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Exhibit 99.b.8
CUSTODIAN CONTRACT
Between
AMERICAN AADVANTAGE FUNDS
and
FIRST REPUBLICBANK DALLAS, N.A.
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TABLE OF CONTENTS
Page
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1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian with Respect to Property of the Fund Held by the
Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 5
2.5 Investment and Availability of Federal Funds 6
2.6 Collection of Income 6
2.7 Payment of Fund Monies 7
2.8 Liability for Payment in Advance of Receipt of Securities Purchased 9
2.9 Appointment of Agents 9
2.10 Deposit of Securities in Security System 9
2.11 Segregated Account 11
2.12 Ownership Certificates for Tax Purposes 12
2.13 Proxies 12
2.14 Communications Relating to Fund Portfolio Securities 13
2.15 Reports to Fund by Independent Public Accountants 13
3. Proper Instructions 14
4. Actions Permitted Without Express Authority 14
5. Evidence of Authority 15
6. Duties of Custodian with Respect to the Books of Account and Calculation of
Net Asset Value and Net Income 15
7. Records 15
8. Opinion of Fund's Independent Accountant 16
9. Compensation of Xxxxxxxxx 00
00. Responsibility of Xxxxxxxxx 00
00. Effective Period, Termination and Amendment 17
12. Successor Custodian 18
13. Interpretive and Additional Provisions 19
14. Texas Law to Apply 20
15. Prior Contracts 21
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CUSTODIAN CONTRACT
AGREEMENT made as of the 3rd day of April, 1987, between American AAdvantage
Funds, a Massachusetts business trust, having its principal place of business
at 0000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000, hereinafter called the
"Trust", and First RepublicBank Dallas, N.A., a national banking association,
having its principal place of business at 000 Xxxxx Xx. Xxxx Xxxxxx, Xxxxxx,
Xxxxx 00000, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets of each
of the Trust's series of shares of beneficial interest. The term "Fund" as used
hereinafter shall mean each and all such series in existence as of the date
hereof and, if mutually agreed by the Trust and the Custodian at such time,
each such series hereafter designated by the Trust.
The Fund agrees to deliver to the Custodian all securities and cash owned by
it, and all payments of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Fund from time to
time, and the cash consideration received by it for such shares of beneficial
interest ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or
received by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 3), the
Custodian shall from time to time employ one or more sub-custodians located in
the United States, provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian.
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in the
United States, including all domestic securities owned by the Fund, other than
securities which are maintained pursuant to Section 2.10 in a clearing agency
which acts as a securities depository or in a book-entry system authorized by
the U. S. Department of the Treasury, collectively referred to herein as
"Securities System."
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper Instructions, which
may be continuing
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instructions when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any agent
appointed Pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) To the broker selling the same or its clearing agent, for
examination in accordance with the "street delivery" custom;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement,
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or
instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U. S.
Department of the Treasury, the Custodian will not be held
liable or
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responsible for the delivery of securities owned by the Fund
prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding account
deposits in connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus and statement of
additional information I "prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption;
and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a properly executed
copy of a resolution of the Trustees of the Trust, specifying
the securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purposes to
be proper Fund purposes, and naming the person or persons to
whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the Fund or
in the name of any nominee of the Fund or of any nominee of the Custodian (such
nominee may be used in common with other Funds and other registered investment
companies having the same investment adviser as the Fund), or in the name or
nominee name of any agent appointed pursuant to Section 2.9 or in the name or
nominee name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Fund under the terms of
this Contract shall be in "street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject only
to draft or order by the Custodian
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acting pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund, other than cash maintained by the Fund in a bank
account established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be deposited
by it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment Company
Act of l940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by the
Trustees of the Trust. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in that
capacity.
2.5 Investment and Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the receipt of
Proper Instructions,
1) invest in such instruments as may be set forth in such instructions
on the same day as received all federal funds received after a time
agreed upon between the Custodian and the Fund; and
2) make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in the
amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.6 Collection of Income. The Custodian shall collect on a timely basis
all income and other payments with respect to United States registered
securities held hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to United States bearer
securities if, on the date of payment by the issuer, such securities are held by
the Custodian or agent thereof and shall credit such income, as collected, to
the Fund's custodian account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due the Fund on United
States securities loaned pursuant to the provisions of Section 2.2 (10) shall be
the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is properly
entitled.
2.7 Payment of Fund Moneys. Upon receipt of Proper Instructions which may
be continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out moneys of the Fund in the following cases only:
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l) Upon the purchase of domestic securities, futures contracts or
options on futures contracts for the account of the Fund but
only (a) against the delivery of such securities, or evidence
of title to futures contracts or options on futures contracts,
to the Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the
name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.10 hereof or (c) in the case of repurchase
agreements entered into between the Fund and the Custodian, or
another bank, or a broker dealer which is a member of NASD,
(i) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account at
the Federal Reserve Bank with such securities (notwithstanding
that: the written confirmation of such repurchase transaction
will be received subsequently) or (ii) against delivery of the
receipt evidencing purchase by the Fund of securities owned by
the Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the Fund
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be
in whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a properly executed copy of a
resolution of the Trustees of the Trust, specifying the amount
of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment
is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for purchase of domestic securities for the
account of the Fund is made by the
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Custodian in advance of receipt of the securities purchased in the absence of
specific written instructions from the Fund to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to the same extent
as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
which is itself qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided, however,
that the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The Custodian may deposit
and/or maintain domestic securities owned by the Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities depository, or in
the book-entry system authorized by the U. S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary custodian or
otherwise for customers;
2) The records of the Custodian with respect to domestic
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund;
3) The Custodian shall pay for domestic securities purchased for
the account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer domestic
securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such
securities has been transferred to the Account, and ( ii ) the
making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies
of all advises from the Securities System of transfers of
domestic securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund
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confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall
furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System
for the account of the Fund.
(4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
domestic securities deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 11
hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage
to the Fund resulting from use of the Securities System by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent
to enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has
not been made whole for any such loss or damage.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the Fund or
commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required
by Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the maintenance
of segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a properly executed copy of a
resolution of the Trustees of the Trust, setting forth the purpose or purposes
of such segregated
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account and declaring such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
domestic securities of the Fund held by it and in connection with transfers of
such securities.
2.13 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of the
Fund or a nominee of the Fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall Promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.14 Communications Relating to Fund Portfolio Securities. The Custodian
shall transmit promptly to the Fund all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of call
and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from issuers of the
domestic securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic securities
whose tender or exchange is sought and from the party (or his agents making the
tender or exchange offer. If the Fund desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the Fund
shall notify the Custodian at least three business days prior to the date on
which the Custodian is to take such action.
2.15 Reports to Fund by Independent Public Accountants. Custodian shall
provide the Fund, at such times as the Fund may reasonably require, with
reports by independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including domestic securities
deposited and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, which shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Fund, to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, shall so
state.
3. Proper Instructions
Proper Instructions as used herein means a writing signed or initialed by one
or more person or persons as the Trustees of the Trust shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type of transaction
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involved, including a specific statement of the purpose for which such action
is requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Trustees of the Trust as to the authorization by the Trust's
Trustees accompanied by a detailed description of procedures approved by the
Trust's Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Trustees of the Trust and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets.
4. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Trustees of
the Fund.
5. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a properly executed copy of a document
evidencing action taken by the Trustees of the Trust as conclusive evidence (a)
of the authority of any person to act in accordance with such action or (b) of
any determination or of any action by the Trustees pursuant to the governing
instrument of the Trust, and such action may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
6. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Trustees of the Trust to keep the books of
account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
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income and, if instructed in writing by an officer of the Trust to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
7. Records
The Custodian shall create and maintain all records relating to its activities
and obligations under this Contract in such manner as will meet the obligations
of the Fund under the Investment Company Act of 1940, with particular attention
to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal
and state tax laws and any other law or administrative rules or procedures
which may be applicable to the Fund. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized employees or agents of the
Fund and employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed
upon between the Fund and the Custodian, include certificate numbers in such
tabulations.
8. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-lA, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
9. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
10. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties . The Custodian
shall be held to the exercise of reasonable care in carrying out the provisions
of this Contract, but shall be kept indemnified by and shall be without
liability to the Fund for any action taken or omitted by it in good faith
without negligence. It shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
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If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or incurring liability of
some other form, the Fund, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose 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.
11. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid
to the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided, however that the
Custodian shall not act under Section 2.10 hereof in the absence of receipt of
an initial certificate of the Trustees of the Trust that the Trustees of the
Trust have approved the initial use of a particular Securities System and the
receipt of an annual certificate of the Trustees of the Trust that the Trustees
have reviewed the use by the Fund of such Securities System, as required in
each case by Rule 17f-4 under the Investment Company Act of 1940, as amended;
provided further, however, that the Fund shall not amend or terminate this
Contract in contravention of any applicable federal or state regulations, or
any provision of the governing instrument of the Fund, and further provided,
that the Fund may at any time by action of the Trustees substitute another bank
or trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller
of the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
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12. Successor Custodian
If a successor custodian shall be appointed by the Trustees of the Trust, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a properly executed copy of a document evidencing
action taken by the Trustees of the Trust, deliver at the office of the
Custodian and transfer such securities, funds and other properties in
accordance with such action.
In the event that no written order designating a successor custodian or
properly executed copy of a document evidencing action taken by the Trustees of
the Trust shall have been delivered to the Custodian on or before the date when
such termination shall become effective, then the Custodian shall have the
right to deliver to a bank or trust company, which is a "bank" as defined in
the Investment Company Act of 1940, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held
by the Custodian and all instruments held by the Custodian relative thereto and
all other property held by it under this Contract and to transfer to an account
of such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the properly executed Copy of a document
evidencing action taken by the Trustees of the Trust or of the Trustees to
appoint a successor custodian, the Custodian shall be entitled to fair
compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the Custodian shall
remain in full force and effect.
13. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Contract as may in their joint opinion be consistent
with the general tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
governing instrument of the Fund. No interpretive or additional provisions made
as
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provided in the preceding sentence shall be deemed to be an amendment of this
Contract.
The Custodian agrees that any claims by it against the Trust under this
Contract may be satisfied only from the assets of the Trust; that the person
executing this Contract on behalf of the Trust has executed it in his capacity
as an officer of the Trust and not individually, and that the obligations of
the Trust arising out of this Contract are not binding upon such person or the
Trust's shareholders individually but are binding only upon the assets and
property of the Trust; and that no shareholders, trustees or officers of the
Trust may be held personally liable or responsible for any obligations of the
Trust arising out of this Contract.
The Trust agrees that the person executing this Contract on behalf of the
Custodian has executed it in his capacity as an officer of the Custodian and
not individually, and that the obligations of the Custodian arising out of this
Contract are not binding on such person or the Custodian's officers, directors,
employees or shareholders individually but are binding only upon the Custodian;
and that no officer, director, employee or shareholder of the Custodian may be
held personally liable or responsible for any obligations of the Custodian
arising out of this Contract.
14. Texas Law to Apply
This Contract shall be construed and the provisions thereof interpreted under
and in accordance with laws of the State of Texas.
15. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
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 ______day of ______ , 1987.
ATTEST AMERICAN AADVANTAGE FUNDS
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
----------------------------- ----------------------------
Authorized Employee By: Xxxxxxx X. Xxxxx
ATTEST FIRST REPUBLICBANK DALLAS, N.A.
/s/ Xxxxx X. Xxxxxxx /s/ X.X. Xxxxxxx
-------------------------- -------------------------
Authorized Officer By: Sr. Vice President and
Trust Officer
