Exhibit (j)(4)
AMENDMENT TO THE CUSTODIAN CONTRACT
AGREEMENT made by and between State Street Bank and Trust Company
(the "Custodian") and Royce Value Trust, Inc. (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian
contract dated October 20, 1986 (the "Custodian Contract") governing the terms
and conditions under which the Custodian maintains custody of the securities
and other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the Custodian
Contract to provide for the maintenance of the Fund's foreign securities, and
cash incidental to transactions in such securities, in the custody of certain
foreign banking institutions and foreign securities depositories acting as
sub-custodians in conformity with the requirements of Rule 17f-5 under the
Investment Company Act of 1940;
NOW THEREFORE, in consideration of the premises and covenants
contained herein, the Custodian and the Fund hereby amend the Custodian
Contract by the addition of the following terms and conditions;
1. Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained outside
the United States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions", as defined in Section 2.15 of the Custodian
Contract, together with a certified resolution of the Fund's Board of
Directors, the Custodian and the Fund may agree to amend Schedule A hereto
from time to time to designate additional foreign banking institutions and
foreign securities depositories to act as sub-custodian. Upon receipt of
Proper Instructions, the Fund may instruct the Custodian to (and the Custodian
shall) cease the employment of any one or more of such sub-custodians for
maintaining custody of the Fund's assets.
2. Assets to be Held
The Custodian shall limit the securities and other assets maintained
in the custody of the foreign sub-custodians to: (a) "foreign securities", as
defined in paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of
1940, and (b) cash and cash equivalents in such amounts as the Custodian or
the Fund may determine to be reasonably necessary to effect the Fund's foreign
securities transactions.
3. Foreign Securities Depositories
Except as may otherwise be agreed upon in writing by the Custodian
and the Fund, assets of the Fund shall be maintained in foreign securities
depositories only through arrangements implemented by the foreign banking
institutions serving as sub-custodians pursuant to the terms hereof. Where
possible, such arrangements shall include entry into agreements containing the
provisions set forth in Section 5 hereof.
4. Segregation of Securities
The Custodian shall identify on its books as belonging to the Fund,
the foreign securities of the Fund held by each foreign sub-custodian. Each
agreement pursuant to which the Custodian employs a foreign banking
institution shall require that such institution establish a separate custody
account for the Custodian on behalf of the Fund and physically segregate in
that account, securities and other assets of the Fund, and, in the event that
such institution deposits the Fund's securities in a foreign securities
depository, that it shall identify on its books as belonging to the Custodian,
as agent for the Fund, the securities so deposited.
5. Agreements with Foreign Banking Institutions
Each agreement with a foreign banking institution shall be
substantially in the form set forth in Exhibit 1 hereto and shall provide
that: (a) the Fund's assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking
institution or its creditors or agents, except a claim of payment for their
safe custody or administration; (b) beneficial ownership for the Fund's assets
will be freely transferable without the payment of money or value other than
for custody or administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) officers of or auditors
employed by, or other representatives of the Custodian, including to the
extent permitted under applicable law the independent public accountants for
the Fund, will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Custodian;
and (e) assets of the Fund held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
6. Access of Independent Accountants of the Fund
Upon request of the Fund, the Custodian will use its best efforts to
arrange for the independent accountants of the Fund to be afforded access to
the books and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance of
such foreign banking institution under its agreement with the Custodian.
7. Reports by Custodian
The Custodian will supply to the Fund from time to time, as mutually
agreed upon but not less frequently than [quarterly], statements in respect of
the securities and other assets of the Fund held by foreign sub-custodians,
including but not limited to an identification of entities having possession
of the Fund's securities and other assets and advices or notifications of any
transfers of securities to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf of the Fund
indicating, as to securities acquired for the Fund, the identity of the entity
having physical possession of such securities.
8. Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 8,
the provisions of Sections 2.2 and 2.7 of the Custodian Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
2
(b) Notwithstanding any provision of the Custodian Contract to the
contrary, settlement and payment for foreign securities received for the
account of the Fund and delivery of securities maintained for the account of
the Fund may be effected by the Custodian outside of the United States or the
foreign sub-custodian in accordance with the customary established securities
trading or securities processing practices and procedures in the foreign
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of the Custodian Contract, and the Fund agrees to
hold any such nominee harmless from any liability as a holder of record of
such securities.
9. Liability of Foreign Sub-Custodians
Each agreement pursuant to which the Custodian employs a foreign
banking institution as a foreign sub-custodian shall require the institution
to exercise reasonable care in the performance of its duties and to indemnify,
and hold harmless, the Custodian and the Fund from and against any loss,
damage, cost, expense, liability or claim arising out of or in connection with
the institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claims against a foreign banking institution as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
10. Liability of Custodian
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in the Custodian Contract and, regardless of whether
assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank as contemplated by
paragraph 13 hereof, the Custodian shall not be liable for any loss, damage,
cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism or any loss
where the sub-custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this paragraph 10, in delegating
custody duties to State Street London Ltd. or to any other affiliate of the
Custodian, the Custodian shall not be relieved of any responsibility to the
Fund for any loss, damage, cost, expense, liability or claim due to such
delegation, except such loss, damage, cost, expense, liability or claim as may
result from (a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd. or any such
other affiliate not caused by political risk) due to Acts of God, nuclear
incident or other losses under circumstances where the Custodian and State
Street London Ltd. or any such other affiliate have exercised reasonable care.
3
11. Reimbursement for Advances
If the Fund requires the Custodian to advance cash or securities for
any purpose including the purchase or sale of foreign exchange or of contracts
for foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except such
as may arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any property at any time held for the account of
the Fund shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available cash
and to dispose of the Fund assets to the extent necessary to obtain
reimbursement.
12. Monitoring Responsibilities
The Custodian shall furnish annually to the Fund, during the month
of June, information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of this
amendment to the Custodian Contract. In addition, the Custodian will promptly
inform the Fund in the event that the Custodian learns of a material adverse
change in the financial condition of a foreign sub-custodian or any loss of
the assets of the Fund or in the case of any foreign sub-custodian not the
subject of an exemptive order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200 million (U.S.
dollars or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).
13. Branches of U.S. Banks
(a) Except as otherwise set forth in this amendment to the Custodian
Contract, the provisions hereof shall not apply where the custody of the Fund
assets is maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of 1940
meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by
paragraph 1 of the Custodian Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained
in an interest bearing account established for the Fund with the Custodian's
London Branch, which account shall be subject to the direction of the
Custodian, State Street London Ltd. or both.
14. Applicability of Custodian Contract
Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force
and effect.
4
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of the 2nd day of April, 1992.
ATTEST ROYCE VALUE TRUST, INC.
_________________________ By _________________________
(Title) (Title)
ATTEST STATE STREET BANK AND TRUST COMPANY
__________________________ By _________________________
Assistant Secretary Vice President
5
Schedule A
----------
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Royce Value
Trust, Inc. for use as sub-custodians for the Fund's securities and other
assets.
(insert banks and securities depositories)
State Street London Limited
Certified:
--------------------
Fund's Authorized Officer
Dated: ______________
6
EXHIBIT I
---------
CUSTODIAN AGREEMENT
-------------------
TO:
Gentlemen:
The undersigned ("State Street") hereby requests that you ( the
"Bank") establish a custody account and a cash account for each State Street
client whose account is identified to this Agreement. Each such custody or
cash account as applicable will be referred to herein as the "Account" and
will be subject to the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall
physically segregate in the Account such cash, bullion, coin, stocks, shares,
bonds, debentures, notes and other securities and other property which is
delivered to the Bank for that State Street Account (the "Property").
2. (a) Without the prior approval of State Street it will not
deposit securities in any securities depository or utilize a clearing agency,
incorporated or organized under the laws of a country other than the United
States, unless such depository or clearing house operates the central system
for handling of securities or equivalent book-entries in that country or
operates a transnational system for the central handling of securities or
equivalent book-entries.
(b) When Securities held for an Account are deposited in a
securities depository or clearing agency by the Bank, the Bank shall identify
on its books as belonging to State Street as agent for such Account, the
Securities so deposited.
The Bank represents that either:
3. (a) currently has stockholders' equity in excess of $200 million
(US dollars or the equivalent of US dollars computed in accordance with
generally accepted US accounting principles) and will promptly inform State
Street in the event that there appears to be a substantial likelihood that its
stockholders' equity will decline below $200 million, or in any xxxxx, at such
time as its stockholders' equity in fact declines below $200 million; or
(b) It is the subject of an exemptive order issued by the United
States Securities and Exchange Commission, which such order permits State
Street to employ the Bank as a subcustodian, notwithstanding the fact that the
Bank's stockholders' equity is currently below $200 million or may in the
future decline below $200 million due to currency fluctuation.
4. Upon the written instructions of State Street as permitted by
Section 8 , the Bank is authorised to pay out cash from the Account and to
sell, assign,. transfer, deliver or exchange, or to purchase for the Account,
any and all stocks, shares, bonds, debentures, notes and other securities
("Securities"), bullion, coin and other property, but only as provided in such
written instructions. The Bank shall not be held liable. for any act or
omission to act on instructions given or purported to be given should there be
any error in such instructions.
5. Unless the Bank receives written instructions of State Street to
the contrary, the Bank is authorized:
a. To promptly receive and collect all income and principal with
respect to the Property and to credit cash receipts to the Account;
b. To promptly exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary Securities for those in definitive form and the exchange
of warrants, or other documents of entitlement to Securities, for
the Securities themselves);
c. To promptly surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
d. Whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock
split is received for the Account and such rights entitlement or
fractional interest bears an expiration date, the Bank will endeavor
to obtain State Street's instructions, but should these not be
received in time for the Bank to take timely action, the Bank is
authorized to sell such rights entitlement or fractional interest
and to credit the Account;
e. To hold registered in the name of the nominee of the Bank or its
agents such Securities as are ordinarily held in registered form;
f. To execute in State Street's name for the Account, whenever the Bank
deems ii appropriate, such ownership and other certificates as may
be required to obtain the payment of income from the Property; and
g. To pay or cause to be paid from the Account any and all taxes and
levies in the nature of taxes imposed on such assets by any
governmental authority, and shall use reasonable efforts to promptly
reclaim any foreign withholding tax relating to the Account.
6. If the Bank shall receive any proxies, notices, reports, or other
communications relative to any of the Securities of the Account in connection
with tender offers, reorganizations, mergers, consolidations, or similar
events which may have an impact upon the issuer thereof, the Bank shall
promptly transmit any such communication to State Street by means as will
permit State Street to take timely action with respect thereto.
7. The Bank is authorized in its discretion to appoint brokers and
agents in connection with the Bank's handling of transactions relating to the
Property provided that any such appointment shall not relieve the Bank of any
of its responsibilities or liabilities hereunder.
8. Written instructions shall include (i) instructions in writing
signed by such persons as are designated in writing by State Street (ii) telex
or tested telex instructions of State Street, (iii) other forms of instruction
in computer readable form as shall be customarily utilized for the
transmission of like information and (iv) such other forms of communication as
from time to time shall be agreed upon by State Street and the Bank.
2
9. The Bank shall supply periodic reports with respect to the
safekeeping of assets held by it under this Agreement. The content of such
reports shall include but not be limited to any transfer to or from any
Account held by the Bank hereunder and such other information as State Street
may reasonably request.
10. In addition to its obligations under Section 2 hereof, the Bank
shall maintain such other records as may be necessary to identify the assets
hereunder as belonging to each State Street client identified to this
Agreement from time to time.
11. The Bank agrees that its books and records relating to its
actions under this Agreement shall be opened to the physical, on-premises
inspection and audit at reasonable times by officers of, auditors employed by
or other representatives of State Street (including to the extent permitted
under _____________ law the independent public accountants for any entity
whose Property is being held hereunder) and shall be retained for such period
as shall be agreed by State Street and the Bank.
12. The Bank shall be entitled to reasonable compensation for its
services and expenses as custodian under this Agreement, as agreed upon from
time to time by the Bank and State Street.
13. The Bank shall exercise reasonable care In the performance of
its duties as are set forth or contemplated herein or contained In
instructions given to the Bank which are not contrary to this Agreement, and
shall maintain adequate insurance and agrees to indemnify and hold State
Street and each Account from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the Bank's performance
of its obligations hereunder.
14. The Bank agrees that (i) the Property is not subject to any
right, charge, security interest, lien or claim of any kind in favor of the
Bank or any of its agents or its creditors except a claim of payment for their
safe custody and administration and (ii) the beneficial ownership of the
Property shall be freely transferable without the payment of money or other
value other than for safe custody or administration.
15. This Agreement may be terminated by the Bank or State Street by
at least 60 days' written notice to the other, sent by registered mail or
express courier. The Bank, upon the date this Agreement terminates pursuant to
notice which has been given in a timely fashion, shall deliver the Property in
accordance with written instructions of State Street specifying the names) of
the person(s) to whom the Property shall be delivered.
16. The Bank and State Street shall each use its best efforts to
maintain the confidentiality of the Property in each Account, subject,
however, to the provisions of any laws requiring the disclosure of the
Property.
17. The Bank agrees to follow such Operating Requirements as State
Street may require from time to time. A copy of the current State Street
Operating Requirements is attached as an exhibit to this Agreement.
18. Unless otherwise specified in this Agreement, all notices with
respect to matters contemplated by this Agreement shall be deemed duly given
when received in writing or
3
by tested telex by the Bank or State Street at their respective addresses set
forth below, or at such other address as specified in each case in a notice
similarly given:
To State Street: Global Custody Services Division
STATE STREET BANK AND TRUST
COMPANY
P. X. Xxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
To the Bank:
19. This Agreement shall be governed by and construed in accordance
with the laws of ________________.
Please acknowledge your agreement to the foregoing by executing a
copy of this letter.
Very truly yours,
STATE STREET BANK AND TRUST
COMPANY
BY________________________
Agreed to by
By_____________________
Date____________________
4
