may agree in writing if any amount payable with respect to
portfolio Securities or other Assets is not received by the Custodian when
due. The Custodian shall not be responsible for the collection of amounts
due and payable with respect to portfolio Securities or other Assets that
are in default.
(r) BANK ACCOUNTS.
Upon Instructions, the Custodian shall open and operate a bank
account or accounts on the books of the Custodian; provided that such bank
account(s) shall be in the name of the Custodian or a nominee thereof, for
the account of one or more Funds, and shall be subject only to draft or
order of the Custodian. The responsibilities of the Custodian to any one
or more such Funds for deposits accepted on the Custodian's books shall be
that of a U.S. bank for a similar deposit.
(s) DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS.
To enable each Fund to pay dividends or other distributions to
shareholders of each such Fund and to make payment to shareholders who have
requested repurchase or redemption of their shares of each such Fund
(collectively, the "Shares"), the Custodian shall release cash or
Securities insofar as available. In the case of cash, the Custodian shall,
upon the receipt of Instructions, transfer such funds by check or wire
transfer to any account at any bank or trust company designated by each
such Fund in such Instructions. In the case of Securities, the Custodian
shall, upon the receipt of Special Instructions, make such transfer to any
entity or account designated by each such Fund in such Special
Instructions.
(t) PROCEEDS FROM SHARES SOLD.
The Custodian shall receive funds representing cash payments received
for shares issued or sold from time to time by each Fund, and shall credit
such funds to the account of the appropriate Fund. The Custodian shall
notify the appropriate Fund of Custodian's receipt of cash in payment for
shares issued by such Fund by facsimile transmission or in such other
manner as such Fund and the Custodian shall agree. Upon receipt of
Instructions, the Custodian shall: (a) deliver all federal funds received
by the Custodian in payment for shares as may be set forth in such
Instructions and at a time agreed upon between the Custodian and such Fund;
and (b) make federal funds available to a Fund as of specified times agreed
upon from time to time by such Fund and the Custodian, in the amount of
checks received in payment for shares which are deposited to the accounts
of such Fund.
(u) PROXIES AND NOTICES; COMPLIANCE WITH THE SHAREHOLDERS
COMMUNICATION ACT OF 1985.
The Custodian shall deliver or cause to be delivered to the
appropriate Fund all forms of proxies, all notices of meetings, and any
other notices or announcements affecting or relating to Securities owned by
such Fund that are received by the Custodian, any Subcustodian, or any
nominee of either of them, and, upon receipt of Instructions, the Custodian
shall execute and deliver, or cause such Subcustodian or nominee to execute
and deliver, such proxies or other authorizations as may be required.
Except as directed pursuant to Instructions, neither the Custodian nor any
Subcustodian or nominee shall vote upon any such Securities, or execute any
proxy to vote thereon, or give any consent or take any other action with
respect thereto.
The Custodian will not release the identity of any Fund to an issuer
which requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between such
issuer and any such Fund unless a particular Fund directs the Custodian
otherwise in writing.
(v) BOOKS AND RECORDS.
The Custodian shall maintain such records relating to its activities
under this Agreement as are required to be maintained by Rule 31a-1 under
the Investment Company Act of 1940 ("xxx 0000 Xxx") and to preserve them
for the periods prescribed in Rule 31a-2 under the 1940 Act. These records
shall be open for inspection by duly authorized officers, employees or
agents (including independent public accountants) of the appropriate Fund
during normal business hours of the Custodian.
The Custodian shall provide accountings relating to its activities
under this Agreement as shall be agreed upon by each Fund and the
Custodian.
(w) OPINION OF FUND'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The Custodian shall take all reasonable action as each Fund may
request to obtain from year to year favorable opinions from each such
Fund's independent certified public accountants with respect to the
Custodian's activities hereunder and in connection with the preparation of
each such Fund's periodic reports to the SEC and with respect to any other
requirements of the SEC.
(x) REPORTS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
At the request of a Fund, the Custodian shall deliver to such Fund a
written report prepared by the Custodian's independent certified public
accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
Securities and other Assets, including cash, Securities and other Assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by such Fund and as may reasonably be obtained by
the Custodian.
(y) BILLS AND OTHER DISBURSEMENTS.
Upon receipt of Instructions, the Custodian shall pay, or cause to be
paid, all bills, statements, or other obligations of a Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the relevant provisions of this
Agreement, the Custodian may appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Special Subcustodians, or Interim Subcustodians (as
each are hereinafter defined) to act on behalf of any one or more Funds. A
Domestic Subcustodian, in accordance with the provisions of this Agreement,
may also appoint a Foreign Subcustodian, Special Subcustodian, or Interim
Subcustodian to act on behalf of any one or more Funds. For purposes of
this Agreement, all Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians and Interim Subcustodians shall be referred to collectively
as "Subcustodians".
(a) DOMESTIC SUBCUSTODIANS.
The Custodian may, at any time and from time to time, appoint any
bank as defined in Section 2(a)(5) of the 1940 Act or any trust company or
other entity, any of which meet the requirements of a custodian under
Section 17(f) of the 1940 Act and the rules and regulations thereunder, to
act for the Custodian on behalf of any one or more Funds as a subcustodian
for purposes of holding Assets of such Fund(s) and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"). Each Fund shall approve in writing the appointment of the
proposed Domestic Subcustodian; and the Custodian's appointment of any such
Domestic Subcustodian shall not be effective without such prior written
approval of the Fund(s). Each such duly approved Domestic Subcustodian
shall be listed on Appendix A attached hereto, as it may be amended, from
time to time.
(b) FOREIGN SUBCUSTODIANS.
The Custodian may at any time appoint, or cause a Domestic
Subcustodian to appoint, any bank, trust company or other entity meeting
the requirements of an "eligible foreign custodian" under Section 17(f) of
the 1940 Act and the rules and regulations thereunder to act for the
Custodian on behalf of any one or more Funds as a subcustodian or
sub-subcustodian (if appointed by a Domestic Subcustodian) for purposes of
holding Assets of the Fund(s) and performing other functions of the
Custodian in countries other than the United States of America (hereinafter
referred to as a "Foreign Subcustodian" in the context of either a
subcustodian or a sub-subcustodian); provided that the Custodian shall have
obtained written confirmation from each Fund of the approval of the Board
of Directors or other governing body of each such Fund (which approval may
be withheld in the sole discretion of such Board of Directors or other
governing body or entity) with respect to (i) the identity of any proposed
Foreign Subcustodian (including branch designation), (ii) the country or
countries in which, and the securities depositories or clearing agencies
(hereinafter "Securities Depositories and Clearing Agencies"), if any,
through which, the Custodian or any proposed Foreign Subcustodian is
authorized to hold Securities and other Assets of each such Fund, and (iii)
the form and terms of the subcustodian agreement to be entered into with
such proposed Foreign Subcustodian. Each such duly approved Foreign
Subcustodian and the countries where and the Securities Depositories and
Clearing Agencies through which they may hold Securities and other Assets
of the Fund(s) shall be listed on Appendix A attached hereto, as it may be
amended, from time to time. Each Fund shall be responsible for informing
the Custodian sufficiently in advance of a proposed investment which is to
be held in a country in which no Foreign Subcustodian is authorized to act,
in order that there shall be sufficient time for the Custodian, or any
Domestic Subcustodian, to effect the appropriate arrangements with a
proposed Foreign Subcustodian, including obtaining approval as provided in
this Section 5(b). In connection with the appointment of any Foreign
Subcustodian, the Custodian shall, or shall cause the Domestic Subcustodian
to, enter into a subcustodian agreement with the Foreign Subcustodian in
form and substance approved by each such Fund. The Custodian shall not
consent to the amendment of, and shall cause any Domestic Subcustodian not
to consent to the amendment of, any agreement entered into with a Foreign
Subcustodian, which materially affects any Fund's rights under such
agreement, except upon prior written approval of such Fund pursuant to
Special Instructions.
(c) INTERIM SUBCUSTODIANS.
Notwithstanding the foregoing, in the event that a Fund shall invest
in an Asset to be held in a country in which no Foreign Subcustodian is
authorized to act, the Custodian shall notify such Fund in writing by
facsimile transmission or in such other manner as such Fund and the
Custodian shall agree in writing of the unavailability of an approved
Foreign Subcustodian in such country; and upon the receipt of Special
Instructions from such Fund, the Custodian shall, or shall cause its
Domestic Subcustodian to, appoint or approve an entity (referred to herein
as an "Interim Subcustodian") designated in such Special Instructions to
hold such Security or other Asset.
(d) SPECIAL SUBCUSTODIANS.
Upon receipt of Special Instructions, the Custodian shall, on behalf
of a Fund, appoint one or more banks, trust companies or other entities
designated in such Special Instructions to act for the Custodian on behalf
of such Fund as a subcustodian for purposes of: (i) effecting third-party
repurchase transactions with banks, brokers, dealers or other entities
through the use of a common custodian or subcustodian; (ii) providing
depository and clearing agency services with respect to certain variable
rate demand note Securities, (iii) providing depository and clearing agency
services with respect to dollar denominated Securities, and (iv) effecting
any other transactions designated by such Fund in such Special
Instructions. Each such designated subcustodian (hereinafter referred to
as a "Special Subcustodian") shall be listed on Appendix A attached hereto,
as it may be amended from time to time. In connection with the appointment
of any Special Subcustodian, the Custodian shall enter into a subcustodian
agreement with the Special Subcustodian in form and substance approved by
the appropriate Fund in Special Instructions. The Custodian shall not
amend any subcustodian agreement entered into with a Special Subcustodian,
or waive any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
(e) TERMINATION OF A SUBCUSTODIAN.
The Custodian may, at any time in its discretion upon notification to
the appropriate Fund(s), terminate any Subcustodian of such Fund(s) in
accordance with the termination provisions under the applicable
subcustodian agreement, and upon the receipt of Special Instructions, the
Custodian will terminate any Subcustodian in accordance with the
termination provisions under the applicable subcustodian agreement.
(f) CERTIFICATION REGARDING FOREIGN SUBCUSTODIANS.
Upon request of a Fund, the Custodian shall deliver to such Fund a
certificate stating: (i) the identity of each Foreign Subcustodian then
acting on behalf of the Custodian; (ii) the countries in which and the
Securities Depositories and Clearing Agencies through which each such
Foreign Subcustodian is then holding cash, Securities and other Assets of
such Fund; and (iii) such other information as may be requested by such
Fund, and as the Custodian shall be reasonably able to obtain, to evidence
compliance with rules and regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) GENERAL STANDARD OF CARE.
The Custodian shall be liable to a Fund for all losses, damages and
reasonable costs and expenses suffered or incurred by such Fund resulting
from the custodian's failure to act in good faith. "Good faith", for
purposes of this Agreement, shall have the meaning set forth in section
400.1-201(19) RS-Mo.
(b) ACTIONS PROHIBITED BY APPLICABLE LAW, EVENTS BEYOND CUSTODIAN'S
CONTROL, SOVEREIGN RISK, ETC.
In no event shall the Custodian or any Domestic Subcustodian incur
liability hereunder (i) if the Custodian or any Subcustodian or Securities
System, or any subcustodian, Securities System, Securities Depository or
Clearing Agency utilized by the Custodian or any such Subcustodian, or any
nominee of the Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to perform, any
act or thing which this Agreement provides shall be performed or omitted to
be performed, by reason of: (a) any provision of any present or future law
or regulation or order of the United States of America, or any state
thereof, or of any foreign country, or political subdivision thereof or of
any court of competent jurisdiction (and neither the Custodian nor any
other Person shall be obligated to take any action contrary thereto); or
(b) any event beyond the control of the Custodian or other Person such as
armed conflict, riots, strikes, lockouts, labor disputes, equipment or
transmission failures, natural disasters, or failure of the mails,
transportation, communications or power supply; or (ii) for any loss,
damage, cost or expense resulting from "Sovereign Risk." A "Sovereign
Risk" shall mean nationalization, expropriation, currency devaluation,
revaluation or fluctuation, 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 a Fund's Assets; or acts of armed
conflict, terrorism, insurrection or revolution; or any other act or event
beyond the Custodian's or such other Person's control.
(c) LIABILITY FOR PAST RECORDS.
Neither the Custodian nor any Domestic Subcustodian shall have any
liability in respect of any loss, damage or expense suffered by a Fund,
insofar as such loss, damage or expense arises from the performance of the
Custodian or any Domestic Subcustodian in reliance upon records that were
maintained for such Fund by entities other than the Custodian or any
Domestic Subcustodian prior to the Custodian's employment hereunder.
(d) ADVICE OF COUNSEL.
The Custodian and all Domestic Subcustodians shall be entitled to
receive and act upon advice of counsel of its own choosing on all matters.
The Custodian and all Domestic Subcustodians shall be without liability for
any actions taken or omitted in good faith pursuant to the advice of
counsel.
(e) ADVICE OF THE FUND AND OTHERS.
The Custodian and any Domestic Subcustodian may rely upon the advice
of any Fund and upon statements of such Fund's accountants and other
persons believed by it in good faith to be expert in matters upon which
they are consulted, and neither the Custodian nor any Domestic Subcustodian
shall be liable for any actions taken or omitted, in good faith, pursuant
to such advice or statements.
(f) INSTRUCTIONS APPEARING TO BE GENUINE.
The Custodian and all Domestic Subcustodians shall be fully protected
and indemnified in acting as a custodian hereunder upon any Resolutions of
the Board of Directors or Trustees, Instructions, Special Instructions,
advice, notice, request, consent, certificate, instrument or paper
appearing in its good faith judgement to be genuine and to have been
properly executed and shall, unless otherwise specifically provided herein,
be entitled to receive as conclusive proof of any fact or matter required
to be ascertained from any Fund hereunder a certificate signed by any
officer of such Fund authorized to countersign or confirm Special
Instructions.
(g) EXCEPTIONS FROM LIABILITY.
Without limiting the generality of any other provisions hereof,
neither the Custodian nor any Domestic Subcustodian shall be under any duty
or obligation to inquire into, nor be liable for:
(i) the validity of the issue of any Securities purchased by
or for any Fund, the legality of the purchase thereof or evidence of
ownership required to be received by any such Fund, or the propriety of the
decision to purchase or amount paid therefor;
(ii) the legality of the sale of any Securities by or for
any Fund, or the propriety of the amount for which the same were sold; or
(iii) any other expenditures, encumbrances of Securities,
borrowings or similar actions with respect to any Fund's Assets;
and may, until notified to the contrary, presume that all Instructions or
Special Instructions received by it are not in conflict with or in any way
contrary to any provisions of any such Fund's Declaration of Trust,
Partnership Agreement, Articles of Incorporation or By-Laws or votes or
proceedings of the shareholders, trustees, partners or directors of any
such Fund, or any such Fund's currently effective Registration Statement on
file with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) DOMESTIC SUBCUSTODIANS
The Custodian shall be liable for the acts or omissions of any
Domestic Subcustodian to the same extent as if such actions or omissions
were performed by the Custodian itself.
(b) LIABILITY FOR ACTS AND OMISSIONS OF FOREIGN SUBCUSTODIANS.
The Custodian shall be liable to a Fund for any loss or damage to
such Fund caused by or resulting from the acts or omissions of any Foreign
Subcustodian to the extent that, under the terms set forth in the
subcustodian agreement between the Custodian or a Domestic Subcustodian and
such Foreign Subcustodian, the Foreign Subcustodian has failed to perform
in accordance with the standard of conduct imposed under such subcustodian
agreement and the Custodian or Domestic Subcustodian recovers from the
Foreign Subcustodian under the applicable subcustodian agreement.
(c) SECURITIES SYSTEMS, INTERIM SUBCUSTODIANS, SPECIAL
SUBCUSTODIANS, SECURITIES DEPOSITORIES AND CLEARING AGENCIES.
The Custodian shall not be liable to any Fund for any loss, damage or
expense suffered or incurred by such Fund resulting from or occasioned by
the actions or omissions of a Securities System, Interim Subcustodian,
Special Subcustodian, or Securities Depository and Clearing Agency unless
such loss, damage or expense is caused by, or results from, the custodian's
failure to act in good faith.
(d) DEFAULTS OR INSOLVENCY'S OF BROKERS, BANKS, ETC.
The Custodian shall not be liable for any loss, damage or expense
suffered or incurred by any Fund resulting from or occasioned by the
actions, omissions, neglects, defaults or insolvency of any broker, bank,
trust company or any other person with whom the Custodian may deal (other
than any of such entities acting as a Subcustodian, Securities System or
Securities Depository and Clearing Agency, for whose actions the liability
of the Custodian is set out elsewhere in this Agreement) unless such loss,
damage or expense is caused by, or results from, the custodian's failure to
act in good faith.
(e) REIMBURSEMENT OF EXPENSES.
Each Fund agrees to reimburse the Custodian for all reasonable
out-of-pocket expenses incurred by the Custodian in connection with this
Agreement, but excluding salaries and usual overhead expenses.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY FUND.
Subject to the limitations set forth in this Agreement, each Fund
agrees to indemnify and hold harmless the Custodian and its nominees from
all losses, damages and expenses (including attorneys' fees) suffered or
incurred by the Custodian or its nominee caused by or arising from actions
taken by the Custodian, its employees or agents in the performance of its
duties and obligations under this Agreement, including, but not limited to,
any indemnification obligations undertaken by the Custodian under any
relevant subcustodian agreement; provided, however, that such indemnity
shall not apply to the extent the Custodian is liable under Sections 6 or 7
hereof.
If any Fund requires the Custodian to take any action with respect to
Securities, which action involves the payment of money or which may, in the
opinion of the Custodian, result in the Custodian or its nominee assigned
to such Fund being liable for the payment of money or incurring liability
of some other form, such 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.
(b) INDEMNIFICATION BY CUSTODIAN.
Subject to the limitations set forth in this Agreement and in
addition to the obligations provided in Sections 6 and 7, the Custodian
agrees to indemnify and hold harmless each Fund from all losses, damages
and expenses suffered or incurred by each such Fund caused by the
custodian's failure to act in good faith.
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian or any
Subcustodian, Securities System, or Securities Depository or Clearing
Agency acting either directly or indirectly under agreement with the
Custodian (each of which for purposes of this Section 9 shall be referred
to as "Custodian"), makes any payment or transfer of funds on behalf of any
Fund as to which there would be, at the close of business on the date of
such payment or transfer, insufficient funds held by the Custodian on
behalf of any such Fund, the Custodian may, in its discretion without
further Instructions, provide an advance ("Advance") to any such Fund in an
amount sufficient to allow the completion of the transaction by reason of
which such payment or transfer of funds is to be made. In addition, in the
event the Custodian is directed by Instructions to make any payment or
transfer of funds on behalf of any Fund as to which it is subsequently
determined that such Fund has overdrawn its cash account with the Custodian
as of the close of business on the date of such payment or transfer, said
overdraft shall constitute an Advance. Any Advance shall be payable by the
Fund on behalf of which the Advance was made on demand by Custodian, unless
otherwise agreed by such Fund and the Custodian, and shall accrue interest
from the date of the Advance to the date of payment by such Fund to the
Custodian at a rate agreed upon in writing from time to time by the
Custodian and such Fund. It is understood that any transaction in respect
of which the Custodian shall have made an Advance, including but not
limited to a foreign exchange contract or transaction in respect of which
the Custodian is not acting as a principal, is for the account of and at
the risk of the Fund on behalf of which the Advance was made, and not, by
reason of such Advance, deemed to be a transaction undertaken by the
Custodian for its own account and risk. The Custodian and each of the
Funds which are parties to this Agreement acknowledge that the purpose of
Advances is to finance temporarily the purchase or sale of Securities for
prompt delivery in accordance with the settlement terms of such
transactions or to meet emergency expenses not reasonably foreseeable by a
Fund. The Custodian shall promptly notify the appropriate Fund of any
Advance. Such notification shall be sent by facsimile transmission or in
such other manner as such Fund and the Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the Custody Account to
secure payment of fees and expenses for the services rendered under this
Agreement. If the Bank advances cash or securities to the Fund for any
purpose or in the event that the Bank or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities
in connection with the performance of its duties hereunder, except such as
may arise from its or its nominee's negligent action, negligent failure to
act or willful misconduct, any Property at any time held for the Custody
Account shall be security therefor and the Fund hereby grants a security
interest therein to the Bank. The Fund shall promptly reimburse the Bank
for any such advance of cash or securities or any such taxes, charges,
expenses, assessments, claims or liabilities upon request for payment, but
should the Fund fail to so reimburse the Bank, the Bank shall be entitled
to dispose of such Property to the extent necessary to obtain
reimbursement. The Bank shall be entitled to debit any account of the Fund
with the Bank including, without limitation, the Custody Account, in
connection with any such advance and any interest on such advance as the
Bank deems reasonable.
11. COMPENSATION.
Each Fund will pay to the Custodian such compensation as is agreed to
in writing by the Custodian and each such Fund from time to time. Such
compensation, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 7(e), shall be billed to each such
Fund and paid in cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the Custodian such proxies,
powers of attorney or other instruments as may be reasonable and necessary
or desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
13. TERMINATION AND ASSIGNMENT.
Any Fund or the Custodian may terminate this Agreement by notice in
writing, delivered or mailed, postage prepaid (certified mail, return
receipt requested) to the other not less than 90 days prior to the date
upon which such termination shall take effect. Upon termination of this
Agreement, the appropriate Fund shall pay to the Custodian such fees as may
be due the Custodian hereunder as well as its reimbursable disbursements,
costs and expenses paid or incurred. Upon termination of this Agreement,
the Custodian shall deliver, at the terminating party's expense, all Assets
held by it hereunder to the appropriate Fund or as otherwise designated by
such Fund by Special Instructions. Upon such delivery, the Custodian shall
have no further obligations or liabilities under this Agreement except as
to the final resolution of matters relating to activity occurring prior to
the effective date of termination.
This Agreement may not be assigned by the Custodian or any Fund
without the respective consent of the other, duly authorized by a
resolution by its Board of Directors or Trustees.
14. ADDITIONAL FUNDS.
An additional Fund or Funds may become a party to this Agreement
after the date hereof by an instrument in writing to such effect signed by
such Fund or Funds and the Custodian. If this Agreement is terminated as
to one or more of the Funds (but less than all of the Funds) or if an
additional Fund or Funds shall become a party to this Agreement, there
shall be delivered to each party an Appendix B or an amended Appendix B,
signed by each of the additional Funds (if any) and each of the remaining
Funds as well as the Custodian, deleting or adding such Fund or Funds, as
the case may be. The termination of this Agreement as to less than all of
the Funds shall not affect the obligations of the Custodian and the
remaining Funds hereunder as set forth on the signature page hereto and in
Appendix B as revised from time to time.
15. NOTICES.
As to each Fund, notices, requests, instructions and other writings
delivered to Zazove Convertible Securities Fund, Inc., c/o Zazove
Associates, LLC, 0000 X. Xxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, postage
prepaid, or to such other address as any particular Fund may have
designated to the Custodian in writing, shall be deemed to have been
properly delivered or given to a Fund.
Notices, requests, instructions and other writings delivered to the
Securities Administration department of the Custodian at its office at 000
Xxxxx Xxxx., 10th Floor, Attn: Xxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000,
or mailed postage prepaid, to the Custodian's Securities Administration
department, Post Office Box 226, Attn: Xxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, or to such other addresses as the Custodian may have designated to
each Fund in writing, shall be deemed to have been properly delivered or
given to the Custodian hereunder; provided, however, that procedures for
the delivery of Instructions and Special Instructions shall be governed by
Section 2(c) hereof.
16. MISCELLANEOUS.
(a) This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of such state.
(b) All of the terms and provisions of this Agreement shall be
binding upon, and inure to the benefit of, and be enforceable by the
respective successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be amended, modified or
waived, in any manner except in writing, properly executed by both parties
hereto; provided, however, Appendix A may be amended from time to time as
Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians, and
Securities Depositories and Clearing Agencies are approved or terminated
according to the terms of this Agreement.
(d) 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.
(e) This Agreement shall be effective as of the date of execution
hereof.
(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(g) The following terms are defined terms within the meaning of this
Agreement, and the definitions thereof are found in the following sections
of the Agreement:
TERM SECTION
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2(b)
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2(c)(1)
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
Liens 10
OCC 4(g)(1)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2(a)
Securities Depositories and
Clearing Agencies 5(b)
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2(c)(2)
Special Subcustodian 5(d)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid by any court of
competent jurisdiction, the remaining portion or portions shall be
considered severable and shall not be affected, and the rights and
obligations of the parties shall be construed and enforced as if this
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(i) This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof,
and accordingly supersedes, as of the effective date of this Agreement, any
custodian agreement heretofore in effect between the Fund and the
Custodian.
IN WITNESS WHEREOF, the parties hereto have caused this Custody
Agreement to be executed by their respective duly authorized officers.
ZAZOVE CONVERTIBLE SECURITIES
FUND, INC.
Attest: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Secretary and Director
Date: January 1, 1999
UMB BANK, N.A.
Attest: /s/ X.X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Date: January 1, 1999
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
Xxxxxx Xxxxxxx Trust Company (Foreign Securities Only)
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
--------- --------------------- -----------------
Euroclear
ZAZOVE CONVERTIBLE SECURITIES UMB BANK, N.A.
FUND, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Secretary and Director Title: Senior Vice President
Date: January 1, 1999 Date: January 1, 0000
XXXXXXXX X
CUSTODY AGREEMENT
The following open-end management investment companies ("Funds") are
hereby made parties to the Custody Agreement dated January 1, 1999, with
UMB Bank, n.a. ("Custodian") and Zazove Convertible Securities Fund, Inc.,
and agree to be bound by all the terms and conditions contained in said
Agreement:
ZAZOVE CONVERTIBLE SECURITIES FUND, INC.
ZAZOVE CONVERTIBLE SECURITIES
FUND, INC.
Attest: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Secretary and Director
Date: January 1, 1999
UMB BANK, N.A.
Attest: /s/ X.X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Date: January 1, 1999
