EX-99.B8(c)
CUSTODIAN AGREEMENT
AGREEMENT made as of this ____ day of ___________ 1997 between
XXXXX STREET FUNDS, INC. ("MSF") on behalf of each of the
series of stock (the "Funds") listed on Appendix A hereto
(initially, International Equity Fund, Asset Allocation Fund,
Aggressive Growth Stock Fund, Growth Stock Fund, High Yield Bond
Fund and Select Bond Fund) as the same may be amended from time
to time, and XXXXX BROTHERS XXXXXXXX & CO. (the "Custodian").
WITNESSETH
WHEREAS MSF is organized as a Maryland corporation with one or
more series of shares, and is an open-end management investment
company registered with the Securities and Exchange Commission.
WHEREAS MSF wishes to employ the Custodian and the Custodian
has agreed to provide global custody, banking and related
services to each Fund in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, MSF and the Custodian agree as
follows:
1. Appointment of Custodian. Upon the terms and conditions set
forth in this Agreement, the Funds hereby appoint the Custodian
as a custodian, and the Custodian hereby accepts such
appointment. Each Fund shall deliver or shall cause to be
delivered to the Custodian foreign cash, securities and other
property ("Property") owned by the Fund from time to time during
the term of this Agreement. The Custodian shall be under no
obligation to request or to require that any or all Property of
a Fund be delivered to it, but the Custodian shall have no
responsibility with respect to any Property not delivered to it.
Unless the context otherwise requires, all references in this
Agreement to MSF shall include each Fund.
2. Definitions.
In this Agreement, the following words shall, unless the
context otherwise requires, have the following meanings:
(i) "1940 Act" - the Investment Company Act of 1940 and the
rules and regulations thereunder.
(ii) "Advances" - shall have the meaning ascribed to it in
Section 11 hereof.
(iii) "Agency Accounts" - shall have the meaning ascribed to it
in Section 5 hereof.
(iv) "BBH Accounts" - shall have the meaning ascribed to it in
Section 5 hereof.
(v) "Book-Entry agent" - shall have the meaning ascribed to it
in Section 4.1(b) hereof.
(vi) "Derivative Instruments and Commodities" - any form of risk
transfer contract in which a gain or loss is recognized from
fluctuations in market price levels which include without
limitation futures, forwards, options, swaps, swaptions, forward
rate and forward exchange contracts, leverage or commodity
related similar contracts and any other contract whether traded
on or off an exchange.
(vii) "Electronic Instructions" - shall have the meaning
ascribed to it in Section 8.3 hereof.
(viii) "Electronic Reports" - shall have the meaning ascribed to
it in Section 8.3 hereof.
(ix) "Force Majeure" - shall have the meaning ascribed to it in
Section 10.4 hereof.
(x) "Investments" - assets of a Fund other than Property which
the Custodian may note on its records including without
limitation Derivative Instruments and Commodities.
(xi) "Liability" - shall have the meaning ascribed to it in
Section 11 hereof.
(xii) "Margin Account" - shall have the meaning ascribed to it
in Section 4.2(d) hereof.
(xiii) "Margin Agreement" - shall have the meaning ascribed to
it in Section 4.2(d) hereof.
(xiv) "Omnibus Accounts" - accounts established in the name of
the Custodian on behalf of its customers in which assets on
deposit with the Custodian by one or several customers may be
deposited. Omnibus Accounts may be established for the purpose
of holding cash or securities.
(xv) "Proper Instructions" - any direction to take or not to
take action in respect of Property or Investments (including
cash) which the Custodian reasonably believes to be sent by an
authorized person and to be genuine. Proper Instructions may be
sent via the media set forth in Section 6 hereof or as otherwise
agreed between the Custodian and the Fund.
(xvi) "Property" - shall have the meaning ascribed to it in
Section 1 hereof.
(xvii) "Securities Accounts" - shall have the meaning ascribed
to it in Section 4 hereof.
(xviii) "Securities Depository" - a generally recognized
book-entry system or clearing agency which acts as a securities
depository in any country in which securities are maintained
under this Agreement and with which the Custodian or
Subcustodian may maintain securities or other investments owned
by or held on behalf of the Funds as trustee for the Funds,
pursuant to the provisions hereof. Securities Depository shall
also include Euroclear and Cedel.
(xix) "Segregated Accounts" - shall have the meaning ascribed to
it in Section 4.2(d) hereof.
(xx) "Subcustodian" - shall mean any subcustodian appointed
pursuant to Section 7 of this Agreement.
(xxi) "Voluntary Corporate Actions" - corporate actions which
require an investment decision.
3. Representations, Warranties and Covenants of each Fund.
Each Fund represents and warrants that the execution, delivery
and performance by the Fund of this Agreement are within the
Fund's corporate, trust or other constitutive powers, have been
duly authorized by all necessary corporate, trust or appropriate
action under its constitutive documents, and do not contravene
or constitute a default under any provision of applicable law or
regulation or of the constitutive documents of the Fund or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Fund. Each Fund agrees to inform the
Custodian reasonably promptly if any statement set forth in this
Section 3 or elsewhere in this Agreement ceases to be true and
correct. Each Fund shall safeguard and shall solely be
responsible for the safekeeping of any testkeys, identification
codes, other security devices or statements of account with
which the Custodian provides it. If and when applicable, each
Fund shall execute a license agreement governing its use of any
electronic instruction system proprietary to the Custodian or an
affiliate of the Custodian.
Each Fund hereby represents and warrants that it has disclosed,
or will fully and adequately disclose, all investments risks,
including without limitation those relating to the custody or
servicing of foreign securities in the markets in which the Fund
invests or intends to invests, to any participants, related
parties, beneficial owners, shareholders or other persons who
have property or contractual rights to or interests in the
Property or other Investments which are the subject of this
Custodian Agreement.
4. Securities Account. Each Fund hereby authorizes the
Custodian to open and maintain, with itself or with
Subcustodians, securities accounts in the name of each Fund (the
"Securities Accounts") and authorizes the Custodian to deposit
or record, as the case may be, in such Securities Account each
Fund's Property delivered to and accepted by the Custodian, or
such other Investments as the Fund requests the Custodian to
record by notation only, in all cases to be managed by the
Investment Adviser. The Custodian shall keep safely all property
delivered to it. In the event of a loss of a Security due to the
Custodian's negligence, bad faith or willful malfeasance, the
Custodian shall be responsible for either replacing the
securities or for reimbursing the Fund the value of the
securities. The Securities Account shall be maintained in the
manner and on the terms set forth below. (All references in this
Section to the Custodian shall include a Subcustodian,
Securities Depository or any agent of the Custodian.)
4.1 Manner of Holding or Recording Securities and Other
Investments -
(a) Securities Represented by Physical Certificates -
Securities represented by share certificates or other
instruments may be held in registered or bearer form (i) in the
Custodian's vault, (ii) in the vault of a Subcustodian or other
agent of the Custodian, (iii) in an account maintained by the
Custodian or a Subcustodian at a Securities Depository as herein
defined, or (iv) as is customary market practice in the
Custodian's discretion in the country in which settlement is to
occur or for the particular security in respect of which
settlement is instructed.
Securities held at a Subcustodian will be held subject to the
terms of the Subcustodian Agreement in effect between the
Custodian and the Subcustodian. Such securities shall be held in
an account which does not contain assets of the Custodian but
may be held in Omnibus Accounts.
Securities held in a Securities Depository will be held subject
to the agreement, rules, statement of terms and conditions or
other document or conditions effective between the Custodian and
the Securities Depository or the Subcustodian and the Securities
Depository. Such securities shall be held (i) in an account
which contains only assets of the Custodian held as custodian if
such account is maintained by the Custodian with the Securities
Depository, or (ii) in an account which contains assets of the
Subcustodian or other agent held as custodian if such account is
maintained by the Subcustodian or other agent with the
Securities Depository.
Registered securities of each Fund may be registered in the name
of the Custodian, the Fund or a nominee of either of them and
may be held in any manner set forth above, with or without any
indication of fiduciary capacity, provided that securities are
held in an account of the Custodian or a Subcustodian containing
only assets of the Fund or only assets held by the Custodian as
custodian for its customers.
(b) Securities Represented by Book-Entry - Securities
represented by book-entry on the books of the issuer, a
registrar, a clearing agency or other agent of the issuer
("Book-Entry Agent") may be so held in an account of the
Custodian or a Subcustodian or other Agent maintained with such
Book-Entry Agent provided such account contains only assets of
the Fund or only assets held as custodian for customers.
(c) Investments not Represented by Securities - At the specific
request of a Fund, the Custodian may note on its records
Investments owned by the Fund that are not represented by
physical securities or by book-entry on the shareholder register
of the issuer, including without limitation Derivative
Instruments and Commodities. Each Fund acknowledges that such
notation is for recordkeeping purposes only, that the Custodian
may not be able to exercise control over such instruments and
that such instruments may represent contractual rights of the
Fund which the Custodian cannot enforce. The Fund shall be
responsible for requesting that any statements applicable to
such Investments, including brokerage statements, be sent to the
Custodian.
4.2 Powers and Duties of the Custodian with Respect to the
Securities Account - The Custodian shall have the following
powers and duties with respect to the Securities Account:
(a) Purchases - Upon receipt of Proper Instructions, insofar as
funds are available or as funds are otherwise provided by the
Custodian at its discretion pursuant to Section 11 hereof for
the purpose, to pay for and receive securities purchased for
the account of a Fund, payment being made (i) upon receipt of
the securities by the Custodian, by a clearing corporation of a
national securities exchange of which the Custodian or a
Subcustodian is a member, or by a Securities Depository, or (ii)
otherwise in accordance with (A) governmental regulations, (B)
rules of Securities Depositories or other U.S. or foreign
clearing agencies, (C) generally accepted trade practice in the
applicable local market, (D) the terms of the instrument
representing the security, or (E) the terms of Proper
Instructions.
(b) Sales - Upon receipt of Proper Instructions, to make
delivery of securities which have been sold for the account of a
Fund (i) against payment therefor in cash, by check or by bank
wire transfer; (ii) by credit to the account of the Custodian
or Subcustodian with a clearing corporation of a securities
exchange of which the Custodian or a Subcustodian is a member;
(iii) by credit to the account of the Custodian or Subcustodian
with a Securities Depository; or (iv) otherwise in accordance
with (A) governmental regulations, (B) rules of Securities
Depositories or other U.S. or foreign clearing agencies, (C)
generally accepted trade practice in the applicable local
market, (D) the terms of the instrument representing the
security, or (E) the terms of Proper Instructions.
(c) Other transfers - To deliver Property of a Fund to a
Subcustodian, another custodian or another third party as
necessary to effect transactions authorized by Proper
Instructions, and upon receipt of Proper Instructions, to make
such other disposition of Property of the Fund in a manner other
than or for purposes other than as enumerated elsewhere in this
Agreement, provided that the instructions relating to such
disposition shall state the amount of Property to be delivered
and the name of the person or persons to whom delivery is to be
made.
(d) Futures; Options; Segregated Accounts - Upon the receipt of
Proper Instructions and the execution of any agreements relating
to margin in respect of a Derivative Instrument or Commodity
("Margin Agreements"), to establish and maintain on its books a
segregated account or accounts for and on behalf of any Fund,
into which account or accounts may be transferred cash and/or
securities of the Fund in accordance with the terms of such
Margin Agreements and any Proper Instructions ("Segregated
Accounts").
Upon receipt of Proper Instructions or upon receipt of
instructions given pursuant to any Margin Agreement, or pursuant
to the terms of such Agreement, the Custodian shall (i) receive
and retain, to the extent the same are provided to the
Custodian, confirmations or other documents evidencing the
purchase or sale of such Derivative Instruments or Commodities
by the Fund; (ii) deposit and maintain, pursuant to a Margin
Agreement, in a segregated account, either physically or by
book-entry in a Securities Depository, for the benefit of any
futures commission merchant ("Margin Account"), or pay pursuant
to Proper Instructions to such futures commission merchant,
securities, cash or other assets designated by the Fund as
initial, maintenance or variation "margin" deposits or other
collateral intended to secure the Fund's performance of its
obligations under the terms of any Derivative Instruments and
Commodities, in accordance with the provisions of any Margin
Agreement relating thereto; and (iii) pay, release and/or
transfer securities, cash or other assets into or out of such
Margin Accounts only in accordance with any such agreement. The
Custodian shall not be responsible for the sufficiency of assets
held in any segregated account established in compliance with
applicable margin maintenance requirements or for the
performance of the other terms of any agreement relating to a
Derivative Instrument or Commodity.
Notwithstanding anything in this Agreement to the contrary, the
Fund agrees that the Custodian's responsibility for any
Derivative Instruments and Commodities shall be limited to the
exercise of reasonable care with respect to any confirmations or
other documents evidencing the purchase or sale of such
Derivative Instrument by the Fund which the Custodian receives.
(e) Stock Lending - Upon receipt of Proper Instructions, to
deliver securities of a Fund, in connection with loans of
securities by the Fund, to the borrower thereof prior to receipt
of the collateral, if any, for such borrowing.
(f) Non-discretionary details - Without the necessity of express
authorization from a Fund, (1) to attend to all nondiscretionary
details in connection with the sale, exchange, substitution,
purchase, transfer or other dealings with securities, funds or
other property of the Fund held by the Custodian except as
otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or
others for minor expenses of handling securities or other
similar items relating to the Custodian's duties under this
Agreement, provided that all such payments shall be accounted
for to the Fund.
4.4 Corporate Actions - Unless the Custodian receives timely
Proper Instructions to the contrary, the Custodian will perform
or will cause the Subcustodian to perform the following:
(i) exchange securities held by it for the account of a 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;
(ii) surrender securities in temporary form for definitive
securities; surrender securities for transfer into the name of
the Custodian, the Fund or a nominee of either of them, as
permitted by Section 4.1(a); and surrender securities for a
different number of certificates or instruments representing the
same number of shares or same principal amount of indebtedness;
(iii) 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, and
deposit securities upon invitations for tenders thereof;
(iv) take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions,
or similar rights of security ownership, and shall promptly
notify the Fund of such action, and collect all stock
dividends, rights and other items of like nature;
(v) collect amounts due and payable to a Fund with respect to
portfolio securities of the Fund, and 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,
provided that the Custodian shall not be responsible for the
collection of amounts due and payable with respect to portfolio
securities that are in default;
(vi) endorse and deliver any instruments required to effect
collection of any amount due and payable to a Fund with respect
to securities; execute ownership and other certificates and
affidavits on the Fund's behalf for all federal, state and
foreign tax purposes in connection with receipt of income,
capital gains or other payments with respect to portfolio
securities and other assets of the Fund, or in connection with
the purchase, sale or transfer of such securities or other
assets; and file any certificates or other affidavits for the
refund or reclaim of foreign taxes paid;
(vii) deliver to a Fund 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.
It is agreed that, in the fulfillment of its duties set forth
above, (i) the Custodian shall be responsible for sending to the
Fund all information pertaining to the relevant terms of a
corporate action which it in fact receives, and (ii) the
Custodian shall not be responsible for incorrect information it
receives, or information it has not received, from
industry-accepted third-party securities information vendors.
Notwithstanding any provision of this Agreement to the
contrary, with respect to portfolio securities registered in
so-called street name, the Custodian shall use reasonable
efforts to collect cash or share entitlements due and payable to
the Fund but shall not be responsible for its inability to
collect such cash or share entitlements.
The Custodian shall only be responsible for acting on the
instructions of a Fund in respect of any Voluntary Corporate
Action provided the Custodian has received a Proper Instruction
requesting such action in reasonable time prior to expiration of
such action to ensure that Custodian has sufficient time to take
such action. The deadline for the acceptance of such instruction
may be set forth by the Custodian in its communication of the
terms of such action to the Fund and shall take into
consideration delays which occur due to (i) the involvement of a
Subcustodian, Agent, Securities Depository or other
intermediary; (ii) differences in time zones; or (iii) other
factors particular to a given market, exchange or issuer.
Any advance credit of cash or shares expected to be received as
a result of any corporate event shall be subject to actual
collection and may, when the Custodian deems such collection
unlikely, be reversed by the Custodian upon written notice to a
Fund. As used herein, an "advance credit of cash or shares"
shall mean any credit of cash or shares to any account
maintained hereunder prior to actual receipt and collection of
such cash or shares in anticipation of a distribution expected
to be received in the future.
5. Cash Accounts. Subject to the terms and conditions set forth
in this Section 5, each Fund hereby authorizes the Custodian to
open and maintain, with itself or with Subcustodians, cash
accounts in the name of each Fund in United States Dollars and
in such other currencies as the Fund shall from time to time
request or as are in the Custodian's discretion required in
order for the Custodian to carry out the terms of this
Agreement. The Custodian shall make payments from or deposits to
any of said accounts upon its receipt of Proper Instructions
from a Fund providing sufficient details to effect such
transaction.
Cash accounts opened on the books of the Custodian ("BBH
Accounts") shall be opened in the name of each Fund. Subject
always to the provisions of Section 10 hereof, the Custodian
shall be principally liable for repayment of any and all
deposits carried on its books as principal, whether denominated
in United States Dollars or in other currencies.
Cash accounts opened on the books of Subcustodians appointed
pursuant to Section 7 hereof may be opened in the name of a Fund
or the Custodian or in the name of the Custodian for its
customers generally ("Agency Accounts"). Such deposits shall be
treated as portfolio securities, and accordingly the Custodian
shall be responsible for the exercise of reasonable care in
respect of the administration of such Agency Accounts but shall
not be liable for their repayment in the event the Subcustodian
fails to make repayment (including in the event of the
Subcustodian's bankruptcy or insolvency.) Both BBH Accounts and
Agency Accounts shall have the benefit of the provisions of
Section 10 of this Agreement.
Each Fund bears all risks of holding or transacting in any
currency. Any credit made to any Agency or BBH Account shall
be provisional and may be reversed by the Custodian in the event
such payment is not actually collected.
The Custodian shall not be liable for any loss or damage
arising from the applicability of any law or regulation now or
hereafter in effect, or from the occurrence of any event, which
may delay or affect the transferability, convertibility, or
availability of any currency in the country (i) in which such
BBH or Agency Accounts are maintained or (ii) in which such
currency is issued, and in no event shall the Custodian be
obligated to make payment of a deposit denominated in a currency
during the period during which its transferability,
convertibility or availability has been affected by any such
law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be
required to repay any deposit made at a foreign branch of either
the Custodian or Subcustodian if such branch cannot repay the
deposit due to (i) an act of war, insurrection or civil strife;
or (ii) an action by a foreign government or instrumentality,
whether de jure or de facto, in the country in which the branch
is located preventing such repayment, unless the Custodian or
such Subcustodian expressly agrees in writing to repay the
deposit under such circumstances.
All currency transactions in any account opened pursuant to
this Agreement are subject to exchange control regulations of
the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes,
costs, charges or fees imposed on the convertibility of a
currency held by the Fund shall be for the account of the Fund.
In the event a delay is caused by the negligence or willful
misconduct of the Custodian in carrying out a Proper Instruction
to transfer cash, the Custodian shall be liable to a Fund for
interest to be calculated at the rate customarily paid by the
Custodian on overnight deposits at the time the delay occurs for
the period from the day when the transfer would have been
effected until the day it is in fact effected. The Custodian
shall not be liable for delays in carrying out such instructions
to transfer cash which are not due to the Custodian's own
negligence or willful misconduct.
5.1 Foreign Exchange Transactions - The Custodian shall,
pursuant to Proper Instructions, settle foreign exchange
contracts or options to purchase and sell foreign currencies for
spot and future delivery on behalf and for the account of each
Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to
Proper Instructions. 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 as the Custodian may receive. In connection with
such transactions, the Custodian is authorized to make free
outgoing payments of cash in the form of U. S. Dollars or
foreign currency without receiving confirmation of a foreign
exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract
has been delivered or received or that the option has been
delivered or received. The Fund accepts full responsibility for
its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all
costs and interest charges which may be incurred by a Fund or
the Custodian as a result of the failure or delay of third
parties to deliver foreign exchange.
Foreign exchange transactions (including without limitation
contracts, futures, options, and options on futures) other than
those executed with the Custodian as principal, but including
those executed with Subcustodians, shall be deemed to be
portfolio securities of a Fund and accordingly the Custodian
shall only be responsible for delivering or receiving currency
in respect of such contracts pursuant to Proper Instructions
subject to the fourth paragraph of this Section 5. The Custodian
shall not be responsible for the failure of any counterparty in
such agency transaction to perform its obligations thereunder.
Alternatively, such transactions may be undertaken by the
Custodian as principal, if instructed by a Fund which
instructions may be in the form of a standing instruction. The
obligations of the Custodian in respect of all foreign exchange
transactions shall be contingent on the free, unencumbered
transferability of the currency transacted on the actual
settlement date of the transaction.
In the event a delay is caused by the negligence or willful
misconduct of the Custodian in carrying out a Proper Instruction
to transfer cash, the Custodian shall be liable to a Fund for
interest to be calculated at the rate customarily paid by the
Custodian on overnight deposits at the time the delay occurs for
the period from the day when the transfer would have been
effected until the day it is in fact effected. The Custodian
shall not be liable for delays in carrying out such instructions
to transfer cash which are not due to the Custodian's own
negligence or willful misconduct.
6. Proper Instructions. Proper Instructions shall include, in
the following order of the preferred method of giving such
instructions, authenticated electromechanical communications
including direct electronic transmissions, authenticated SWIFT
and tested telex; a written request signed by two or more
authorized persons as set forth below; telefax transmissions;
oral instructions, including telephone; and such other methods
of communicating Proper Instructions as the parties hereto may
from time to time agree. Each of the first four methods of
communicating Proper Instructions is described and defined below
and may from time to time be described and defined in written
operating memoranda between the Custodian and the Fund. The
Custodian is hereby authorized to act on instructions sent via
any of the foregoing methods from any director, employee or
officer of the Fund or from the investment manager or other
agent as the Fund shall from time to time instruct.
Authenticated electro-mechanical communications shall include
communications effected directly between electromechanical or
electronic devices or systems, including authenticated SWIFT and
tested telex transmissions, and other forms of communications
involving or between such electro-mechanical or electronic
devices or systems as the parties may from time to time agree
upon in writing. In the event media other than tested telex
transmissions are agreed upon, the Custodian may in its
discretion require that the Fund and the Custodian enter into
certain operating memoranda which shall set forth the media
through which such Proper Instructions shall be transmitted and
the data which must be included in such Proper Instructions in
order for such instructions to be complete. Once such operating
memoranda shall have been instituted, the Fund shall be
responsible for sending instructions which meet the requirements
set forth in such operating memoranda and the Custodian shall
only be responsible for acting on instructions which meet such
requirements. The Custodian shall not be liable for damages of
any kind, including direct or consequential losses resulting
from technical failures or communications system failures of any
kind in respect of instructions sent or attempted to be sent via
electromechanical or electronic communications.
A written request signed by two or more authorized persons
shall include a written request, direction, instruction or
certification signed or initialed on behalf of the Fund by two
or more persons as the Directors shall have from time to time
authorized, or by such other written procedure as the Custodian
and the Fund shall from time to time agree in writing. Those
persons authorized to give Proper Instructions may be identified
by the Directors by name, title or position and will include at
least one officer empowered by the Directors to name other
individuals or entities who are authorized to give Proper
Instructions on behalf of the Fund (including any of its
directors, employees or agents or any investment manager or
adviser or person or entity with similar responsibilities which
is authorized to give Proper Instructions on behalf of the Fund
to the Custodian).
Telephonic or other oral instructions or instructions given by
telefax transmission may be given by any one of the Persons
referred to in the preceding paragraph and will be considered
Proper Instructions if the Custodian believes them to have been
given by a person authorized to give such instructions with
respect to the transaction involved.
With respect to telefax transmissions, the Fund and the
Custodian hereby acknowledge that receipt of legible
instructions cannot be assured, and that the Custodian cannot
verify that authorized signatures on telefax instructions are
original or properly affixed. Accordingly, the Custodian shall
not be responsible for losses or expenses incurred through
actions taken in reliance on inaccurately stated, illegible or
unauthorized telefax instructions.
Oral instructions will be confirmed by authenticated
electro-mechanical communications or written instructions in the
manner set forth above, but the lack of such confirmation shall
in no way affect any action taken by the Custodian in reliance
upon such oral instructions. The Fund hereby authorizes the
Custodian to tape record any and all telephonic or other oral
instructions given to the Custodian by or on behalf of the Fund
(including any of its directors, employees or agents or any
investment manager or adviser or person or entity with similar
responsibilities which is authorized to give Proper Instructions
on behalf of the Fund 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.
The Custodian shall not be responsible for its failure to act on
any instruction received from the Fund which the Custodian in
good faith believes does not meet the requirements set forth
herein.
The Fund hereby authorizes the Custodian to act on instructions
received from an Investment Adviser authorized pursuant to this
Section, provided the Custodian reasonably believes such
instruction to have been sent by an authorized person at the
Investment Adviser or by tested telex, SWIFT or other electronic
devices or systems to which the Custodian and the Fund or the
Investment Adviser have agreed, such instructions to be deemed
proper instructions under this Section 6. Such instructions
shall be deemed Proper Instructions and accordingly shall have
the benefit of the indemnification provision of Section 10.2
hereof.
7. Authority to Appoint Subcustodians and Agents and to Utilize
Securities Depositories. Subject to the provisions hereinafter
set forth in this Section 7, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of
the Fund or to appoint from time to time Subcustodians.
The Custodian may deposit and/or maintain Property of the Fund
in any Securities Depository abroad provided such System meets
the requirements of an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations
thereunder or which by order of the Securities and Exchange
Commission is exempted therefrom. The Custodian may deposit
and/or maintain, either directly or through one or more agents
appointed by the Custodian, Property of the Fund in any
Securities Depository in the United States, including The
Depository Trust Company, provided such Depository meets
applicable requirements of the Federal Reserve Bank or of the
Securities and Exchange Commission. Notwithstanding anything in
this Agreement to the contrary, any Property held in a
Securities Depository, whether or not the Custodian is a direct
participant or member, will be held subject to the rules,
regulations, operating memoranda or other conditions of
participation in such System.
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 meeting
the requirements of a custodian under Section 17(f) of the 1940
Act and the rules and regulations thereunder, to act on behalf
of the Fund as a subcustodian for purposes of holding Property
of the Fund in the United States. Additionally, the Custodian
may, at any time and from time to time, appoint (i) any bank,
trust company or other entity meeting the requirements of an
"eligible foreign custodian" under Section 17(f) of the 1940 Act
and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii)
any bank as defined in Section 2(a)(5) of the 1940 Act meeting
the requirements of a custodian under Section 17(f) of the 1940
Act and the rules and regulations thereunder, to act on behalf
of the Fund as a subcustodian for purposes of holding Property
of the Fund outside the United States. Any bank appointed
pursuant to the foregoing provisions shall be a Subcustodian.
Prior to the appointment of any Subcustodian for purposes of
holding Property of a Fund outside the United States, the
Custodian shall have obtained written confirmation of the
approval of the Board of Directors of MSF with respect to (i)
the identity of a Subcustodian, (ii) the country or countries in
which, and the Securities Depositories, if any, through which,
any proposed Subcustodian is authorized to hold Property of the
Fund, and (iii) the subcustodian agreement which shall govern
such appointment. Each such duly approved Subcustodian and the
countries where and Securities Depositories through which they
may hold Property of the Customer shall be listed in an Appendix
(initially, Appendix C for the International Equity Fund,
Appendix D for the Asset Allocation Fund, Appendix E for the
Aggressive Growth Stock Fund, Appendix F for the Growth Stock
Fund, Appendix G for the Select Bond Fund and Appendix H for the
High Yield Bond Fund) attached hereto as the same may from time
to time be amended. The Custodian may, at any time in its
discretion, remove any Subcustodian that has been appointed as
such but will promptly notify the Fund of any such action.
The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be
held in a country in which no Subcustodian is authorized to act
in order that the Custodian shall have sufficient time to
establish a subcustodial arrangement in accordance herewith. In
the event, however, the Custodian is unable to establish such
arrangements prior to the time such investment is to be
acquired, the Custodian is authorized to designate at its
discretion a local safekeeping agent, and the use of such local
safekeeping agent shall be at the sole risk of the Fund, and
accordingly the Custodian shall be responsible to the Fund for
the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages
caused the Fund by such agent.
With respect to securities and funds held by a Subcustodian,
either directly or indirectly (including by a Securities
Depository or clearing agency), notwithstanding any provisions
of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to
receipt of securities or payment, respectively, and securities
or payment may be received in a form, in accordance with
governmental regulations, rules of securities depositories and
clearing agencies, or generally accepted trade practice in the
applicable local market.
In the event the Custodian receives a claim from a Subcustodian
under the indemnification provisions of any subcustodian
agreement, the Custodian shall promptly give written notice to
the Fund of such claim. No more than thirty days after written
notice to the Fund of the Custodian's intention to make such
payment, the Fund will reimburse the Custodian the amount of
such payment except in respect of any negligence or misconduct
of the Custodian.
8. Reporting; Records. The Custodian shall have and perform the
following duties with respect to recordkeeping.
8.1 Records - The Custodian shall create, maintain and
retain such records relating to its activities and obligations
under this Agreement as will enable the Custodian to comply with
its obligations hereunder and as are customarily maintained by a
professional custodian.
8.2 Access to Records - The books and records maintained by
the Custodian pursuant to this Section 8 shall at reasonable
times during the Custodian's regular business hours be open to
inspections and audit by the Auditors and by employees and
agents of the Fund provided that all such individuals shall
observe all security requirements of the Custodian applicable to
its own employees having access to similar records and such
rules as may be reasonably imposed by the Custodian.
8.3 Electronic Records and Communications - The Custodian may
make any of its records available to the Fund via electronic
reporting which may include without limitation on-line software
systems ("Electronic Reports"). The Fund understands that such
Electronic Reports may include data provided to the Custodian by
outside sources which may not have been independently verified
by the Custodian and is subject to change. Accordingly, the
Custodian shall not be liable for inaccuracies, errors or
incomplete information furnished by such sources.
The Custodian may also make available to the Fund certain
software to be used to initiate payment and securities transfer
instructions, affirm brokerage transactions reported through the
Institutional Delivery System or initiate other transaction
instructions for the Custodian's processing ("Electronic
Instructions").
The Fund agrees that it shall be responsible for protecting and
maintaining the confidentiality and security of any codes
assigned in respect of the Fund's access to such Electronic
Reports or Electronic Instructions and that any instructions
received through such system using the client code assigned to
the Fund shall be deemed to have originated from the Fund and to
be Proper Instructions.
The Custodian shall not be responsible for information added
to, changed or omitted by electronic programming malfunction,
unauthorized access or other failure of such systems unless such
actions are the direct result of the Custodian's negligence, bad
faith or willful malfeasance.
8.4 Review of Records - The Fund agrees to examine all records
howsoever produced or transmitted promptly upon receipt thereof
and to notify the Custodian promptly of any discrepancy or error
therein. Unless the Fund delivers written notice of any such
discrepancy or error to the Custodian within a reasonable period
of time after its receipt thereof, such records shall be deemed
true and accurate.
8.5 Appointment as Recordkeeping and Net Asset Value Calculation
Agent - The Custodian is hereby appointed recordkeeping and net
asset value calculation agent for the International Equity Fund
only, responsible for creating, maintaining and retaining such
records relating to its obligations under this Agreement as are
required under the 1940 Act (including Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder). All such records will be the
property of the Fund.
The Custodian shall compute and determine the net asset value
per share of the Fund as of the close of business on the New
York Stock Exchange on each day on which such Exchange is open,
unless otherwise directed by Proper Instructions. Such
computation and determination shall be made in accordance with
(1) the provisions of MSF's Certificate of Incorporation and
By-Laws, as they may from time to time be amended and delivered
to the Custodian, (2) the votes of the Board of Directors of the
Fund at the time in force and applicable, as they may from time
to time be delivered to the Custodian, and (3) Proper
Instructions. On each day that the Custodian shall compute the
net asset value per share of the Fund, the Custodian shall
provide the Fund with written reports which permit the Fund to
verify that portfolio transactions have been recorded in
accordance with the Fund's instructions and are reconciled with
the Fund's trading records.
In computing the net asset value, the Custodian may rely upon
any information furnished by Proper Instructions, including
without limitation any information (1) as to accrual of
liabilities of the Fund and as to liabilities of the Fund not
appearing on the books of account kept by the Custodian, (2) as
to the existence, status and proper treatment of reserves, if
any, authorized by the Fund, (3) as to the sources of quotations
to be used in computing the net asset value, including those
listed in Appendix B, (4) as to the fair value to be assigned to
any securities or other property for which price quotations are
not readily available, and (5) as to the sources of information
with respect to "corporate actions" affecting portfolio
securities of the Fund, including those listed in Appendix B.
(Information as to "corporate actions" shall include information
as to dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations,
mergers, redemptions, calls, maturity dates and similar
transactions, including the ex- and record dates and the amounts
or other terms thereof.)
In like manner, the Custodian shall compute and determine the
net asset value as of such other times as the Board of Directors
of the Fund from time to time may reasonably request.
Notwithstanding any other provisions of this Agreement,
including Section 10.1, the following provisions shall apply
with respect to the Custodian's foregoing responsibilities in
this Section 8.5: The Custodian shall be held to the exercise of
reasonable care in computing and determining net asset value as
provided in this Section 5.4, but shall not be held accountable
or liable for any losses, damages or expenses the Fund or any
shareholder or former shareholder of the Fund or any other
person may suffer or incur arising from or based upon errors or
delays in the determination of such net asset value unless such
error or delay was due to the Custodian's negligence or reckless
or willful misconduct in determination of such net asset value.
(The parties hereto acknowledge, however, that the Custodian's
causing an error or delay in the determination of net asset
value may, but does not in and of itself, constitute negligence
or reckless or willful misconduct.) In no event shall the
Custodian be liable or responsible to the Fund, any present or
former shareholder of the Fund or any other person for any error
or delay which continued or was undetected after the date of an
audit performed by the certified public accountants employed by
the Fund if, in the exercise of reasonable care in accordance
with generally accepted accounting standards, such accountants
should have become aware of such error or delay in the course of
performing such audit. The Custodian's liability for any such
negligence or reckless or willful misconduct which results in an
error in determination of such net asset value shall be limited
to the direct, out-of-pocket loss the Fund, shareholder or
former shareholder shall actually incur, measured by the
difference between the actual and the erroneously computed net
asset value, and any expenses the Fund shall incur in connection
with correcting the records of the Fund affected by such error
(including charges made by the Fund's registrar and transfer
agent for making such corrections) or communicating with
shareholders or former shareholders of the Fund affected by such
error.
Without limiting the foregoing, the Custodian shall not be held
accountable or liable to the Fund, any shareholder or former
shareholder thereof or any other person for any delays or
losses, damages or expenses any of them may suffer or incur
resulting from (1) the Custodian's failure to receive timely and
suitable notification concerning quotations or corporate actions
relating to or affecting portfolio securities of the Fund or (2)
any errors in the computation of the net asset value based upon
or arising out of quotations or information as to corporate
actions if received by the Custodian either (i) from a source
which the Custodian was authorized pursuant to the third
paragraph of this Section 8.5 to rely upon, or (ii) from a
source which in the Custodian's reasonable judgment was as
reliable a source for such quotations or information as the
sources authorized pursuant to that paragraph. Nevertheless,
the Custodian will use its best judgment in determining whether
to verify through other sources any information it has received
as to quotations or corporate actions if the Custodian has
reason to believe that any such information might be incorrect.
In the event of any error or delay in the determination of such
net asset value for which the Custodian may be liable, the Fund
and the Custodian will consult and make good faith efforts to
reach agreement on what actions should be taken in order to
mitigate any loss suffered by the Fund or its present or former
shareholders, in order that the Custodian's exposure to
liability shall be reduced to the extent possible after taking
into account all relevant factors and alternatives. Such
actions might include the Fund or the Custodian taking
reasonable steps to collect from any shareholder or former
shareholder who has received any overpayment upon redemption of
shares such overpaid amount or to collect from any shareholder
who has underpaid upon a purchase of shares the amount of such
underpayment or to reduce the number of shares issued to such
shareholder. It is understood that in attempting to reach
agreement on the actions to be taken or the amount of the loss
which should appropriately be borne by the Custodian, the Fund
and the Custodian will consider such relevant factors as the
amount of the loss involved, the Fund's desire to avoid loss of
shareholder good will, the fact that other persons or entities
could have been reasonably expected to have detected the error
sooner than the time it was actually discovered, the
appropriateness of limiting or eliminating the benefit which
shareholders or former shareholders might have obtained by
reason of the error, and the possibility that other parties
providing services to the Fund might be induced to absorb a
portion of the loss incurred.
9. Responsibility of Custodian. In carrying out the provisions
of this Agreement, the Custodian shall be held to the exercise
of reasonable care, provided that the Custodian shall not
thereby be required to take any action which is in contravention
of any law, rule or regulation or any order of any court of
competent jurisdiction. As used in this Agreement, "reasonable
care" shall mean the level of care which a professional
custodian providing custody services to institutional investors
would provide in light of the circumstances and events which
reasonably influence its performance in the market where the
securities are held or the transaction is effected, including
without limitation local market practices relating to securities
settlement and safekeeping, and "negligence" shall mean the
failure to exercise reasonable care as herein defined. The
Custodian shall, subject to the provisions set forth in Sections
9 and 10 hereof, be responsible to the Fund for any direct
losses, costs or expenses which the Fund incurs by reason of the
Custodian's negligence, bad faith or willful malfeasance.
With respect to securities and funds held by a Subcustodian,
either directly or indirectly (including by a Securities
Depository or foreign clearing agency), including demand and
interest bearing deposits, currencies or other deposits and
foreign exchange contracts as referred to herein, the Custodian
shall be liable to the Fund if and only to the extent that such
Subcustodian is liable to the Custodian and the Custodian
recovers under the applicable subcustodian agreement.
With respect to the securities, cash and other Property of the
Fund held by a Securities Depository utilized by the Custodian
or any Subcustodian or any agent of the Custodian, the Custodian
shall not be liable for the acts and omissions of such
Securities Depository, provided however that the Custodian
shall be liable to the Fund only for any direct loss or damage
to the Fund resulting from use of the Securities Depository if
caused by the negligence, bad faith or willful malfeasance of
the Custodian.
10. Limitations to Custodian's responsibility.
10.1 Liability in General - Except as otherwise provided in
this Agreement, the Custodian shall be responsible for loss or
damage which the Fund may incur by reason of the Custodian's
failure to meet the standard of care set forth herein, provided
always that such loss or damage shall be limited to direct
damages incurred by the Fund without taking into account special
circumstances, and provided further that the Custodian shall in
no event be liable for losses arising from indirect or
consequential damages or from loss of goodwill, even if the
Custodian has been advised of the likelihood of such loss or
damage and regardless of the form of action.
10.2 Liability of the Custodian with Respect to Proper
Instructions; Evidence of Authority; Etc. - The Custodian shall
not be liable for, and shall be indemnified by the Fund for
losses or damages incurred or assessed against the Custodian as
a result of, any action taken or omitted in reliance upon Proper
Instructions or upon any other written notice, request,
direction, instruction, certificate or other instrument believed
by it to be genuine.
The Custodian shall be entitled, at the expense of the Fund, to
receive and act upon advice of (a) its own counsel or counsel
which it selects, (b) counsel for the Fund, or (c) such other
counsel as the Fund and the Custodian may agree upon, with
respect to all matters. The Custodian shall be without liability
for any action taken or omitted pursuant to such advice.
10.3 Title to securities, fraudulent securities - 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 Agreement.
10.4 Force Majeure - Notwithstanding any other provision
contained herein, the Custodian shall not be liable for any
action taken, or for any failure to take any action required to
be taken hereunder or otherwise for its failure to fulfill its
obligations hereunder (including without limitation the failure
to receive or deliver securities or the failure to receive or
make any payment) in the event and to the extent that the taking
of such action or such failure arises out of or is caused by
civil commotion, act of God, accident, fire, water damage,
explosion, mechanical breakdown, computer or system failure or
other equipment failure, malfunction or failure caused by
computer virus, failure or malfunctioning of any communications
medium for whatever reason, interruption (whether partial or
total) of power supplies or other utility service, strike or
other stoppage (whether partial or total) of labor, market
conditions which prevent the orderly execution of securities
transactions or affect the value of Property, any law, decree,
regulation or order of any government or governmental body, de
facto or de jure (including any court or tribunal), or any other
cause whatsoever (whether similar or dissimilar to the
foregoing) beyond its control or the control of its
Subcustodian or other agent (collectively, "Force Majeure").
10.5 Sovereign Risk - Without limiting the generality of the
foregoing Section 10.4, the Custodian shall not be liable for
any losses resulting from a Sovereign Risk. As used herein, a
Sovereign Risk shall mean any loss, cost, delay or other effect
directly or indirectly arising from any acts of war, terrorism,
riot or insurrection; the imposition of exchange control
restrictions; confiscation, expropriation or nationalization of
any property including without limitation cash, cash
equivalents, securities or the assets of any issuer of
securities by any governmental or quasi-governmental authority
(including without limitation those authorities which are
judicial, legislative, executive, military or religious in
nature), whether de facto or de jure; or any other political
risk (whether similar or dissimilar to the foregoing) incurred
in respect of the country in which the issuer of such securities
is organized or in which such securities are held or such
payments are held or effected.
10.6 Foreign Currency Risks - The Fund bears all risks of
holding or transacting in any currency. Without limiting the
generality of the foregoing, the Fund bears all risks that rules
or procedures imposed by Securities Depositories, exchange
controls, asset freezes or other laws or regulations shall
prohibit or impose burdens on or costs relating to the transfer
of, by or for the account of the Fund securities, cash or
currency held outside the United States or denominated in a
currency other than U. S. dollars or on the conversion of any
currency so held. The Custodian shall in no event be obligated
to substitute another currency (including U.S. dollars) for a
currency whose transferability, convertibility or availability
has been affected by any such law, regulation, rule or procedure.
10.7 Investment Risks not assumed by Custodian - 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 commercial or other investment risks
inherent in investing in capital markets or of holding
securities in a particular jurisdiction or country including
without limitation: (i) political, legal, economic, settlement
and custody infrastructure, exchange rate and currency risks;
(ii) investment and repatriation restrictions; (iii) the Fund's
or Custodian's inability to protect and enforce any local legal
rights including rights of title and beneficial ownership; (iv)
corruption and crime in the local market; (v) unreliable
information which emanates from the local market; (vi)
volatility of banking and financial systems and infrastructure;
(vii) bankruptcy and insolvency risks of any and all local
banking agents, counterparties to cash and securities
transactions or registrars or transfer agents; and (viii) risk
of issuer insolvency or default.
10.8 Investment Limitations - In performing its duties
generally, and more particularly in connection with the
purchase, sale and exchange of securities made by or for the
Fund, the Custodian may assume unless and until notified in
writing to the contrary that Proper Instructions received by it
are not in conflict with or in any way contrary to any
provisions of MSF's Certificate of Incorporation or By-Laws or
votes or proceedings of the shareholders or Directors of the
Fund. The Custodian shall in no event be liable to the Fund and
shall be indemnified by the Fund for any violation which occurs
in the course of carrying out instructions given by the Fund or
any Investment Adviser of any investment limitations to which
the Fund is subject or other limitations with respect to the
Fund's powers to make expenditures, encumber securities, borrow
or take similar actions affecting the Fund.
10.9 Foreign Ownership Limitations - The Fund shall be
responsible for monitoring foreign ownership limitations in any
markets in which it invests.
10.10 Restricted Securities - The Custodian shall only be
responsible for notifying the Fund of any restrictions on the
transfer of securities held in the Securities Account of which
the Custodian is in fact aware. In no event shall the Custodian
be responsible for the inability of a Fund to sell or transfer
restricted securities if such inability is the result of the
terms of the security itself, actions of the issuer, its Board,
its Counsel or other representative (including without
limitation its registrar), or limitations due to laws,
regulations or other applicable rules. The Custodian shall only
be responsible for passing on information on those corporate
actions in respect of restricted securities which it in fact
receives.
10.11 Market Information - The Custodian may in its discretion
make market information available to the Fund. This service is
for informational purposes only and is not to be construed as a
recommendation to buy or sell a particular security, to invest
or not to invest in a particular country, or to take any action
whatsoever. Although information reported therein is believed to
be accurate, the Custodian cannot guarantee its accuracy or
completeness. The Fund accordingly acknowledges that the
Custodian provides market information on a best efforts basis
and recognizes its responsibility to consult with its own
independent sources before making any investment or other
decisions.
11. Advances and Security for Advances. In the event that the
Custodian is directed by Proper Instructions to make any payment
or transfer of funds from any BBH or Agency Account on behalf of
any Fund for which there would be, at the close of business on
the date of such payment or transfer, whether known at that time
or subsequently determined, insufficient funds held by the
Custodian or any Subcustodian, Securities Depository, or
otherwise on behalf of the Fund, or if the Custodian or any
nominee thereof shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with
the performance of this Agreement (collectively a "Liability"),
the Custodian may, in its discretion without further Proper
Instructions, provide or authorize an advance ("Advance") for
the account of the Fund in an amount sufficient to satisfy such
liability or to allow the completion of the transaction by
reason of which such payment or transfer of funds is to be made.
Any Advance shall be payable on demand made by the Custodian,
unless otherwise agreed by the Fund and the Custodian, and shall
accrue interest from the date of the Advance to the date of
payment by the Fund at a rate agreed upon from time to time by
the Custodian and the Fund or otherwise at the rate the
Custodian customarily charges on loans to customers. It is
understood that any transaction in respect of which the
Custodian shall have made an Advance, including but not limited
to a foreign exchange contract or transaction in respect of
which the Custodian is not acting as a principal, is for the
account of and at the risk of the Fund, and not, by reason of
such Advance, deemed to be a transaction undertaken by the
Custodian for its own account and risk. If the Custodian shall
make or authorize any Advance to the Fund, then in such event
any property at any time held for the account of the Fund by the
Custodian, a Subcustodian, a Securities Depository or otherwise
("Collateral") shall be security for such Liability or for such
Advance and the interest thereon, and if the Fund shall fail to
pay such Advance or interest when due or shall fail to reimburse
or indemnify the Custodian promptly in respect of a Liability,
the Custodian shall be entitled to utilize available cash and to
dispose of the Fund's property, including securities and
balances in any BBH or Agency Account, to the extent necessary
(which shall include the right to sell or assign securities or
otherwise assign its security interest to third parties) to
obtain repayment, reimbursement or indemnification.
For purposes of this Section 11, all such Collateral shall be
treated as investment securities pursuant to revised Articles 8
and 9 of the Uniform Commercial Code, whether such Articles have
in fact been adopted in the jurisdiction in which the securities
are held or the Advance is granted. Accordingly, with respect to
any Collateral, the Custodian shall have the rights and benefits
of a secured creditor and of a securities intermediary under the
Uniform Commercial Code as heretofore revised.
Deposits maintained in Agency Accounts and BBH Accounts
(including all accounts denominated in any currency) shall
collectively constitute a single and indivisible current account
with respect to the Fund's obligations to the Custodian or
Subcustodian hereunder. Accordingly, balances in all such Agency
and BBH Accounts shall at all times be available for
satisfaction of the Fund's obligations under this Agreement to
the Custodian or any of its Subcustodians or agents including
without limitation any Advances incurred pursuant to this
Section.
12. Compensation. The Fund shall pay the Custodian a custody fee
based on such fee schedule as may from time to time be agreed
upon in writing by the Custodian and the Fund. Such fee,
together with all out-of-pocket expenses for which the Custodian
is to be reimbursed, shall be billed to the Fund and be paid by
cash or wire transfer to the Custodian.
13. Termination. This Agreement shall continue in full force and
effect until 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 sixty
(60) days after the date of such delivery or mailing. In the
event of termination the Custodian shall be entitled to receive
prior to delivery of the securities, funds and other Property
held by it all accrued fees and unreimbursed expenses and all
Advances and Liabilities, upon receipt by the Fund of a
statement setting forth such fees, expenses, Advances and
Liabilities.
In the event of the appointment of a successor custodian, it is
agreed that the funds and securities owned by the Fund and held
by the Custodian or any Subcustodian shall be delivered to the
successor custodian, and the Custodian agrees to cooperate with
the Fund in execution of documents and performance of other
actions necessary or desirable in order to substitute the
successor custodian for the Custodian under this Agreement.
14. Miscellaneous. The following miscellaneous provisions shall
govern the relationship between the parties --
14.1. 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 to the Fund
under this Agreement or any applicable subcustodian agreement
with respect to the Fund.
(b) Actions by Custodian - Upon receipt of Proper
Instructions, the Custodian shall execute and deliver to the
trustee 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.
14.2. Entire Agreement - This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and
the Custodian, on the other, with respect to the subject matter
hereof and accordingly, supersedes as of the effective date of
this Agreement any custodian agreement or other oral or written
agreements heretofore in effect between the Fund and the
Custodian with respect to custody of the Fund's Property.
14.3. Waivers and Amendments - No provision of this Agreement
may be waived, amended or terminated except by a statement in
writing signed by the party against which enforcement of such
waiver, amendment or termination is sought; provided however any
appendix or addendum to this Agreement may be added or amended
from time to time by the Fund's execution and delivery to the
Custodian of such appendix or addendum, in which case the terms
thereof shall take effect immediately upon execution by the
Custodian or otherwise as set forth in this Agreement.
14.4. 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 with respect to the
Fund as may 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.
14.5. 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.
14.6. Governing Law - The provisions of this Agreement shall
be construed in accordance with and governed by the laws of the
State of New York without giving effect to principles of
conflicts of law. The parties hereto irrevocably consent to the
exclusive jurisdiction of the courts of the State of New York
located in New York City in the borough of Manhattan.
14.7 Notices - Except in the case of Proper Instructions,
notices and other writings contemplated by this Agreement shall
be delivered by hand or by facsimile transmission (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:
[Fund Name]
Xxxxx Street Funds, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Investment Accounting
(b) If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Manager, Securities Department
Telephone (000) 000-0000
Telefax: (000) 000-0000
or to such other address as the Fund or the Custodian may have
designated in writing to the other.
14.8. Assignment - This Agreement shall be binding on and
shall inure to the benefit of each Fund severally and the
Custodian and their respective successors and assigns, provided
that neither the Custodian nor the Fund may assign this
Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party.
14.9. Counterparts - This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original. With respect to the Fund, this Agreement shall become
effective when one or more counterparts have been signed and
delivered by MSF and the Custodian.
14.10. 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 Subcustodian, any
auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation. The
provisions of this Agreement 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.
XXXXX STREET FUNDS, INC. XXXXX BROTHERS XXXXXXXX & CO.
By By
----------------------------- --------------------------------
Name: Name:
Title: Title:
APPENDIX A
to the
CUSTODIAN AGREEMENT
between
XXXXX STREET FUNDS, INC.
and
XXXXX BROTHERS XXXXXXXX & CO.
The Custodian Agreement dated ________________ between Xxxxx
Street Funds, Inc. and Xxxxx Brothers Xxxxxxxx & Co. shall
henceforward have effect in respect of the following Funds:
International Equity Fund
Asset Allocation Fund
Aggressive Growth Stock Fund
Growth Stock Fund
High Yield Bond Fund
Select Bond Fund
XXXXX STREET FUNDS, INC.
By
--------------------------------------
Name:
Title:
Date:
APPENDIX B
to the
CUSTODIAN AGREEMENT
between
XXXXX STREET FUNDS, INC.
and
XXXXX BROTHERS XXXXXXXX & CO.
The following authorized sources are to be used for pricing and
foreign exchange quotations, corporate actions, dividends and
rights offerings:
AUTHORIZED SOURCES
Bloomberg
Extel (London)
Fund Managers or Investment Advisers
Interactive Data Corporation
Reputable Brokers
Reuters
Subcustodian Banks
Telekurs
Valorinform (Geneva)
Reputable Financial Publications
Stock Exchanges
Financial Information Inc. CARD
JJ Xxxxx
XXXXX STREET FUNDS, INC.
By
---------------------------
Name:
Title:
Date:
