EX-99.B(g)hica
CUSTODIAN AGREEMENT
Dated as of November 26, 1991
Amended and Restated as of May 13, 1998
Between
UMB BANK, n.a.
and
UNITED HIGH INCOME FUND, INC.
Table of Contents
ARTICLE
I. Appointment of Custodian
II. Powers and Duties of Custodian
2.01 Safekeeping
2.02 Manner of Holding Securities
2.03 Purchase of Assets
2.04 Exchanges of Securities
2.05 Sales of Securities
2.06 Depositary Receipts
2.07 Exercise of Rights, Tender Offers, Etc.
2.08 Stock Dividends, Rights, Etc.
2.09 Options
2.10 Futures Contracts
2.11 Borrowing
2.12 Interest Bearing Deposits
2.13 Foreign Exchange Transactions
2.14 Securities Loans
2.15 Collections
2.16 Dividends, Distributions and Redemptions
2.17 Proceeds from Shares Sold
2.18 Proxies, Notices, Etc.
2.19 Bills and Other Disbursements
2.20 Nondiscretionary Functions
2.21 Bank Accounts
2.22 Deposit of Fund Assets in Securities System
2.23 Other Transfers
2.24 Establishment of Segregated Account
2.25 Custodian's Books and Records
2.26 Opinion of Fund's Independent
Certified Public Accountants
2.27 Reports by Independent Certified Public
Accountants
2.28 Overdraft Facility
III. Proper Instructions, Special Instructions
and Related Matters
3.01 Proper Instruction and Special Instructions
3.02 Authorized Persons
3.03 Persons Having Access to Assets of the Portfolios
3.04 Actions of Custodian Based on Proper
Instructions and Special Instructions
IV. Subcustodians
4.01 Domestic Subcustodians
4.02 Foreign Sub-Subcustodians and
Interim Sub-Subcustodians
4.03 Special Subcustodians
4.04 Termination of a Subcustodian
4.05 Certification Regarding Foreign Sub-Subcustodians
V. Standard of Care, Indemnification
5.01 Standard of Care
5.02 Liability of the Custodian for Actions
of Other Persons
5.03 Indemnification by Fund
5.04 Investment Limitations
5.05 Fund's Right to Proceed
5.06 Indemnification by Custodian
5.07 Custodian's Right to Proceed
VI. Compensation
VII. Termination
VIII. Defined Terms
IX. Miscellaneous
9.01 Execution of Documents, Etc.
9.02 Representations and Warranties
9.03 Entire Agreement
9.04 Waivers and Amendments
9.05 Interpretation
9.06 Captions
9.07 Governing Law
9.08 Notices
9.09 Assignment
9.10 Counterparts
9.11 Confidentiality; Survival of Obligations
Appendix "A"
CUSTODIAN AGREEMENT
AGREEMENT made as of the 26th day of November, 1991 between United
High Income Fund, Inc. (the "Fund") and UMB Bank, n.a., formerly, United
Missouri Bank, n.a. (the "Custodian") and as amended and restated as of May 13,
1998.
WITNESSETH
WHEREAS, the Fund desires to appoint the Custodian as custodian on
behalf of the Fund in accordance with the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act") and the rules and
regulations thereunder, under the terms and conditions set forth in this
Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
Subject to the terms and provisions of this Agreement, the Fund
hereby employs and appoints the Custodian as a custodian of the cash,
securities and other assets owned by the Fund and deposited from time to time
with the Custodian ("Assets"). The Fund shall deliver to the Custodian, or
shall cause to be delivered to the Custodian, Assets during the term of this
Agreement. The Custodian is authorized to act under the terms and conditions
of this Agreement as the Fund's agent and shall be representing the Fund when
acting within the scope of this Agreement. The Custodian hereby accepts such
appointment as custodian and shall perform the duties and responsibilities
set forth herein on the terms and conditions set forth herein.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties set forth in this Article II. Pursuant to and in accordance with
Article IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall accept delivery
of and keep safely the Assets in accordance with the terms and conditions
hereof on behalf of the Fund.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of the 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 Section 2.22 below.
(b) The Custodian may at all times hold registered securities of the
Fund in the name of the Fund or the Fund's nominee, or in the nominee name of
the Custodian unless specifically directed by Proper Instructions (as
hereinafter defined) to hold such registered securities in so-called street
name; provided that, in any event, all Assets shall be held in an account of
the Custodian containing only assets of the Fund. Notwithstanding the
foregoing, unless it receives Proper Instructions to the contrary, the
Custodian shall register all securities in the name of the Custodian's
nominee as authorized by the Fund. All securities held directly or indirectly
by the Custodian hereunder shall at all times be identifiable on the records
of the Custodian. Except as otherwise provided herein, the Custodian shall
keep the Assets physically segregated from those of other persons or
entities. The Custodian shall execute and deliver all certificates and
documents in connection with registration of securities as may be required by
the applicable provisions of the Internal Revenue Code, the laws of any State
or territory of the United States and the laws of any jurisdiction in which
the securities are held.
Section 2.03. Purchase of Assets.
(a) Security Purchases. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive securities purchased for the account of
the Fund, provided that payment shall be made by Custodian only upon receipt
of the securities: (a) by the Custodian; (b) by a clearing corporation of a
national securities exchange of which the Custodian is a member; or (c) by a
Securities System. Notwithstanding the foregoing, upon receipt of Proper
Instructions: (i) in the case of 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 (as hereinafter defined)
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 the Account; (ii) in the case of time deposits,
call account deposits, currency deposits and other deposits, foreign exchange
transactions, futures contracts or options, pursuant to Sections 2.09, 2.10,
2.12 and 2.13 hereof, the Custodian may make payment therefor before receipt
of an advice or transaction; and (iii) in the case of the purchase of
securities, the settlement of which occurs outside of the United States of
America, the Custodian may make payment therefor and receive delivery of such
securities in accordance with local custom and practice generally accepted by
Institutional Clients (as hereinafter defined) in the country in which the
settlement occurs, but in all events subject to the standard of care set
forth in Article V hereof. For purposes of this Agreement, an "Institutional
Client" shall mean a major commercial bank, corporation, insurance company,
or substantially similar institution, which, as a substantial part of its
business operations, purchases or sells securities and makes use of custodial
services.
(b) Other Asset Purchases. Upon receipt of Proper Instructions and
except as otherwise provided herein, the Custodian shall pay for and receive
other Assets for the account of the Fund as provided in Proper Instructions.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of the Fund for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall, without
receiving Proper Instructions: surrender securities for transfer into the
name of the Fund, the Fund's nominee or the nominee name of the Custodian as
permitted by Section 2.02(b); and surrender securities for a different number
of certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided that the securities to be issued
will be delivered to the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper
Instructions, the Custodian shall make delivery of securities which have been
sold for the account of the Fund, but only against 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 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities, the
settlement of which occurs outside of the United States of America, such
securities shall be delivered and paid for in accordance with local custom
and practice generally accepted by Institutional Clients in the country in
which the settlement occurs, but in all events subject to the standard of
care set forth in Article V hereof; and (ii) in the case of securities held
in physical form, such securities shall 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, subject to the standard of
care set forth in Article V hereof, the Custodian shall not be responsible
for the selection of or the failure or inability to perform of such broker or
its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper
Instructions, the Custodian shall surrender 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 Custodian 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 to the Custodian at such place as the Custodian may
from time to time designate. Upon receipt of Proper Instructions, the
Custodian shall surrender ADRs to the issuer thereof, against a written
receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights, Tender Offers, Etc. Upon receipt
of Proper 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 promptly notify the Fund in writing of (i) any default in
payment of funds on securities; (ii) any securities that have matured, been
called or redeemed; and (iii) to the extent the Custodian has notice which is
contained in services to which it normally subscribes for such purposes, or
actual knowledge if not contained in such services, any other default
involving securities; and all announcements of defaults, bankruptcies,
reorganizations, mergers, consolidations, recapitalizations or rights or
privileges to subscribe, convert, exchange, put, redeem or tender securities
held subject to this Agreement. The Custodian shall, following receipt or
knowledge, convey such information to the Fund in a timely manner based upon
the circumstances of each particular case. Whenever any such rights or
privileges exist, the Fund will, in a timely manner based upon the
circumstances of each particular case, provide the Custodian with Proper
Instructions. Absent the Custodian's timely receipt of Proper Instructions,
the Custodian shall not be liable for not taking any action or not exercising
such rights prior to their expiration unless such failure is due to
Custodian's failure to give timely notice to the Fund in accordance with this
Section 2.07.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall
receive and collect all stock dividends, rights and other items of like
nature and, upon receipt of Proper Instructions, take action with respect to
the same as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund relating to compliance
with the rules of the Options Clearing Corporation (the "OCC") or of any
registered national securities exchange or similar organization(s), the
Custodian shall: (a) receive and retain confirmations or other documents, if
any, evidencing the purchase or writing of an option by the Fund; (b) deposit
and maintain in a segregated account, securities (either physically or by
book-entry in a Securities System), cash or other Assets; and (c) pay,
release and/or transfer such securities, cash or other Assets in accordance
with any such agreement and with notices or other communications evidencing
the expiration, termination or exercise of such options furnished by the OCC,
the securities or options exchange on which such options are traded or such
other organization as may be responsible for handling such option
transactions. The Fund and the broker-dealer shall be responsible for
determining the sufficiency 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; provided, however,
that the Custodian shall be liable for performance of its duties under this
Agreement and in accordance with Proper Instructions, and shall be liable for
performance of its duties under any other agreement between the Custodian,
any registered broker-dealer and, if necessary, the Fund. Notwithstanding
anything herein to the contrary, if the Fund issues Proper Instructions to
sell a naked option
(including stock index options), then as part of the transaction, the
Custodian, the Fund and the broker-dealer shall have entered into a tri-party
agreement, as described above.
Section 2.10. Futures Contracts. Upon receipt of Proper
Instructions, or pursuant to the provisions of any futures margin procedural
agreement among the Fund, the Custodian and any futures commission merchant
(a "Procedural Agreement"), the Custodian shall: (a) receive and retain
confirmations, if any evidencing the purchase of or sale of a futures
contract or an option on a futures contract by the Fund; (b) deposit and
maintain in a segregated account cash, securities and other Assets designated
as initial, maintenance or variation "margin" deposits intended to secure the
Fund's performance of its obligations under any futures contracts purchased
or sold or any options on futures contracts written by the Fund, in
accordance 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 Fund and such
futures commission merchant shall be responsible for determining the
sufficiency of assets held in the segregated account 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;
provided, however, that the Custodian shall be liable for performance of its
duties under this Agreement and in accordance with Proper Instructions, and
shall be liable for performance of its duties under any Procedural Agreement.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of the Fund to lenders or their agents, or
otherwise establish a segregated account as agreed to by the Fund and the
Custodian, as collateral for borrowings effected by the Fund, provided that
such borrowed money is payable by the lender (a) to or upon the Custodian's
order, as Custodian for the Fund, and (b) concurrently with delivery of such
securities.
Section 2.12. Interest Bearing Deposits. Upon receipt of Proper
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 the Fund, the Custodian shall purchase such
Interest Bearing Deposits in the name of the 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 the Fund may direct pursuant to Proper
Instructions. Such Interest Bearing Deposits may be denominated in U.S.
Dollars or other currencies, as the Fund may determine and direct pursuant to
Proper Instructions. The Custodian shall include in its records with respect
to the Assets of the Fund appropriate notation as to the amount and currency
of each such Interest Bearing Deposit, the accepting Banking Institution and
all other appropriate details, and shall retain such forms of advice or
receipt evidencing such account, if any, as may be forwarded to the Custodian
by the Banking Institution. The responsibilities of the Custodian to the Fund
for Interest Bearing Deposits accepted on the Custodian's books in the United
States shall be that of a U.S. bank for a similar deposit. With respect to
Interest Bearing Deposits other than those accepted on the Custodian's books,
(a) the Custodian shall
be responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and (b)
the Custodian shall have no duty with respect to the selection of the Banking
Institution or, so long as the Custodian acts in accordance with Proper
Instructions and the terms and conditions of this Agreement, for the failure
of such Banking Institution to pay upon demand. Upon receipt of Proper
Instructions, the Custodian shall take such reasonable actions as the Fund
deems necessary or appropriate to cause each such Interest Bearing Deposit
account to be insured to the maximum extent possible by all applicable
deposit insurers including, without limitation, the Federal Deposit Insurance
Corporation.
Section 2.13. Foreign Exchange Transactions.
(a) Foreign Exchange Transactions Other than as Principal. Upon
receipt of Proper 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 the Fund with such
currency brokers or Banking Institutions as the Fund may determine and direct
pursuant to Proper Instructions. The Fund accepts full responsibility for its
use of third party foreign exchange brokers (any dealer other than the
Foreign Subcustodian) (as hereinafter defined) 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
unless such loss, damage, or expense is caused by, or results from the
negligence, misfeasance or misconduct of the Custodian. Notwithstanding the
foregoing, the Custodian shall be responsible for the transmission of cash
and instructions to and from the currency broker or Banking Institution with
which the contract or option is made, the safekeeping of all certificates and
other documents and agreements evidencing or relating to such foreign
exchange transactions and the maintenance of proper records as set forth in
Section 2.25. The Custodian shall have no duty with respect to the selection
of the currency brokers or Banking Institutions with which the Fund deals or,
so long as the Custodian acts in accordance with Proper Instructions, for the
failure of such brokers or Banking Institutions to comply with the terms of
any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not
be obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign currencies for spot and
future delivery on behalf of and for the account of the Fund with the
Custodian as principal. The Custodian shall be responsible for the selection
of the currency brokers or Banking Institutions and the failure of such
currency brokers or Banking Institutions to comply with the terms of any
contract or option.
(c) Payments. Notwithstanding anything to the contrary contained
herein, upon receipt of Proper 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.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions,
the Custodian shall, in connection with loans of securities by the Fund,
deliver securities of the Fund to the borrower thereof and may, except as
otherwise provided below, deliver such securities prior to receipt of the
collateral, if any, for such borrowing; provided that, in cases of loans of
securities secured by cash collateral, the Custodian's instructions to the
Securities System shall require that the Securities System deliver the
securities of the Fund to the borrower thereof only upon receipt of the
collateral for such borrowing. The Custodian shall retain on the Fund's
behalf the right to any dividends, interest or distribution on such loaned
securities and any other rights specified in Proper Instructions. Upon
receipt of Proper Instructions and the loaned securities, the Custodian will
release the collateral to the borrower.
Section 2.15. Collections. The Custodian shall: (a) collect amounts
due and payable to the Fund with respect to portfolio securities and other
Assets; (b) promptly credit to the account of the 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 the 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 the Fund. The Custodian shall promptly notify the Fund in
writing by facsimile transmission or in such other manner as the 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.
Section 2.16. Dividends, Distributions and Redemptions. To enable
the Fund to pay dividends or other distributions to shareholders of the Fund
and to make payment to shareholders who have requested repurchase or
redemption of their shares of the Fund (collectively, the "Shares"), the
Custodian shall promptly release cash or securities (a) in the case of cash,
upon receipt of Proper Instructions, to one or more Distribution Accounts (as
hereinafter defined) designated by the Fund in such Proper Instructions; or
(b) in the case of securities, upon the receipt of Special Instructions (as
hereinafter defined) to such entity or account designated by the Fund in such
Special Instructions. For purposes of this Agreement, a "Distribution
Account" shall mean an account established at a Banking Institution
designated by the Fund in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from time
to time by the Fund, and shall promptly credit such funds to the account of
the Fund. The Custodian shall promptly notify the Fund of
Custodian's receipt of cash in payment for Shares issued by the Fund by
facsimile transmission or in such other manner as the Fund and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian shall:
(a) deliver all federal funds received by the Custodian in payment for Shares
in payment for such investments as may be set forth in such Proper
Instructions and at a time agreed upon between the Custodian and the Fund;
and (b) make federal funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian, in the amount of checks
received in payment for Shares which are deposited to the accounts of the
Fund.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver or
cause to be delivered to the Fund, in the most expeditious manner
practicable, all forms of proxies, all notices of meetings, and any other
notices or announcements affecting or relating to securities owned by the
Fund that are received by the Custodian, any Subcustodian, or any nominee of
either of them, and, upon receipt of Proper 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 Proper 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 the 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 the Fund unless the Fund directs the Custodian
otherwise in writing.
Section 2.19. Bills and Other Disbursements. Upon receipt of
Proper Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of the Fund.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend
to all nondiscretionary details not specifically covered by this Agreement in
accordance with industry standards in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
Assets held by the Custodian, except as otherwise directed from time to time
pursuant to Proper Instructions.
Section 2.21. Bank Accounts.
(a) Accounts with the Custodian. The Custodian shall open and
operate a bank account or accounts (hereinafter referred to collectively, as
"Bank 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 the Fund, and shall be subject only to draft or order of the
Custodian. The responsibilities of the Custodian to the Fund for deposits
accepted on the Custodian's books shall be that of a U.S. bank for a similar
deposit.
(b) Deposit Insurance. Upon receipt of Proper Instructions, the
Custodian shall take such action as the Fund deems necessary or appropriate
to cause each deposit account established by the Custodian pursuant to this
Section 2.21 to be insured to the maximum extent possible by all applicable
deposit insurers, including, without limitation, the Federal Deposit
Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by the Fund
in: (a) The Depository Trust Company; (b) the Participants Trust Company; (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; or (d) 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 Securities and Exchange Commission
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; provided, however, that no such deposit or maintenance of
securities may be made except with respect to those agencies and entities the
use of which the Fund has previously approved by Special Instructions (each
of the foregoing being referred to in this Agreement as a "Securities
System"). 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:
(A) The Custodian or any Subcustodian may deposit and/or maintain
securities held hereunder in a Securities System, provided that such
securities are represented in an account ("Account") of the Custodian in the
Securities System which Account shall not contain any assets of the Custodian
other than assets held as fiduciary, custodian or otherwise for customers.
(B) The books and records of the Custodian shall at all times
identify those securities belonging to the Fund which are maintained in a
Securities System.
(C) The Custodian shall pay for securities purchased for the account
of the Fund only upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(ii) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon (iii) receipt
of advice from the Securities System that payment for such securities has
been transferred to the Account of the Custodian, and (iv) the making of an
entry on the records of the Custodian to reflect such transfer and payment
for the account of the Fund. Copies of all advices from the Securities System
relating to transfers of securities for the account of the Fund shall
identify the Fund, and shall be maintained for the Fund by the Custodian. The
Custodian shall deliver to the Fund on the next succeeding business day daily
transaction reports which shall include each day's transactions in the
Securities System for the account of the Fund. Such transaction reports shall
be delivered to the Fund or any agent designated by the Fund pursuant to
Proper Instructions, by computer or in such other manner as the Fund and
Custodian may agree in writing.
(D) The Custodian shall, if requested by the Fund pursuant to Proper
Instructions, provide the Fund with all 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.
(E) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System (except the federal book-entry
system) on behalf of the Fund as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of the Fund
maintained with such Securities System.
Section 2.23. Other Transfers. Upon receipt of Special Instructions,
the Custodian shall make such other dispositions of securities, funds, or
other Assets of the Fund in a manner or for purposes other than as expressly
set forth in this Agreement, provided that the Special Instructions relating
to such disposition shall include a statement of the purposes for which the
delivery is to be made, the amount of funds, Assets and/or securities to be
delivered and the name of the person or persons to whom delivery is to be
made, and shall otherwise comply with the provisions of Sections 3.01 and
3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its books
a segregated account or accounts for and on behalf of the Fund, into which
account or accounts may be transferred cash and/or securities or other Assets
of the Fund, including securities maintained by the Custodian in a Securities
System pursuant to Section 2.22 hereof, said account or accounts to be
maintained: (a) for the purposes set forth in Section 2.09, 2.10 and 2.11
hereof; (b) for the purposes of compliance by the Fund with the procedures
required by Investment Company Act Release No. 10666, or any subsequent
release or releases of the SEC relating to the maintenance of segregated
accounts by registered investment companies; or (c) 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
Section 2.24.
Section 2.25. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by the Fund in the preparation of
reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete and
accurate records with respect to securities and other Assets held for the
accounts of the Fund as required by the rules and regulations of the SEC
applicable to investment companies registered under the 1940 Act, including,
but not limited to: (a) journals or other records of original entry
containing a detailed and itemized daily record of all receipts and
deliveries of securities (including certificate and transaction
identification numbers, if any), and all receipts and disbursements of cash;
(b) ledgers or other records reflecting (i) securities in transfer, (ii)
securities in physical possession, (iii) securities borrowed, loaned or
collateralizing obligations of the Fund, (iv) monies borrowed and monies
loaned (together with a record of the collateral therefor and substitutions
of such collateral), and (v) dividends and interest received; and (c)
cancelled checks and bank records relating thereto. The Custodian shall keep
such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the rules
and regulations of the SEC, including, but not limited to, books and records
required to be maintained by Section 31(a) of the 1940 Act and the rules and
regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be the property of the Fund and shall be available during normal
business hours for inspection and use by the Fund and its agents, including
without limitation, its independent certified public accountants.
Notwithstanding the preceding sentence, the Funds shall not take any actions
or cause the Custodian to take any actions which would knowingly cause,
either directly or indirectly, the Custodian to violate any applicable laws,
regulations or orders. Notwithstanding the provisions of this Section 2.25,
in the event the Fund purchases cash, securities and other Assets requiring
the use of a Domestic Subcustodian or Foreign Sub-Subcustodian, the Custodian
shall be entitled to rely upon and use the books, records and accountings of
the Domestic Subcustodian as its means of accounting to the Fund for all
cash, securities and other Assets deposited with such entities; provided
however, that such books, records and accountings on which the Bank may rely
must be maintained in the United States by such Domestic Subcustodian and,
provided further, that any agreement between the Custodian and such Domestic
Subcustodian must state that the Domestic Subcustodian agrees to make any
records available upon request and preserve, for the periods described in
Rule 31a-2 of the 1940 Act, the records required to be maintained by Rule
31a-1 of the 1940 Act. In no event shall the Custodian be entitled to rely
upon and use books, records and accountings which are maintained outside of
the United States.
Section 2.26. Opinion of Fund's Independent Certified Public
Accountants. The Custodian shall take all reasonable action as the Fund may
request to obtain from year to year favorable opinions from the Fund's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Fund's Form
N-1A and the Fund's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants.
At the request of the Fund, the Custodian shall deliver to the 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 the Fund and as may reasonably be obtained by the Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of the Fund for 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 the Fund, the Custodian may, in its sole discretion, provide an
overdraft (an "Overdraft") to the Fund in an amount sufficient to allow the
completion of such payment. Any Overdraft provided hereunder: (a) shall be
payable on the next business day, unless otherwise agreed by the Fund and the
Custodian; and (b) shall accrue interest from the date of the Overdraft to
the date of payment in full by the Fund at a rate agreed upon in writing,
from time to time, by the Custodian and the Fund. The purpose of such
Overdrafts is to temporarily finance extraordinary or emergency expenses not
reasonably foreseeable by the Fund. The Custodian
shall promptly notify the Fund in writing ("Overdraft Notice") of any
Overdraft by facsimile transmission or in such other manner as the Fund and
the Custodian may agree in writing. The Custodian shall have a right of
set-off against all Assets (except for Assets held in a segregated margin
account or otherwise pledged in connection with options or futures contracts
held for the benefit of the Fund and for Assets allocated to any other
Overdraft or loan made hereunder); provided, however, the Custodian shall
promptly notify the Fund in writing of any intent to exercise a right of
set-off against Assets hereunder and shall not exercise any such right of
set-off against Assets hereunder unless and until the Fund has failed to pay
(within ten (10) days after the Fund's receipt of such notice of intent to
exercise a right of set-off), any Overdraft, together with all accrued
interest thereon. Notwithstanding the provisions of any applicable law,
including, without limitation, the Uniform Commercial Code, the only rights
or remedies which the Custodian is entitled to with respect to Overdrafts is
the right of set-off granted herein.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" 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 the Fund by two or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or other oral
communication by one or more Authorized Persons; or (iii) a communication
effected directly between an electro-mechanical or electronic device or
system (including, without limitation, computers) by or on behalf of the Fund
by one or more Authorized Persons; provided, however, that communications of
the types described in clauses (ii) and (iii) above purporting to be given by
an Authorized Person shall be considered Proper Instructions only if the
Custodian reasonably believes such communications to have been given by an
Authorized Person with respect to the transaction involved. Proper
Instructions in the form of oral communications shall be confirmed by the
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. The Fund and the Custodian are
hereby authorized to record any and all telephonic or other oral instructions
communicated to the Custodian. Proper Instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form
of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or confirmed in
writing by the Treasurer or any Assistant Treasurer of the Fund or any other
person designated by the Treasurer of the Fund in writing, which
countersignature or confirmation shall be (i) included on the same instrument
containing the Proper Instructions or on a separate instrument relating
thereto, and (ii) delivered by hand, by facsimile transmission or in such
other manner as the Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian at
the address and/or telephone, telecopy or telex number agreed upon from time
to time by the Custodian and the Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Fund
shall deliver to the Custodian, duly certified as appropriate by a Treasurer
or Assistant Treasurer of the Fund, a certificate setting forth: (a) the
names, titles, signatures, and scope of authority of all persons authorized
to give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Fund (collectively,
the "Authorized Persons" and individually, an "Authorized Person"); and (b)
the names, titles and signatures of those persons authorized to issue Special
Instructions. Such certificate 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 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 Proper Instructions or to issue Special Instructions, such persons shall
no longer be considered an Authorized Person or authorized to issue Special
Instructions.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Director, officer, employee or agent of the Fund shall
have physical access to the Assets of the Fund held by the Custodian nor
shall the Custodian deliver any Assets of the Fund to an account of such
person; provided, however, that nothing in this Section 3.03 shall prohibit
(a) any Authorized Person from giving Proper Instructions, or any person
authorized to issue Special Instructions from issuing Special Instructions,
so long as such action does not result in delivery of or access to Assets of
the Fund prohibited by this Section 3.03; or (b) the Fund's independent
certified public accountants from examining or reviewing the Assets of the
Fund held by the Custodian. The Fund will deliver from time to time a written
certificate executed by two Authorized Persons identifying such Authorized
Persons, Directors, officers, employees and agents of the Fund.
Notwithstanding the foregoing, to the extent that the person acting on behalf
of the Custodian in making such delivery has actual knowledge that any person
is an Authorized Person, Director, officer, employee or agent of the Fund,
the Custodian will comply with this Section 3.03 as if the name of such
Authorized Person, Director, officer, employee or agent had been contained in
a written certificate provided pursuant to this Section 3.03.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts in
accordance with (a) Proper Instructions or Special Instructions, as the case
may be, and (b) the terms of this Agreement, the Custodian shall not be
responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to this
Agreement.
ARTICLE IV
SUBCUSTODIANS
From time to time, in accordance with the relevant provisions of
this Agreement, (i) the Custodian may appoint one or more Domestic
Subcustodians and Special Subcustodians (each, as hereinafter defined) to act
on behalf of the Fund; and (ii) any Domestic Subcustodian so appointed and
which has been designated as a Foreign Custody Manager (as such term is
defined in Rule 17f-5 of the 0000 Xxx) by the Custodian and approved by the
Fund's board ("Approved Foreign Custody Manager") may appoint a Foreign
Sub-Subcustodian or Interim Sub-Subcustodian (as each are hereinafter
defined) in accordance with this Article IV; provided that the Fund's board
also has approved the agreement between the Custodian and the Foreign Custody
Manager specifying the Foreign Custody Manager's duties ("Delegation
Agreement"). For purposes of this Agreement, all Domestic Subcustodians,
Special Subcustodians, Foreign Sub-Subcustodians and Interim
Sub-Subcustodians shall be referred to collectively as "Subcustodians".
Section 4.01. 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 requirements
of a custodian under Section 17(f) of the 1940 Act and the rules and
regulations thereunder, to act as agent for the Custodian on behalf of the
Fund as a subcustodian for purposes of holding cash, securities and other
Assets of the Fund and performing other functions of the Custodian within the
United States (a "Domestic Subcustodian"); provided, that, the Custodian
shall notify the Fund in writing of the identity and qualifications of any
proposed Domestic Subcustodian at least sixty (60) days prior to the desired
appointment of such Domestic Subcustodian, and the Fund will notify the
Custodian, in writing signed by two or more Authorized Persons, of approval
or disapproval of the appointment of the proposed Domestic Subcustodian; and
provided, further, that the Custodian may not appoint any such Domestic
Subcustodian without such prior written approval of the Fund by such
Authorized Persons. Each such duly approved Domestic Subcustodian and the
countries where, Foreign Sub-Subcustodians and the securities depositories
and clearing agencies through which they may hold securities and other Assets
of the Fund shall be as agreed upon by the parties hereto in writing, from
time to time in accordance with the provisions of Section 9.04 hereof (the
"Subcustodian List").
Section 4.02. Foreign Sub-Subcustodians and Interim Sub-Subcustodians.
(a) Foreign Sub-Subcustodians. A Domestic Subcustodian which is an
Approved Foreign Custody Manager, or the Domestic Subcustodian, may appoint
any (1)(a) "Qualified Foreign Bank" (as such term is defined in Rule 17f-5)
meeting the requirements of an "Eligible Foreign Custodian" (as such term is
defined in Rule 17f-5) or by SEC order exempt therefrom; (b) majority-owned
direct or indirect subsidiary of a "U.S. bank" (as such term is defined in
Rule 17f-5) or bank holding company meeting the requirements of an Eligible
Foreign Custodian or exempt by SEC order therefrom; or (c) any bank (as such
term is defined in Section 2(a)(5) of the 0000 Xxx) meeting the requirements
of a custodian under Section 17(f) of the 1940 Act and the rules and
regulations thereunder (each a "Foreign Sub-Subcustodian") or (2) any
"Securities Depository" (as such term is defined in Rule 17f-5) or
clearing agency meeting the requirements of an Eligible Foreign Custodian or
exempt by SEC order therefrom ("Securities Depositories and Clearing
Agencies"), provided that the Foreign Custody Manager's appointments of such
Eligible Foreign Custodians shall at all times be governed by the Delegation
Agreement, except that the Fund's investment adviser, Xxxxxxx & Xxxx
Investment Management Company, shall be responsible for the appointment of a
compulsory depository, as applicable.
(b) Interim Sub-Subcustodians. Notwithstanding the foregoing, in the
event that the Fund shall invest in a security or other Asset to be held in a
country in which the Foreign Custody Manager has not appointed an Eligible
Foreign Custodian, the Custodian shall, or shall cause the Domestic
Subcustodian to, promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian shall agree in
writing of the unavailability of an approved Foreign Sub-Subcustodian in such
country; and upon the receipt of Special Instructions, the Custodian shall,
or shall cause the Domestic Subcustodian to, appoint or approve any Person
(as hereinafter defined) designated by the Fund in such Special Instructions,
to hold such security or other Asset. (Any Person appointed or approved as a
sub-subcustodian pursuant to this Section 4.02(b) is hereinafter referred to
as an "Interim Sub-Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of the Fund, appoint one or more
banks, trust companies or other entities designated in such Special
Instructions to act as a subcustodian for the purpose of (i) effecting
third-party repurchase transactions with banks, brokers, dealers or other
entities, (ii) providing depository and clearing agency services with respect
to certain variable rate demand note securities; and (iii) effecting any
other transactions designated by the Fund in Special Instructions. (Each such
designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be listed
on the Subcustodian List. 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 Fund, provided
that such agreement shall in all events comply with the provisions of the
1940 Act and the rules and regulations thereunder and the terms and
provisions of this Agreement. The Custodian shall not amend any subcustodian
agreement entered into with a Special Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
except upon prior approval pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian to, and (ii) use its best efforts to cause
each Interim Sub-Subcustodian and Special Subcustodian to, perform all of its
obligations in accordance with the terms and conditions of the subcustodian
agreement between the Custodian and such Domestic Subcustodian and Special
Subcustodian or between the Domestic Subcustodian and an Interim
Sub-Subcustodian. In the event that the Custodian is unable to cause such
subcustodian or sub-subcustodian to fully perform its obligations thereunder,
the Custodian shall promptly notify the Fund in writing and forthwith, upon
the receipt of Special Instructions, terminate or cause the termination of
such Subcustodian or Sub-Subcustodian with respect to the Fund and, if
necessary or desirable, appoint or cause the appointment of a replacement
Subcustodian or Sub-Subcustodian in accordance
with the provisions of this Article IV. In addition to the foregoing, the
Custodian (A) may, at any time in its discretion, upon written notification
to the Fund, terminate any Domestic Subcustodian which is not an approved
Foreign Custody Manager, and (B) shall, upon receipt of Special Instructions,
terminate any Special Subcustodian or Domestic Subcustodian which is an
Approved Foreign Custody Manager with respect to the Fund, in accordance with
the termination provisions under the applicable subcustodian agreement, and
(C) shall, upon receipt of Special Instructions, cause the Domestic
Subcustodian to terminate any Foreign Sub-Subcustodian or Interim
Sub-Subcustodian as to its use of such entities with respect to the Fund, in
accordance with the termination provisions under the applicable
sub-subcustodian agreement.
Section 4.05. Certification Regarding Foreign Sub-Subcustodians.
Upon request of the Fund, the Custodian shall deliver, or cause any Domestic
Subcustodian that has been approved as a Foreign Custody Manager to deliver,
to the Fund a certificate stating: (i) the identity of each Foreign
Sub-Subcustodian then acting on behalf of the Custodian; (ii) the countries
in which and the Securities Depositories and Clearing Agents through which
each such Foreign Sub-Subcustodian is then holding cash, securities and other
Assets of the Fund; and (iii) such other information as may be requested by
the Fund to ensure compliance with rules and regulations under the 1940 Act.
Upon request of the Fund, the Custodian also shall deliver, or cause
any Domestic Subcustodian that has been approved as a Foreign Custody Manager
to deliver, to the Fund: (i) legal opinions relating to whether local law
restricts with respect to U.S.-registered mutual funds (a) access of a fund's
independent public accountants to books and records of a Foreign
Sub-Subcustodian, foreign Securities Depository or foreign Clearing Agent,
(b) a fund's ability to recover in the event of bankruptcy or insolvency of a
Foreign Sub-Subcustodian, foreign Securities Depository or foreign Clearing
Agent, (c) a fund's ability to recover in the event of a loss by a Foreign
Sub-Subcustodian, foreign Securities Depository or foreign Clearing Agent,
and (d) the ability of a foreign investor (such as a fund) to convert cash
and cash equivalents to U.S. dollars; (ii) a summary of information regarding
foreign Securities Depositories and foreign Clearing Agents; and (iii)
country profile information containing market practice for (a) delivery
versus payment, (b) settlement method, (c) currency restrictions, (d) buy-in
practices, (e) foreign ownership limits and (f) unique market arrangements.
ARTICLE V
STANDARD OF CARE: INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
reasonable care and diligence in carrying out all of its duties and
obligations under this Agreement, and shall be liable to the Fund for all
loss, damage and expense suffered or incurred by the Fund resulting from the
failure of the Custodian to exercise such reasonable care and diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any
Subcustodian or Securities System, or any subcustodian, Securities Depository
or Clearing Agency utilized by 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: (i) 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 the Custodian nor any other Person shall not be
obligated to take any action contrary thereto); (ii) any act of God or war or
other similar circumstance beyond the control of the Custodian unless in each
case, such delay or nonperformance is caused by the negligence, misfeasance
or misconduct of the Custodian; or (iii) any "Sovereign Risk", which for the
purpose of this Agreement shall mean nationalization, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure, or
enactment, promulgation, imposition or enforcement by any such governmental
authority of currency restrictions, exchange controls, taxes, levies or other
charges affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution, civil commotion, nuclear fission or fusion or
radioactivity.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund, (i) the
Custodian shall, (ii) the Custodian shall cause any applicable Domestic
Subcustodian or Foreign Sub-Subcustodian to, and (iii) the Custodian shall
use its best efforts to cause any applicable Interim Sub-Subcustodian or
Special Subcustodian to, use all commercially reasonable efforts and take all
reasonable steps under the circumstances to mitigate the effects of such
event and to avoid continuing harm to the Fund.
(d) Advice of Counsel. The Custodian shall be without liability for
any action reasonably taken or omitted in good faith pursuant to the written
advise of (i) counsel for the Fund, or (ii) at the expense of the Custodian,
such other counsel as the Fund and the Custodian may agree upon in writing;
provided, however, with respect to the performance of any action or omission
of any action upon such advice, the Custodian shall be required to conform to
the standard of care set forth in Section 5.01 (a).
(e) Expenses of the Fund. In addition to the liability of the
Custodian under this Article V, the Custodian shall be liable to the Fund for
all reasonable costs and expenses incurred by the Fund in connection with any
claim by the Fund against the Custodian arising from the obligations of the
Custodian hereunder including, without limitation, all reasonable attorneys'
fees and expenses incurred by the Fund in asserting any such claim, and all
expenses incurred by the Fund in connection with any investigations, lawsuits
or proceedings relating to such claim; provided however, that the Fund has
recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no
liability in respect of any loss, damage or expense suffered by the Fund,
insofar as such loss, damage or expense arises from the performance of the
Custodian in reliance upon records that were maintained for the Fund by
entities other than the Custodian prior to the Custodian's employment
hereunder which the Custodian has no reason to believe are inaccurate or
incomplete after reasonable inquiry.
Section 5.02. Liability of the Custodian for Actions of Other Persons.
(a) Domestic Subcustodian and Foreign Sub-Subcustodian. The
Custodian shall be liable for the actions or omissions of any Domestic
Subcustodian or Foreign Sub-Subcustodian (excluding any Securities Depository
or Clearing Agency appointed by them) to the same extent as if such actions
or omissions were performed by the Custodian itself. In the event of any
loss, damage or expense suffered or incurred by the Fund caused by or
resulting from the actions or omissions of any Domestic Subcustodian or
Foreign Sub-Subcustodian for which the Custodian would otherwise be liable,
the Custodian shall promptly reimburse the Fund in the amount of any such
loss, damage or expense.
(b) Special Subcustodians, Interim Sub-Subcustodians, Security
Systems, Securities Depositories and Clearing Agencies. The Custodian shall
not be liable to the Fund for any loss, damage or expense suffered or
incurred by the Fund resulting from the actions or omissions of a Special
Subcustodian, Interim Sub-Subcustodian, Securities System, Securities
Depository or Clearing Agency unless such loss, damage or expense is caused
by, or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, in the event of any such loss, damage or
expense, the Custodian shall take all reasonable steps to enforce such rights
as it may have against such Special Subcustodian, Interim Sub-Subcustodian,
Security System, Securities Depository or Clearing Agency to protect the
interest of the Fund.
(c) Reimbursement of Expenses. The Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the Custodian
in connection with the fulfillment of its obligations under Section 5.01(c)
as it relates to Interim Sub-Subcustodians and Special Subcustodians and
5.02(b); provided however, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
Section 5.03. Indemnification by Fund.
(a) Indemnification Obligations of Fund. Subject to the limitations
set forth in this Agreement, the Fund agrees to indemnify and hold harmless
the Custodian and its nominees from all loss, damage and expense (including
reasonable 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; provided, however, that such indemnity shall not apply to
loss, damage and expense occasioned by or resulting from the negligence,
misfeasance or misconduct of the Custodian or its nominee. In addition, the
Fund agrees to indemnify any Person against liability incurred by reason of
taxes assessed to such Person resulting from the fact that securities and
other property of the Fund are registered in the name of such Person in
accordance with the provisions of this Agreement; provided, however, that in
no event shall such indemnification be applicable to income, franchise or
similar taxes which may be imposed or assessed against any Person. It is also
understood that the Fund agrees to indemnify and
hold harmless the Custodian and its nominee for any loss arising from a
foreign currency transaction or contract, where the loss results from a
Sovereign Risk (defined in Section 5.01(b)) or where any Person maintaining
securities, currencies, deposits or other Assets of the Fund in connection
with any such transactions has exercised reasonable care maintaining such
property or in connection with any such transaction involving such Assets. A
"Sovereign Risk" shall mean nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar
action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or acts of war, terrorism, insurrection or
revolution.
(b) Notice of Litigation. Right to Prosecute, Etc. The Fund shall
not be liable for indemnification under this Section 5.03 unless a Person
shall have promptly notified the Fund in writing of the commencement of any
litigation or proceeding brought against the Custodian or other Person in
respect of which indemnity may be sought under this Section 5.03. With
respect to claims in such litigation or proceedings for which indemnity by
the Fund may be sought and subject to applicable law and the ruling of any
court of competent jurisdiction, the Fund shall be entitled to participate in
any such litigation or proceeding with counsel of its choice at its own
expense in respect of that portion of the litigation for which the Fund may
be subject to an indemnification obligation; provided, however, a Person
shall be entitled to participate in (but not control) at its own cost and
expense, the defense of any such litigation or proceeding if the Fund has not
acknowledged in writing it obligation to indemnify the Person with respect to
such litigation or proceeding. If the Fund is not permitted to participate or
control such litigation or proceeding under applicable law or by a ruling of
a court of competent jurisdiction, or if the Fund chooses not to so
participate, the Custodian or other Person shall not consent to the entry of
any judgment or enter into any settlement in any such litigation or
proceeding without providing the Fund with adequate notice of any such
settlement or judgment, and without the Fund's prior written consent which
consent shall not be unreasonably withheld or delayed. All Persons shall
submit written evidence to the Fund with respect to any cost or expense for
which they are seeking indemnification in such form and detail as the Fund
may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duty generally, and more particularly in connection with the purchase, sale
or exchange of securities made by or for the Fund, the Custodian shall not be
liable to the Fund and the Fund agrees to indemnify the Custodian and its
nominees, for any loss, damage or expense suffered or incurred by the
Custodian and its nominees arising out of any violation of any investment or
other limitation to which the Fund is subject except for violations of which
the Custodian has actual knowledge. For purposes of this Section 5.04 the
term "actual knowledge" shall mean knowledge gained by the Custodian by means
other than from any prospectus published by the Fund or contained in any
filing by the Fund with the SEC.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to
the contrary contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System or other Person for loss,
damage or expense caused the Fund by such Subcustodian, Securities System or
other Person, which the Custodian may have as a consequence of any such loss,
damage or expense, if and to the extent that the Fund has not been made whole
for any such loss, expense or damage. If the Custodian makes the Fund whole
for any such loss, expense or damage, the Custodian shall retain the ability
to enforce its rights directly against such Subcustodian, Securities System
or other Person. Upon the Fund's election to enforce any rights of the
Custodian under this Section 5.05, the Fund shall reasonably prosecute all
actions and proceedings directly relating to the rights of the Custodian in
respect of the loss, damage or expense incurred by the Fund; provided that,
so long as the Fund has acknowledged in writing its obligation to indemnify
the Custodian under Section 5.03 hereof with respect to such claim, the Fund
shall retain the right to settle, compromise and/or terminate any action or
proceeding in respect of the loss, damage or expense incurred by the Fund
without the Custodian's consent and provided further, that if the Fund has
not made an acknowledgement of its obligation to indemnify, the Fund shall
not settle, compromise or terminate any such action or proceeding without the
written consent of the Custodian, which consent shall not be unreasonably
withheld or delayed. The Custodian agrees to cooperate with the Fund and take
all actions reasonably requested by the Fund in connection with the Fund's
enforcement of any rights of the Custodian. Nothing contained in this Section
5.05 shall be construed as an obligation of the Fund to enforce the
Custodian's rights. The Fund agrees to reimburse the Custodian for
out-of-pocket expenses incurred by it in connection with the fulfillment of
its obligations under this Section 5.05; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from the
negligence, misfeasance or misconduct of the Custodian.
Section 5.06. Indemnification by Custodian.
(a) Indemnification Obligations of Custodian. Subject to the
limitations set forth in this Agreement and in addition to the reimbursement
obligations provided in Section 5.02(a), the Custodian agrees to indemnify
and hold harmless the Fund and its nominees from all loss, damage and expense
(including reasonable attorneys' fees) suffered or incurred by the Fund or
its nominee caused by or arising from the failure of the Custodian, its
nominee, employees or agents to comply with the terms or conditions of this
Agreement or arising out of the negligence, misfeasance or misconduct of the
Custodian or its nominee.
(b) Notice of Litigation, Right to Prosecute, Etc. The Custodian
shall not be liable for indemnification under this Section 5.06 unless the
Fund shall have promptly notified the Custodian in writing of the
commencement of any litigation or proceeding brought against the Fund in
respect of which indemnity may be sought under this Section 5.06. With
respect to claims in such litigation or proceedings for which indemnity by
the Custodian may be sought and subject to applicable law and the ruling of
any court of competent jurisdiction, the Custodian shall be entitled to
participate in any such litigation or proceeding with counsel of its choice
at its own expense in respect of that portion of the litigation for which the
Custodian may be subject to an indemnification obligation; provided, however,
the Fund shall be entitled to participate in (but not control) at its own
cost and expense, the defense of any such litigation or proceeding
if the Custodian has not acknowledged in writing its obligation to indemnify
the Fund with respect to such litigation or proceeding. If the Custodian is
not permitted to participate or control such litigation or proceeding under
applicable law or by a ruling of a court of competent jurisdiction, or if the
Custodian chooses not to so participate, the Fund shall not consent to the
entry of any judgement or enter into any settlement in any such litigation or
proceeding without providing the Custodian with adequate notice of any such
settlement or judgement, and without the Custodian's prior written consent
which consent shall not be unreasonably withheld or delayed. The Fund shall
submit written evidence to the Custodian with respect to any cost or expense
for which it is seeking indemnification in such form and detail as the
Custodian may reasonably request.
Section 5.07. Custodian's Right to Proceed. Notwithstanding anything
to the contrary contained herein, the Custodian shall have, at its election
upon reasonable notice to the Fund, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Fund's rights
against any Subcustodian, Securities System or other Person for loss, damage
or expense caused the Custodian by such Subcustodian, Securities System or
other Person, which the Fund may have as a consequence of any such loss,
damage or expense, if and to the extent that the Custodian has not been made
whole for any such loss, expense or damage. If the Fund makes the Custodian
whole for any such loss, expense or damage, the Fund shall retain the ability
to enforce its rights directly against such Subcustodian, Securities System
or other Person. Upon the Custodian's election to enforce any rights of the
Fund under this Section 5.07, the Custodian shall reasonably prosecute all
actions and proceedings directly relating to the rights of the Fund in
respect of the loss, damage and expense incurred by the Custodian; provided
that, so long as the Custodian has acknowledged in writing its obligation to
indemnify the Fund under Section 5.06 hereof with respect to such claim, the
Custodian shall retain the right to settle, compromise and/or terminate any
action or proceeding in respect of the loss, damage or expense incurred by
the Custodian without the Fund's consent and provided further, that if the
Custodian has not made an acknowledgement of its obligation to indemnify, the
Custodian shall not settle, compromise or terminate any such action or
proceeding without the written consent of the Fund, which consent shall not
be unreasonably withheld or delayed. The Fund agrees to cooperate with the
Custodian and take all actions reasonably requested by the Custodian in
connection with the Custodian's enforcement of any rights of the Fund.
Nothing contained in this Section 5.07 shall be construed as an obligation of
the Custodian to enforce the Fund's rights. The Custodian agrees to reimburse
the Fund for out-of-pocket expenses incurred by it in connection with the
fulfillment of its obligations under this Section 5.07; provided, however,
that such reimbursement shall not apply to expenses occasioned by or
resulting from the negligence, misfeasance or misconduct of the Fund.
ARTICLE VI
COMPENSATION
For the initial three year period beginning on the effective date of
this Agreement, the Fund shall compensate the Custodian in the amount and at
the times specified in Appendix "A" attached hereto. Thereafter, the Fund
shall compensate the Custodian in the amount, and at times, as may be agreed
upon in writing, from time to time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
This Agreement shall continue in full force and effect until the
first to occur of: (a) termination by the Custodian by an instrument in
writing delivered or mailed (certified mail, return receipt requested) to the
Fund, such termination to take effect not sooner than ninety (90) days after
the date of such delivery or receipt; (b) termination by the Fund by an
instrument in writing delivered or mailed (certified mail, return receipt
requested) to the Custodian, such termination to take effect not sooner than
ninety (90) days after the date of such delivery or receipt; or (c)
termination by the Fund by an instrument in writing delivered to the
Custodian, based upon the Fund's determination that there is reasonable basis
to conclude that the Custodian is insolvent or that the financial condition
of the Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such notice or
at such later time as the Fund shall designate. In the event of termination
pursuant to this Article VII, the Fund shall make payment of all accrued fees
and unreimbursed expenses within a reasonable time following termination and
delivery of a statement to the Fund setting forth such fees and expenses. The
Fund shall identify in any notice of termination a successor custodian to
which the cash, securities and other Assets of the Fund shall, upon
termination of this Agreement, be delivered. In the event that securities and
other Assets remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to appoint a successor
custodian, the Custodian shall be entitled to compensation for its services
in accordance with the fee schedule most recently in effect, for such period
as the Custodian retains possession of such securities and other Assets, and
the provisions of this Agreement relating to the duties and obligations of
the Custodian and the Fund shall remain in full force and effect for such
period. In the event of the appointment of a successor custodian, the cash,
securities and other Assets owned by the Fund and held by the Custodian, any
Subcustodian or nominee shall be delivered, at the terminating party's
expense, to the successor custodian; and the Custodian agrees to cooperate
with the Fund in the execution of documents and performance of other actions
necessary or desirable in order to substitute the successor custodian for the
Custodian under this Agreement.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22(A)
ADRs 2.06
Approved Foreign Custody Manager Article IV
Assets Article I
Authorized Person 3.02
Banking Institution 2.12
Bank Accounts 2.21
Delegation Agreement Article IV
Distribution Account 2.16
Domestic Subcustodian 4.01
Eligible Foreign Custodian 4.02(a)
Foreign Sub-Subcustodian 4.02(a)
Institutional Client 2.03
Interest Bearing Deposit 2.12
Interim Sub-Subcustodian 4.02(b)
OCC 2.09
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities Depositories and Clearing Agencies 4.02(a)
Securities System 2.22
Shares 2.16
Sovereign Risk 5.01(b)
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by the Fund. Upon request, the Fund shall execute and
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,
provided that the exercise by the Custodian or any Subcustodian of any such
rights shall in all events be in compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable in
order to effectuate any of the transactions contemplated hereby and
designated therein.
Section 9.02. Representations and Warranties.
(a) Representations and Warranties of the Fund. The Fund hereby
represents and warrants that each of the following shall be true, correct and
complete as of the date of execution of this Agreement and, unless notice to
the contrary is provided by the Fund to the Custodian, at all times during
the term of this Agreement: (i) the Fund is duly organized under the laws of
its jurisdiction of organization and is registered as an open-end management
investment company under the 1940 Act or is a series of portfolio of such
entity; and (ii) the execution, delivery and performance by the Fund of this
Agreement are (w) within its power, (x) have been duly authorized by all
necessary action, and (y) will not (A) contribute to or result in a breach of
or default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or
authority, or (B) violate any provision of the Fund's corporate charter or
other organizational document, or bylaws, or any amendment thereof or any
provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants that each of the following shall be true,
correct and complete as of the date of execution of this Agreement and,
unless notice to the contrary is provided by the Custodian to the Fund, at
all times during the term of this Agreement: (i) the Custodian is duly
organized under the laws of its jurisdiction of organization and qualifies to
serve as a custodian to open-end management investment companies under the
provisions of the 1940 Act; and (ii) the execution, delivery and performance
by the Custodian of this Agreement are (w) within its power (x) have been
duly authorized by all necessary action, and (y) will not (A) contribute to
or result in a breach of or default under or conflict with any existing law,
order, regulation or ruling of any governmental or regulatory agency or
authority, or (B) violate any provision of the Custodian's corporate charter,
or other organizational document, or bylaws, or any amendment thereof. The
Custodian acknowledges receipt of a copy of the Fund's most recent Prospectus
and Statement of Additional Information.
Section 9.03. Entire Agreement. 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.
Section 9.04. Waivers and Amendments. No provisions of this
Agreement may be waived, amended or deleted except by a statement in writing
signed by the party against which enforcement of such waiver, amendment or
deletion is sought.
Section 9.05. Interpretation. In connection with the operation of
this Agreement, the Custodian and the Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions of
this Agreement as may in their joint opinion be consistent with the general
tenor of this Agreement. No interpretative or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
Section 9.06. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Missouri, in each
case without giving effect to principles of conflicts of law.
Section 9.08. Notices. Except in the case of Proper Instructions or
Special Instructions, and as otherwise provided in this Agreement, notices
and other writings contemplated by this Agreement shall be delivered by hand
or by facsimile transmission or as otherwise agreed to by the Fund and the
Custodian in writing (provided that in the case of delivery by facsimile
transmission, notice shall also be mailed postage prepaid) to the parties at
the following addresses:
(a) If to the Fund:
United High Income Fund, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Fund Treasurer
Telephone: 000-000-0000
Telefax: 913-236-1595
(b) If to the Custodian:
UMB Bank, n.a.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Securities Administration
Telephone: 000-000-0000
Telefax: 000-000-0000
or such other address as either party may have designated in writing to the
other party hereto.
Section 9.09. Assignment. This Agreement shall be binding on and
shall inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that, subject to the provisions of Section
7.01 hereof, neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the
other party.
Section 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original. This
Agreement shall become effective when one or more counterparts have been
signed and delivered by each of the parties.
Section 9.11. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions of
this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information provided
by a party hereto shall be used by any other party hereto solely for the
purpose of rendering services pursuant to this Agreement and, except as may
be required in carrying out this Agreement, shall not be disclosed to any
third party without the prior consent of such providing party. The foregoing
shall not be applicable to any information that is publicly available when
provided or thereafter becomes publicly available other than through a breach
of this Agreement, or that is required to be disclosed by any bank examiner
of the Custodian or any Subcustodians, any auditor or examiner of the parties
hereto, by judicial or administrative process or otherwise by applicable law
or regulation. The provisions of this Section 9.11 and Section 9.01, 9.07,
Section 2.28,
Section 3.04, Section 4.05, Section 7.01, Article V and Article VI hereof and
any other rights or obligations incurred or accrued by any party hereto prior
to termination of this Agreement shall survive any termination of this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above written.
UNITED HIGH INCOME FUND, INC. UMB BANK, n.a.
By:/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
Name: Xxxxxxx X. Xxxxxxxx -----------------
Name: Xxxxx Xxxxxxx
Title: Vice President Title: Senior Vice President
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
UNITED HIGH INCOME FUND, INC.
AND
UMB BANK, N.A.
Dated as of May 13, 1998
The Fund shall be responsible for providing the Custodian the net
asset levels the Custodian requires to calculate the net asset portion of the
Custodian's fees. Such determinations shall be based upon the average monthly
assets of each Fund and shall specify the level of domestic assets and
foreign assets by country, as appropriate. Domestic assets shall include all
assets held in the United States including but not limited to American
Depositary Receipts. Foreign assets shall include all assets held outside the
United States including but not limited to securities which clear through
Euroclear or CEDEL. The Custodian will provide as soon as practicable after
receiving the information provided by the Fund with respect to the net asset
level numbers, a xxxx for the Fund, including such reasonable detail in
support of each xxxx as may be reasonably requested by the Fund. As used in
this Appendix "A", "United Funds" shall mean all funds in the United Group of
Funds, TMK/United Funds, Inc. and Xxxxxxx & Xxxx Funds, Inc.
DOMESTIC CUSTODY FEE SCHEDULE
A. ANNUAL FEE (COMBINING ALL DOMESTIC ASSETS):
An annual fee to be computed as of month end and payable each month
of the Fund's fiscal year (after receipt of the xxxx issued to each
Fund based upon its portion of domestic assets), at the annual rate of:
.00005 for the first $5,000,000,000 of the net assets of all the
United Funds, plus .00004 for any net assets exceeding
$5,000,000,000 of the assets of all the United Funds.
B. PORTFOLIO TRANSACTION FEES (BILLED TO EACH FUND):
(a) For each portfolio transaction* processed through a
Depository (DTC, PTC or Fed) $ 7.00
(b) For each portfolio transaction* processed through
the New York office (physical settlement) $20.00
(c) For each futures/option contract written $25.00
(d) For each principal/interest paydown $ 6.00
(e) For each interfund note transaction $ 5.00
* A portfolio transaction includes a receive, delivery, maturity,
free security movement and corporate action.
C. EARNINGS CREDITS:
Positive earnings credits will be applied on all collected custody
and cash management balances of each Fund at the Custodian to earn
the Custodian's daily repurchase agreement rate less reserve
requirements and FDIC premiums. Negative earnings credits will be
charged on all uncollected custody and cash management balances of
each Fund at the Custodian's prime rate less 150 basis points on
each day a negative balance occurs. Positive and/or negative
earnings credits will be monitored daily for each Fund and the net
positive or negative amount for each Fund will be included in the
monthly statements. Excess positive credits for each Fund will be
carried forward indefinitely.
D. OUT-OF-POCKET EXPENSES (PASSED DIRECTLY FROM SPECIAL SUBCUSTODIANS):
Includes all charges by any Special Subcustodian to the Custodian as
Custodian for any Assets held at the Special Subcustodian.
GLOBAL CUSTODY FEE SCHEDULE
A. GLOBAL FEE SCHEDULE:
Market: Annual Asset Fees Transaction Fees
------ ----------------- ----------------
Argentina .0037 $85
Australia .0009 $85
Austria .0011 $70
Xxxxxxx .0000 $60
Brazil .0035 $60
Canada .0008 $35
Chile .0045 $85
China .0045 $75
Czech Republic .0055 $135
Denmark .0011 $60
Finland .0011 $85
France .0011 $85
Germany .0008 $60
Hong Kong .0009 $85
Hungary .0065 $210
India .0055 $135
Indonesia .0009 $85
Xxxxxxx .0000 $60
Israel .0035 $160
Italy .0011 $70
Japan .0008 $40
Korea .0035 $60
Malaysia .0009 $85
Mexico .0016 $60
Netherlands .0011 $35
New Zealand .0009 $85
Xxxxxx .0000 x00
Xxxx .0070 $160
Phillippines .0035 $95
Poland .0060 $110
Portugal .0035 $145
Singapore .0009 $85
Spain .0009 $85
Sweden .0011 $70
Xxxxxxxxxxx .0000 $85
Taiwan .0035 $85
Thailand .0009 $85
Turkey .0045 $110
U.K. .0011 $60
Segregated Account Fee: $175 monthly charge per fund holding
foreign assets.
Note: Fee Schedule eliminates sub-custodian asset and transaction-based
out-of-pocket expenses. Other sub-custodian out-of-pocket expenses
(i.e. Scrip fees, stamp duties, certificate fees, etc.)
B. OUT-OF-POCKET EXPENSES (PASSED DIRECTLY FROM XXXXX BROTHERS
XXXXXXXX & CO.):
Includes, but is not limited to telex, legal, telephones, postage,
and direct expenses including but not limited to tax reclaim,
customized systems programming, certificate fees, duties, and
registration fees.
C. SHORT-TERM DOLLAR DENOMINATED GLOBAL ASSETS
EURODOLLAR CDS, TIME DEPOSITS:
(1) An annual fee to be computed as of month end and payable
each month of the Fund's fiscal year (after receipt of the
xxxx issued to the Fund based upon its portion of
short-term dollar denominated assets), at the annual rate
of:
.0004 on all short-term dollar denominated assets of the
United Funds.
(2) Portfolio Transaction Fees:
First Chicago Clearing Centre-Trades with Members $136.00
First Chicago Clearing Centre-Trades with Non-members $153.00
First Chicago Clearing Centre-Income Collection $ 64.00
D. EUROCLEAR ELIGIBLE ISSUES:
(1) An annual fee to be computed as of month end and payable
each month of the Fund's fiscal year (after receipt of the
xxxx issued to the Fund based upon its portion of Euroclear
issues), at the annual rate of:
2.5 basis points on all United Funds Euroclear assets held in
account at UMB Bank, n.a.
(2) Portfolio Transaction Fees:
Euroclear $60.00
SUBCUSTODIAN LIST
PURSUANT TO CUSTODIAN AGREEMENT
BETWEEN
UNITED HIGH INCOME FUND, INC.
AND
UMB BANK, n.a.
Dated as of February 25, 2000
This Subcustodian List relates to the Custodian Agreements between UMB
Bank, n.a. and each of the following funds dated the date specified by the
fund's name, as subsequently amended and restated:
FUND DATE
---- ----
United Asset Strategy Fund, Inc. February 22, 1995
United Cash Management, Inc. November 26, 1991
United Continental Income Fund, Inc. November 26, 1991
United Gold & Government Fund, Inc. November 26, 1991
United Government Securities Fund, Inc. November 26, 1991
United High Income Fund, Inc. November 26, 1991
United High Income Fund II, Inc. November 26, 1991
United International Growth Fund, Inc. November 26, 1991
United Municipal Bond Fund, Inc. November 26, 1991
United Municipal High Income Fund, Inc. November 26, 1991
United New Concepts Fund, Inc. November 26, 1991
United Retirement Shares, Inc. November 26, 1991
United Vanguard Fund, Inc. November 26, 1991
United Funds, Inc.
United Bond Fund November 26, 1991
United Income Fund November 26, 1991
United Accumulative Fund November 26, 1991
United Science and Technology Fund November 26, 1991
United Small Cap Fund, Inc. August 18, 1999
United Tax-Managed Equity Fund, Inc. February 25, 2000
Target/United Funds, Inc.*
High Income Portfolio November 26, 1991
Money Market Portfolio November 26, 1991
Bond Portfolio November 26, 1991
Income Portfolio November 26, 1991
Growth Portfolio November 26, 1991
Balanced Portfolio April 29, 1994
International Portfolio April 29, 1994
Limited-Term Bond Portfolio April 29, 1994
Small Cap Portfolio April 29, 1994
Asset Strategy Portfolio May 1, 1995
Science and Technology Portfolio April 4, 1997
Xxxxxxx & Xxxx Funds, Inc.
Total Return Fund April 24, 1992
Municipal Bond Fund April 24, 1992
Limited-Term Bond Fund April 24, 1992
International Growth Fund April 24, 1992
Growth Fund April 24, 1992
Asset Strategy Fund April 20, 1995
High Income Fund July 31, 1997
Science and Technology Fund July 31, 1997
*Formerly, TMK/United Funds, Inc.
The following is a list of Domestic Subcustodians, Foreign Subcustodian and
Special Subcustodians under the Custodian Agreement as amended:
A. DOMESTIC CUSTODIANS:
Xxxxx Brothers Xxxxxxxx & Co.
United Missouri Trust Company of New York
B. FOREIGN SUB-CUSTODIANS
Country Sub-Custodian Depository
Argentina Citibank, n.a. CDV; CRYL
Australia National Australia Bank Ltd. AUSTRACLEAR, RITs
Austria Creditanstalt Bankverein KONTROLLBANK (OEKB)
Belgium Banque Bruxelles Xxxxxxx CIK, BNB
Brazil First National Bank of Boston, Brazil BOVESPA, CLC
Canada Canadian Imperial Bank of Commerce CDS; The Bank of Canada
Chile Citibank, n.a. None
China Standard Chartered Bank SSCCRC; SSCC
Czech Republic Ceskoslovenska Obchodni Banka A.S. CNB; SCP
Denmark Den Danske Bank VP
Finland Xxxxxx Securities Association;
Finnish Central Securities Depository Ltd.
France Banque Indosuez SICOVAM; Banque de France
Germany Deutsche Bank KASSENVEREIN
Hungary Citibank, N.A. KELER Ltd.
Hong Kong HongKong & Shanghai Banking Corp. HongKong Securities Clearing Company
India Citibank, N.A., Mumbai National Securities Depository Limited
Indonesia Citibank, n.a. None
Ireland Allied Irish Banks PLC Gilt Settlement Office
Israel Bank Hapoalim X.X. XXXX Clearinghouse Ltd.
Italy Banca Commerciale Italiana MONTE TITOLI, Banca D'Italia
Japan The Bank of Tokyo, Ltd. JASDEC, Bank of Japan
Korea Citibank, n.a. Korean Securities Depository Corporation (KSD)
Malaysia Hong Kong Bank Malaysia Berhad MCD; Bank Negara Malaysia
Mexico Citibank Mexico, s.a. INDEVAL; Banco De Mexico
Netherlands ABN - Amro Bank NECIGER; De Nederlandsche Bank
Norway Christiana Bank VPS
Peru Citibank, n.a. Caja De Valores (CAVAL)
Philippines Citibank, n.a. Phillipines Central Depository, Inc.
Poland Bank Polska Kasa Opieki S.A. NPB
Portugal Banco Espirito Santo E Comercial De Lisboa Interbolsa
Singapore HongKong & Shanghai Banking Corp. CDP
Spain Banco Santander SCLV; Banco De Espana
Sweden Skandinaviska Enskilda Banken VPC
Switzerland Union Bank of Switzerland SEGA
Taiwan Standard Chartered Bank, Taipei TSCD
Thailand HongKong & Shanghai Banking Corp. Share Depository Center (SDC)
Turkey Citibank, n.a. TvS, Central Bank of Turkey
United Kingdom Midland Securities PLC CMO; CGO; CrestCo
C. SPECIAL SUBCUSTODIANS:
Republic National Bank of New York
The Bank of New York, n.a.
