EX-99.B(g)dica
CUSTODIAN AGREEMENT
Dated as of May 21, 2003
Between
UMB BANK, n.a.
and
XXXXXXX & XXXX ADVISORS SELECT FUNDS, INC.
DIVIDEND INCOME FUND
Table of Contents
ARTICLE
I. Appointment of Custodian
II. Powers and Duties of Custodian
2.01 Safekeeping
2.02 Manner of Holding Securities
2.03 Purchase of Assets
2.04 Exchanges of Securities
2.05 Sales of Securities
2.06 Depositary Receipts
2.07 Exercise of Rights, Tender Offers, Etc.
2.08 Stock Dividends, Rights, Etc.
2.09 Options
2.10 Futures Contracts
2.11 Borrowing
2.12 Interest Bearing Deposits
2.13 Foreign Exchange Transactions
2.14 Securities Loans
2.15 Collections
2.16 Dividends, Distributions and Redemptions
2.17 Proceeds from Shares Sold
2.18 Proxies, Notices, Etc.
2.19 Bills and Other Disbursements
2.20 Nondiscretionary Functions
2.21 Bank Accounts
2.22 Deposit of Fund Assets in Securities System
2.23 Other Transfers
2.24 Establishment of Segregated Account
2.25 Custodian's Books and Records
2.26 Opinion of Fund's Independent Certified Public Accountants
2.27 Reports by Independent Certified Public Accountants
2.28 Overdraft Facility
III. Proper Instructions, Special Instructions and Related Matters
3.01 Proper Instructions and Special Instructions
3.02 Authorized Persons
3.03 Persons Having Access to Assets of the Portfolios
3.04 Actions of Custodian Based on Proper Instructions and Special
Instructions
IV. Subcustodians
4.01 Domestic Subcustodians
4.02 Foreign Sub-Subcustodians and Interim Sub-Subcustodians
4.03 Special Subcustodians
4.04 Termination of a Subcustodian
4.05 Certification Regarding Foreign Sub-Subcustodians
4.06 Securities Depositories
4.07
V. Standard of Care, Indemnification
5.01 Standard of Care
5.02 Liability of the Custodian for Actions of Other Persons
5.03 Indemnification by Fund
5.04 Investment Limitations
5.05 Fund's Right to Proceed
5.06 Indemnification by Custodian
5.07 Custodian's Right to Proceed
VI. Compensation
VII. Termination
VIII. Defined Terms
IX. Miscellaneous
9.01 Execution of Documents, Etc.
9.02 Representations and Warranties
9.03 Entire Agreement
9.04 Waivers and Amendments
9.05 Interpretation
9.06 Captions
9.07 Governing Law
9.08 Notices
9.09 Assignment
9.10 Counterparts
9.11 Confidentiality; Survival of Obligations
Appendix A
CUSTODIAN AGREEMENT
AGREEMENT made as of the 21st day of May, 2003 between Xxxxxxx & Xxxx
Adivsors Select Funds, Inc., on behalf of its Dividend Income Fund (the
"Fund"), as may be amended from time to time, and UMB Bank, n.a. (the
"Custodian").
WITNESSETH
WHEREAS, the Fund desires to appoint the Custodian as custodian on
behalf of the Fund in accordance with the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act") and the rules and
regulations thereunder, under the terms and conditions set forth in this
Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
Subject to the terms and provisions of this Agreement, the Fund hereby
employs and appoints the Custodian as a custodian of the cash, securities
and other assets owned by the Fund and deposited from time to time with the
Custodian ("Assets"). The Fund shall deliver to the Custodian, or shall
cause to be delivered to the Custodian, Assets during the term of this
Agreement. The Custodian is authorized to act under the terms and
conditions of this Agreement as the Fund's agent and shall be representing
the Fund when acting within the scope of this Agreement. The Custodian
hereby accepts such appointment as custodian and shall perform the duties
and responsibilities set forth herein on the terms and conditions set forth
herein.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties set forth in this Article II. Pursuant to and in accordance with
Article IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall accept delivery of
and keep safely the Assets in accordance with the terms and conditions
hereof on behalf of the Fund.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of the Fund
either: (i) by physical possession of the share certificates or other
instruments representing such securities in registered or bearer form; or
(ii) in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of Section 2.22 below.
(b) The Custodian may at all times hold registered securities of the
Fund in the name of the Fund or the Fund's nominee, or in the nominee name
of the Custodian unless specifically directed by Proper Instructions (as
hereinafter defined) to hold such registered securities in so-called street
name; provided that, in any event, all Assets shall be held in an account
of the Custodian containing only assets of the Fund. Notwithstanding the
foregoing, unless it receives Proper Instructions to the contrary, the
Custodian shall register all securities in the name of the Custodian's
nominee as authorized by the Fund. All securities held directly or
indirectly by the Custodian hereunder shall at all times be identifiable on
the records of the Custodian. Except as otherwise provided herein, the
Custodian shall keep the Assets physically segregated from those of other
persons or entities. The Custodian shall execute and deliver all
certificates and documents in connection with registration of securities as
may be required by the applicable provisions of the Internal Revenue Code,
the laws of any State or territory of the United States and the laws of any
jurisdiction in which the securities are held.
Section 2.03. Purchase of Assets.
(a) Security Purchases. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive securities purchased for the account of
the Fund, provided that payment shall be made by Custodian only upon
receipt of the securities: (a) by the Custodian; (b) by a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) by a Securities System. Notwithstanding the foregoing, upon
receipt of Proper Instructions: (i) in the case of a repurchase agreement,
the Custodian may release funds to a Securities System prior to the receipt
of advice from the Securities System that the securities underlying such
repurchase agreement have been transferred by book-entry into the Account
(as hereinafter defined) maintained with such Securities System by the
Custodian, provided that the Custodian's instructions to the Securities
System require that the Securities System may make payment of such funds to
the other party to the repurchase agreement only upon transfer by book-
entry of the securities underlying the repurchase agreement into the
Account; (ii) in the case of time deposits, call account deposits, currency
deposits and other deposits, foreign exchange transactions, futures
contracts or options, pursuant to Sections 2.09, 2.10, 2.12 and 2.13
hereof, the Custodian may make payment therefor before receipt of an advice
or transaction; and (iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of America, the
Custodian may make payment therefor and receive delivery of such securities
in accordance with local custom and practice generally accepted by
Institutional Clients (as hereinafter defined) in the country in which the
settlement occurs, but in all events subject to the standard of care set
forth in Article V hereof. For purposes of this Agreement, an
"Institutional Client" shall mean a major commercial bank, corporation,
insurance company, or substantially similar institution, which, as a
substantial part of its business operations, purchases or sells securities
and makes use of custodial services.
(b) Other Asset Purchases. Upon receipt of Proper Instructions and
except as otherwise provided herein, the Custodian shall pay for and
receive other Assets for the account of the Fund as provided in Proper
Instructions.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of the Fund for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities for transfer
into the name of the Fund, the Fund's nominee or the nominee name of the
Custodian as permitted by Section 2.02(b); and surrender securities for a
different number of certificates or instruments representing the same
number of shares or same principal amount of indebtedness, provided that
the securities to be issued will be delivered to the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper
Instructions, the Custodian shall make delivery of securities which have
been sold for the account of the Fund, but only against payment therefor in
the form of: (a) cash, certified check, bank cashier's check, bank credit,
or bank wire transfer; (b) credit to the account of the Custodian with a
clearing corporation of a national securities exchange of which the
Custodian is a member; or (c) credit to the Account of the Custodian with a
Securities System, in accordance with the provisions of Section 2.22
hereof. Notwithstanding the foregoing: (i) in the case of the sale of
securities, the settlement of which occurs outside of the United States of
America, such securities shall be delivered and paid for in accordance with
local custom and practice generally accepted by Institutional Clients in
the country in which the settlement occurs, but in all events subject to
the standard of care set forth in Article V hereof; and (ii) in the case of
securities held in physical form, such securities shall be delivered and
paid for in accordance with "street delivery custom" to a broker or its
clearing agent, against delivery to the Custodian of a receipt for such
securities, provided that the Custodian shall have taken reasonable steps
to ensure prompt collection of the payment for, or return of, such
securities by the broker or its clearing agent, and provided further that,
subject to the standard of care set forth in Article V hereof, the
Custodian shall not be responsible for the selection of or the failure or
inability to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper
Instructions, the Custodian shall surrender securities to the depositary
used for such securities by an issuer of American Depositary Receipts or
International Depositary Receipts (hereinafter referred to, collectively ,
as "ADRs"), against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Custodian that the
depositary has acknowledged receipt of instructions to issue ADRs with
respect to such securities in the name of the Custodian or a nominee of the
Custodian, for delivery to the Custodian at such place as the Custodian may
from time to time designate. Upon receipt of Proper Instructions, the
Custodian shall surrender ADRs to the issuer thereof, against a written
receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights, Tender Offers, Etc. Upon receipt
of Proper Instructions, the Custodian shall: (a) deliver warrants, puts,
calls, rights or similar securities to the issuer or trustee thereof (or to
the agent of such issuer or trustee) for the purpose of exercise or sale,
provided that the new securities, cash or other Assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall promptly notify the Fund in writing of (i) any default in
payment of funds on securities; (ii) any securities that have matured, been
called or redeemed; and (iii) to the extent the Custodian has notice which
is contained in services to which it normally subscribes for such purposes,
or actual knowledge if not contained in such services, any other default
involving securities; and all announcements of defaults, bankruptcies,
reorganizations, mergers, consolidations, recapitalizations or rights or
privileges to subscribe, convert, exchange, put, redeem or tender
securities held subject to this Agreement. The Custodian shall, following
receipt or knowledge, convey such information to the Fund in a timely
manner based upon the circumstances of each particular case. Whenever any
such rights or privileges exist, the Fund will, in a timely manner based
upon the circumstances of each particular case, provide the Custodian with
Proper Instructions. Absent the Custodian's timely receipt of Proper
Instructions, the Custodian shall not be liable for not taking any action
or not exercising such rights prior to their expiration unless such failure
is due to Custodian's failure to give timely notice to the Fund in
accordance with this Section 2.07.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall
receive and collect all stock dividends, rights and other items of like
nature and, upon receipt of Proper Instructions, take action with respect
to the same as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund relating to compliance
with the rules of the Options Clearing Corporation (the "OCC") or of any
registered national securities exchange or similar organization(s), the
Custodian shall: (a) receive and retain confirmations or other documents,
if any, evidencing the purchase or writing of an option by the Fund; (b)
deposit and maintain in a segregated account, securities (either physically
or by book-entry in a Securities System), cash or other Assets; and (c)
pay, release and/or transfer such securities, cash or other Assets in
accordance with any such agreement and with notices or other communications
evidencing the expiration, termination or exercise of such options
furnished by the OCC, the securities or options exchange on which such
options are traded or such other organization as may be responsible for
handling such option transactions. The Fund and the broker-dealer shall be
responsible for determining the sufficiency of assets held in any
segregated account established in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract; provided, however, that the Custodian shall be liable for
performance of its duties under this Agreement and in accordance with
Proper Instructions, and shall be liable for performance of its duties
under any other agreement between the Custodian, any registered broker-
dealer and, if necessary, the Fund. Notwithstanding anything herein to the
contrary, if the Fund issues Proper Instructions to sell a naked option
(including stock index options), then as part of the transaction, the
Custodian, the Fund and the broker-dealer shall have entered into a tri-
party agreement, as described above.
Section 2.10. Futures Contracts. Upon receipt of Proper
Instructions, or pursuant to the provisions of any futures margin
procedural agreement among the Fund, the Custodian and any futures
commission merchant (a "Procedural Agreement"), the Custodian shall: (a)
receive and retain confirmations, if any evidencing the purchase of or sale
of a futures contract or an option on a futures contract by the Fund; (b)
deposit and maintain in a segregated account cash, securities and other
Assets designated as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of its obligations under any
futures contracts purchased or sold or any options on futures contracts
written by the Fund, in accordance with the provisions of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or transfer
assets into such margin accounts only in accordance with any such
Procedural Agreements. The Fund and such futures commission merchant shall
be responsible for determining the sufficiency of assets held in the
segregated account in compliance with applicable margin maintenance
requirements and the performance of any futures contract or option on a
futures contract in accordance with its terms; provided, however, that the
Custodian shall be liable for performance of its duties under this
Agreement and in accordance with Proper Instructions, and shall be liable
for performance of its duties under any Procedural Agreement.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of the Fund to lenders or their agents,
or otherwise establish a segregated account as agreed to by the Fund and
the Custodian, as collateral for borrowings effected by the Fund, provided
that such borrowed money is payable by the lender (a) to or upon the
Custodian's order, as Custodian for the Fund, and (b) concurrently with
delivery of such securities.
Section 2.12. Interest Bearing Deposits. Upon receipt of Proper
Instructions directing the Custodian to purchase interest bearing fixed
term and call deposits (hereinafter referred to collectively, as "Interest
Bearing Deposits") for the account of the Fund, the Custodian shall
purchase such Interest Bearing Deposits in the name of the Fund with such
banks or trust companies (including the Custodian, any Subcustodian or any
subsidiary or affiliate of the Custodian) (hereinafter referred to as
"Banking Institutions") and in such amounts as the Fund may direct
pursuant to Proper Instructions. Such Interest Bearing Deposits may be
denominated in U.S. Dollars or other currencies, as the Fund may determine
and direct pursuant to Proper Instructions. The Custodian shall include in
its records with respect to the Assets of the Fund appropriate notation as
to the amount and currency of each such Interest Bearing Deposit, the
accepting Banking Institution and all other appropriate details, and shall
retain such forms of advice or receipt evidencing such account, if any, as
may be forwarded to the Custodian by the Banking Institution. The
responsibilities of the Custodian to the Fund for Interest Bearing Deposits
accepted on the Custodian's books in the United States shall be that of a
U.S. bank for a similar deposit. With respect to Interest Bearing Deposits
other than those accepted on the Custodian's books, (a) the Custodian shall
be responsible for the collection of income as set forth in Section 2.15
and the transmission of cash and instructions to and from such accounts;
and (b) the Custodian shall have no duty with respect to the selection of
the Banking Institution or, so long as the Custodian acts in accordance
with Proper Instructions and the terms and conditions of this Agreement,
for the failure of such Banking Institution to pay upon demand. Upon
receipt of Proper Instructions, the Custodian shall take such reasonable
actions as the Fund deems necessary or appropriate to cause each such
Interest Bearing Deposit account to be insured to the maximum extent
possible by all applicable deposit insurers including, without limitation,
the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions.
(a) Foreign Exchange Transactions Other than as Principal. Upon
receipt of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of the Fund with such
currency brokers or Banking Institutions as the Fund may determine and
direct pursuant to Proper Instructions. The Fund accepts full
responsibility for its use of third party foreign exchange brokers (any
dealer other than the Foreign Subcustodian) (as hereinafter defined) and
for execution of said foreign exchange contracts and understands that the
Fund shall be responsible for any and all costs and interest charges which
may be incurred as a result of the failure or delay of its third party
broker to deliver foreign exchange unless such loss, damage, or expense is
caused by, or results from the negligence, misfeasance or misconduct of the
Custodian. Notwithstanding the foregoing, the Custodian shall be
responsible for the transmission of cash and instructions to and from the
currency broker or Banking Institution with which the contract or option is
made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions and
the maintenance of proper records as set forth in Section 2.25. The
Custodian shall have no duty with respect to the selection of the currency
brokers or Banking Institutions with which the Fund deals or, so long as
the Custodian acts in accordance with Proper Instructions, for the failure
of such brokers or Banking Institutions to comply with the terms of any
contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not
be obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign currencies for spot
and future delivery on behalf of and for the account of the Fund with the
Custodian as principal. The Custodian shall be responsible for the
selection of the currency brokers or Banking Institutions and the failure
of such currency brokers or Banking Institutions to comply with the terms
of any contract or option.
(c) Payments. Notwithstanding anything to the contrary contained
herein, upon receipt of Proper Instructions the Custodian may, in
connection with a foreign exchange contract, make free outgoing payments of
cash in the form of U.S. Dollars or foreign currency prior to receipt of
confirmation of such foreign exchange contract or confirmation that the
countervalue currency completing such contract has been delivered or
received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions,
the Custodian shall, in connection with loans of securities by the Fund,
deliver securities of the Fund to the borrower thereof and may, except as
otherwise provided below, deliver such securities prior to receipt of the
collateral, if any, for such borrowing; provided that, in cases of loans of
securities secured by cash collateral, the Custodian's instructions to the
Securities System shall require that the Securities System deliver the
securities of the Fund to the borrower thereof only upon receipt of the
collateral for such borrowing. The Custodian shall retain on the Fund's
behalf the right to any dividends, interest or distribution on such loaned
securities and any other rights specified in Proper Instructions. Upon
receipt of Proper Instructions and the loaned securities, the Custodian
will release the collateral to the borrower.
Section 2.15. Collections. The Custodian shall: (a) collect amounts
due and payable to the Fund with respect to portfolio securities and other
Assets; (b) promptly credit to the account of the Fund all income and other
payments relating to portfolio securities and other Assets held by the
Custodian hereunder upon Custodian's receipt of such income or payments or
as otherwise agreed in writing by the Custodian and the Fund; (c) promptly
endorse and deliver any instruments required to effect such collection; and
(d) promptly execute ownership and other certificates and affidavits for
all federal, state, local and foreign tax purposes in connection with
receipt of income or other payments with respect to portfolio securities
and other Assets, or in connection with the transfer of such securities or
other Assets; provided, however, that with respect to portfolio securities
registered in so-called street name, or physical securities with variable
interest rates, the Custodian shall use its best efforts to collect amounts
due and payable to the Fund. The Custodian shall promptly notify the Fund
in writing by facsimile transmission or in such other manner as the Fund
and Custodian may agree in writing if any amount payable with respect to
portfolio securities or other Assets is not received by the Custodian when
due. The Custodian shall not be responsible for the collection of amounts
due and payable with respect to portfolio securities or other Assets that
are in default.
Section 2.16. Dividends, Distributions and Redemptions. To enable
the Fund to pay dividends or other distributions to shareholders of the
Fund and to make payment to shareholders who have requested repurchase or
redemption of their shares of the Fund (collectively, the "Shares"), the
Custodian shall promptly release cash or securities (a) in the case of
cash, upon receipt of Proper Instructions, to one or more Distribution
Accounts (as hereinafter defined) designated by the Fund in such Proper
Instructions; or (b) in the case of securities, upon the receipt of Special
Instructions (as hereinafter defined) to such entity or account designated
by the Fund in such Special Instructions. For purposes of this Agreement, a
"Distribution Account" shall mean an account established at a Banking
Institution designated by the Fund in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Fund, and shall promptly credit such funds to the
account of the Fund. The Custodian shall promptly notify the Fund of
Custodian's receipt of cash in payment for Shares issued by the Fund by
facsimile transmission or in such other manner as the Fund and Custodian
may agree in writing. Upon receipt of Proper Instructions, the Custodian
shall: (a) deliver all federal funds received by the Custodian in payment
for Shares in payment for such investments as may be set forth in such
Proper Instructions and at a time agreed upon between the Custodian and the
Fund; and (b) make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to the
accounts of the Fund.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver or
cause to be delivered to the Fund, in the most expeditious manner
practicable, all forms of proxies, all notices of meetings, and any other
notices or announcements affecting or relating to securities owned by the
Fund that are received by the Custodian, any Subcustodian, or any nominee
of either of them, and, upon receipt of Proper Instructions, the Custodian
shall execute and deliver, or cause such Subcustodian or nominee to execute
and deliver, such proxies or other authorizations as may be required.
Except as directed pursuant to Proper Instructions, neither the Custodian
nor any Subcustodian or nominee shall vote upon any such securities, or
execute any proxy to vote thereon, or give any consent or take any other
action with respect thereto. The Custodian will not release the identity of
the Fund to an issuer which requests such information pursuant to the
Shareholder Communications Act of 1985, for the specific purpose of direct
communications between such issuer and the Fund unless the Fund directs the
Custodian otherwise in writing.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of the Fund.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend
to all nondiscretionary details not specifically covered by this Agreement
in accordance with industry standards in connection with the sale,
exchange, substitution, purchase, transfer or other dealings with
securities or other Assets held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts.
(a) Accounts with the Custodian. The Custodian shall open and operate
a bank account or accounts (hereinafter referred to collectively, as "Bank
Accounts") on the books of the Custodian; provided that such Bank
Account(s) shall be in the name of the Custodian or a nominee thereof, for
the account of the Fund, and shall be subject only to draft or order of the
Custodian. The responsibilities of the Custodian to the Fund for deposits
accepted on the Custodian's books shall be that of a U.S. bank for a
similar deposit.
(b) Deposit Insurance. Upon receipt of Proper Instructions, the
Custodian shall take such action as the Fund deems necessary or appropriate
to cause each deposit account established by the Custodian pursuant to this
Section 2.21 to be insured to the maximum extent possible by all applicable
deposit insurers, including, without limitation, the Federal Deposit
Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by the Fund
in: (a) The Depository Trust Company; (b) the Participants Trust Company;
(c) any book-entry system as provided in (i) Subpart O of Treasury Circular
Xx. 000, 00 XXX 306.115 (ii) Subpart B of Treasury Circular Public Debt
Series Xx. 00-00, 00 XXX 350.2, or (iii) the book-entry regulations of
federal agencies substantially in the form of 31 CFR 306.115; or (d) any
other domestic clearing agency registered with the Securities and Exchange
Commission ("SEC") under Section 17A of the Securities Exchange Act of 1934
(or as may otherwise be authorized by the Securities and Exchange
Commission to serve in the capacity of depository or clearing agent for the
securities or other assets of investment companies) which acts as a
securities depository; provided, however, that no such deposit or
maintenance of securities may be made except with respect to those agencies
and entities the use of which the Fund has previously approved by Special
Instructions (each of the foregoing being referred to in this Agreement as
a "Securities System"). Use of a Securities System shall be in accordance
with applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(A) The Custodian or any Subcustodian may deposit and/or maintain
securities held hereunder in a Securities System, provided that such
securities are represented in an account ("Account") of the Custodian in
the Securities System which Account shall not contain any assets of the
Custodian other than assets held as fiduciary, custodian or otherwise for
customers.
(B) The books and records of the Custodian shall at all times identify
those securities belonging to the Fund which are maintained in a Securities
System.
(C) The Custodian shall pay for securities purchased for the account
of the Fund only upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(ii) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon (iii)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (iv)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all advices
from the Securities System relating to transfers of securities for the
account of the Fund shall identify the Fund, and shall be maintained for
the Fund by the Custodian. The Custodian shall deliver to the Fund on the
next succeeding business day daily transaction reports which shall include
each day's transactions in the Securities System for the account of the
Fund. Such transaction reports shall be delivered to the Fund or any agent
designated by the Fund pursuant to Proper Instructions, by computer or in
such other manner as the Fund and Custodian may agree in writing.
(D) The Custodian shall, if requested by the Fund pursuant to Proper
Instructions, provide the Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(E) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System (except the federal book-entry
system) on behalf of the Fund as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of the Fund
maintained with such Securities System.
Section 2.23. Other Transfers. Upon receipt of Special Instructions,
the Custodian shall make such other dispositions of securities, funds, or
other Assets of the Fund in a manner or for purposes other than as
expressly set forth in this Agreement, provided that the Special
Instructions relating to such disposition shall include a statement of the
purposes for which the delivery is to be made, the amount of funds, Assets
and/or securities to be delivered and the name of the person or persons to
whom delivery is to be made, and shall otherwise comply with the provisions
of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or securities or
other Assets of the Fund, including securities maintained by the Custodian
in a Securities System pursuant to Section 2.22 hereof, said account or
accounts to be maintained: (a) for the purposes set forth in Section 2.09,
2.10 and 2.11 hereof; (b) for the purposes of compliance by the Fund with
the procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies; or (c) for such
other purposes as may be set forth, from time to time, in Special
Instructions. The Custodian shall not be responsible for the determination
of the type or amount of Assets to be held in any segregated account
referred to in this Section 2.24.
Section 2.25. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by the Fund in the preparation
of reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other Assets held for
the accounts of the Fund as required by the rules and regulations of the
SEC applicable to investment companies registered under the 1940 Act,
including, but not limited to: (a) journals or other records of original
entry containing a detailed and itemized daily record of all receipts and
deliveries of securities (including certificate and transaction
identification numbers, if any), and all receipts and disbursements of
cash; (b) ledgers or other records reflecting (i) securities in transfer,
(ii) securities in physical possession, (iii) securities borrowed, loaned
or collateralizing obligations of the Fund, (iv) monies borrowed and monies
loaned (together with a record of the collateral therefor and substitutions
of such collateral), and (v) dividends and interest received; and (c)
cancelled checks and bank records relating thereto. The Custodian shall
keep such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the
rules and regulations of the SEC, including, but not limited to, books and
records required to be maintained by Section 31(a) of the 1940 Act and the
rules and regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be the property of the Fund and shall be available during normal
business hours for inspection and use by the Fund and its agents, including
without limitation, its independent certified public accountants.
Notwithstanding the preceding sentence, the Funds shall not take any
actions or cause the Custodian to take any actions which would knowingly
cause, either directly or indirectly, the Custodian to violate any
applicable laws, regulations or orders. Notwithstanding the provisions of
this Section 2.25, in the event the Fund purchases cash, securities and
other Assets requiring the use of a Domestic Subcustodian or Foreign Sub-
Subcustodian, the Custodian shall be entitled to rely upon and use the
books, records and accountings of the Domestic Subcustodian as its means of
accounting to the Fund for all cash, securities and other Assets deposited
with such entities; provided however, that such books, records and
accountings on which the Bank may rely must be maintained in the United
States by such Domestic Subcustodian and, provided further, that any
agreement between the Custodian and such Domestic Subcustodian must state
that the Domestic Subcustodian agrees to make any records available upon
request and preserve, for the periods described in Rule 31a-2 of the 1940
Act, the records required to be maintained by Rule 31a-1 of the 1940 Act.
In no event shall the Custodian be entitled to rely upon and use books,
records and accountings which are maintained outside of the United States.
Section 2.26. Opinion of Fund's Independent Certified Public
Accountants. The Custodian shall take all reasonable action as the Fund may
request to obtain from year to year favorable opinions from the Fund's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Fund's Form
N-1A and the Fund's Form N-SAR or other periodic reports to the SEC and
with respect to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants.
At the request of the Fund, the Custodian shall deliver to the Fund a
written report prepared by the Custodian's independent certified public
accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of the Fund for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of the Fund, the Custodian may, in its sole discretion,
provide an overdraft (an "Overdraft") to the Fund in an amount sufficient
to allow the completion of such payment. Any Overdraft provided hereunder:
(a) shall be payable on the next business day, unless otherwise agreed by
the Fund and the Custodian; and (b) shall accrue interest from the date of
the Overdraft to the date of payment in full by the Fund at a rate agreed
upon in writing, from time to time, by the Custodian and the Fund. The
purpose of such Overdrafts is to temporarily finance extraordinary or
emergency expenses not reasonably foreseeable by the Fund. The Custodian
shall promptly notify the Fund in writing ("Overdraft Notice") of any
Overdraft by facsimile transmission or in such other manner as the Fund and
the Custodian may agree in writing. The Custodian shall have a right of
set-off against all Assets (except for Assets held in a segregated margin
account or otherwise pledged in connection with options or futures
contracts held for the benefit of the Fund and for Assets allocated to any
other Overdraft or loan made hereunder); provided, however, the Custodian
shall promptly notify the Fund in writing of any intent to exercise a right
of set-off against Assets hereunder and shall not exercise any such right
of set-off against Assets hereunder unless and until the Fund has failed to
pay (within ten (10) days after the Fund's receipt of such notice of intent
to exercise a right of set-off), any Overdraft, together with all accrued
interest thereon. Notwithstanding the provisions of any applicable law,
including, without limitation, the Uniform Commercial Code, the only rights
or remedies which the Custodian is entitled to with respect to Overdrafts
is the right of set-off granted herein.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a written (including,
without limitation, facsimile transmission) request, direction, instruction
or certification signed or initialed by or on behalf of the Fund by two or
more Authorized Persons (as hereinafter defined); (ii) a telephonic or
other oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) by or on behalf
of the Fund by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered Proper
Instructions only if the Custodian reasonably believes such communications
to have been given by an Authorized Person with respect to the transaction
involved. Proper Instructions in the form of oral communications shall be
confirmed by the Fund by tested telex or in writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions prior to the Custodian's receipt of such confirmation. The
Fund and the Custodian are hereby authorized to record any and all
telephonic or other oral instructions communicated to the Custodian. Proper
Instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or confirmed in
writing by the Treasurer or any Assistant Treasurer of the Fund or any
other person designated by the Treasurer of the Fund in writing, which
countersignature or confirmation shall be (i) included on the same
instrument containing the Proper Instructions or on a separate instrument
relating thereto, and (ii) delivered by hand, by facsimile transmission or
in such other manner as the Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of the Fund, a certificate setting forth:
(a) the names, titles, signatures, and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of the Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes or does not include the name(s) of
a person previously authorized to give Proper Instructions or to issue
Special Instructions, such persons shall no longer be considered an
Authorized Person or authorized to issue Special Instructions.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Director, officer, employee or agent of the Fund shall
have physical access to the Assets of the Fund held by the Custodian nor
shall the Custodian deliver any Assets of the Fund to an account of such
person; provided, however, that nothing in this Section 3.03 shall prohibit
(a) any Authorized Person from giving Proper Instructions, or any person
authorized to issue Special Instructions from issuing Special Instructions,
so long as such action does not result in delivery of or access to Assets
of the Fund prohibited by this Section 3.03; or (b) the Fund's independent
certified public accountants from examining or reviewing the Assets of the
Fund held by the Custodian. The Fund will deliver from time to time a
written certificate executed by two Authorized Persons identifying such
Authorized Persons, Directors, officers, employees and agents of the Fund.
Notwithstanding the foregoing, to the extent that the person acting on
behalf of the Custodian in making such delivery has actual knowledge that
any person is an Authorized Person, Director, officer, employee or agent of
the Fund, the Custodian will comply with this Section 3.03 as if the name
of such Authorized Person, Director, officer, employee or agent had been
contained in a written certificate provided pursuant to this Section 3.03.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
From time to time, in accordance with the relevant provisions of this
Agreement, (i) the Custodian may appoint one or more Domestic Subcustodians
and Special Subcustodians (each as hereinafter defined) to act on behalf of
the Fund; and (ii) the Custodian may be directed, pursuant to an agreement
between the Fund and the Custodian ("Delegation Agreement"), to appoint a
Domestic Subcustodian to perform the duties of the Foreign Custody Manager
(as such term is defined in Rule 17f-5 under the 1940 Act) ("Approved
Foreign Custody Manager") so long as the Domestic Subcustodian is so
eligible under the 1940 Act. Such Delegation Agreement shall provide that
the appointment of any Domestic Subcustodian as the Approved Foreign
Custody Manager must be governed by a written agreement between the
Custodian and the Domestic Subcustodian, which provides for compliance with
Rule 17f-5. The Approved Foreign Custody Manager may appoint a Foreign Sub-
Subcustodian or Interim Sub-Subcustodian (each as hereinafter defined) in
accordance with this Article IV. For purposes of this Agreement, all
Domestic Subcustodians, Special Subcustodians, Foreign Sub-Subcustodians
and Interim Sub-Subcustodians shall be referred to collectively as
"Subcustodians".
Section 4.01. Domestic Subcustodians. The Custodian may, at any time
and from time to time, appoint any bank as defined in Section 2(a)(5) of
the 1940 Act or any trust company or other entity any of which meet
requirements of a custodian under Section 17(f) of the 1940 Act and the
rules and regulations thereunder, to act as agent for the Custodian on
behalf of the Fund as a subcustodian for purposes of holding cash,
securities and other Assets of the Fund and performing other functions of
the Custodian within the United States (a "Domestic Subcustodian");
provided, that, the Custodian shall notify the Fund in writing of the
identity and qualifications of any proposed Domestic Subcustodian at least
sixty (60) days prior to the desired appointment of such Domestic
Subcustodian, and the Fund will notify the Custodian, in writing signed by
two or more Authorized Persons, of approval or disapproval of the
appointment of the proposed Domestic Subcustodian; and provided, further,
that the Custodian may not appoint any such Domestic Subcustodian without
such prior written approval of the Fund by such Authorized Persons. Each
such duly approved Domestic Subcustodian and the countries where Foreign
Sub-Subcustodians through which they may hold securities and other Assets
of the Fund shall be as agreed upon by the parties hereto in writing, from
time to time, in accordance with the provisions of Section 9.04 hereof (the
"Subcustodian List").
Section 4.02. Foreign Sub-Subcustodians and Interim Sub-Subcustodians.
(a) Foreign Sub-Subcustodians. The Approved Foreign Custody Manager
may appoint any entity meeting the requirements of an Eligible Foreign
Custodian, as such term is defined in Rule 17f-5(a)(1) under the 1940 Act,
and which term shall also include a bank that qualifies to serve as a
custodian of assets of investment companies under Section 17(f) of the 1940
Act or by SEC order is exempt therefrom (each a "Foreign Sub-
Subcustodian"), provided that the Approved Foreign Custody Manager's
appointments of such Eligible Foreign Custodians shall at all times be
governed by an agreement that complies with Rule 17f-5.
(b) Interim Sub-Subcustodians. Notwithstanding the foregoing, in the
event that the Fund shall invest in a security or other Asset to be held in
a country in which the Approved Foreign Custody Manager has not appointed a
Foreign Sub-Subcustodian or for which the Fund has otherwise directed that
a specific Foreign Sub-Subcustodian be used, the Custodian shall, or shall
cause the Approved Foreign Custody Manager to, promptly notify the Fund in
writing by facsimile transmission or in such other manner as the Fund and
Custodian shall agree in writing of the unavailability of an approved
Foreign Sub-Subcustodian in such country; and upon the receipt of Special
Instructions, the Custodian shall, or shall cause the Approved Foreign
Custody Manager to, appoint or approve any Person (as hereinafter defined)
designated by the Fund in such Special Instructions, to hold such security
or other Asset. The subcustodian agreement between the Custodian and the
Interim Sub-Subcustodian (as hereinafter defined) shall comply with the
provisions of the 1940 Act and the rules and regulations thereunder
(including Rule 17f-5, if applicable) and the terms and provisions of this
Agreement. The Custodian shall comply with Section 4.02(a) hereof with
respect to the appointment of an Interim Sub-Subcustodian. (Any Person
appointed or approved as the sub-subcustodian pursuant to this Section
4.02(b) is hereinafter referred to as an "Interim Sub-Subcustodian.")
(c) In the event that the Approved Foreign Custody Manager or its
delegate reasonably determines that such Person will not provide delegation
services (i) in a country in which the Fund has directed that the Fund
shall invest in a security or other Asset or (ii) with respect to a
specific Foreign Sub-Subcustodian which the Fund has directed be used, the
Approved Foreign Custody Manager or the Custodian (or its agent), as
applicable, shall be entitled to rely on any such instruction provided
pursuant to Section 4.02(b) as a Proper Instruction and shall have no
duties or liabilities under this Agreement with respect to such arrangement
save those that it may undertake specifically in writing with respect to
each particular instance; provided that the Delegation Agreement and this
Agreement shall not constitute the Approved Foreign Custody Manager or the
Custodian (or its agent), as the exclusive delegate of the Fund for
purposes of Rule 17f-5 and, particularly where such Person does not agree
to provide fully the services under this Agreement and the Delegation
Agreement to the Fund with respect to a particular country or specific
Foreign Sub-Subcustodian, the Fund may delegate such services to another
delegate pursuant to Rule 17f-5.
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of the Fund, appoint one or
more banks, trust companies or other entities designated in such Special
Instructions to act as a subcustodian for the purpose of (i) effecting
third-party repurchase transactions with banks, brokers, dealers or other
entities, (ii) providing depository and clearing agency services with
respect to certain variable rate demand note securities; and (iii)
effecting any other transactions designated by the Fund in Special
Instructions. (Each such designated subcustodian is hereinafter referred to
as a "Special Subcustodian.") Each such duly appointed Special
Subcustodian shall be listed on the Subcustodian List. In connection with
the appointment of any Special Subcustodian, the Custodian shall enter into
a subcustodian agreement with the Special Subcustodian in form and
substance approved by the Fund, provided that such agreement shall in all
events comply with the provisions of the 1940 Act and the rules and
regulations thereunder and the terms and provisions of this Agreement. The
Custodian shall not amend any subcustodian agreement entered into with a
Special Subcustodian, or agree to change or permit any changes thereunder,
or waive any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian to, and (ii) use its best efforts to cause
each Interim Sub-Subcustodian and Special Subcustodian to, perform all of
its obligations in accordance with the terms and conditions of the
subcustodian agreement between the Custodian and such Domestic Subcustodian
and Special Subcustodian or between the Domestic Subcustodian and an
Interim Sub-Subcustodian. In the event that the Custodian is unable to
cause such subcustodian or sub-subcustodian to fully perform its
obligations thereunder, the Custodian shall promptly notify the Fund in
writing and forthwith, upon the receipt of Special Instructions, terminate
or cause the termination of such Subcustodian or Sub-Subcustodian with
respect to the Fund and, if necessary or desirable, appoint or cause the
appointment of a replacement Subcustodian or Sub-Subcustodian in accordance
with the provisions of this Article IV. In addition to the foregoing, the
Custodian (A) may, at any time in its discretion, upon written notification
to the Fund, terminate any Domestic Subcustodian which is not an approved
Foreign Custody Manager, and (B) shall, upon receipt of Special
Instructions, terminate any Special Subcustodian or Domestic Subcustodian
which is an Approved Foreign Custody Manager with respect to the Fund, in
accordance with the termination provisions under the applicable
subcustodian agreement, and (C) shall, upon receipt of Special
Instructions, cause the Domestic Subcustodian to terminate any Foreign Sub-
Subcustodian or Interim Sub-Subcustodian as to its use of such entities
with respect to the Fund, in accordance with the termination provisions
under the applicable sub-subcustodian agreement.
Section 4.05. Certification Regarding Foreign Sub-Subcustodians.
Upon request of the Fund, the Custodian shall deliver, or cause any
Approved Foreign Custody Manager to deliver, to the Fund a certificate
stating: (i) the identity of each Foreign Sub-Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which the Eligible
Securities Depositories (as defined in Section 4.06) through which each
Foreign Sub-Subcustodian is then holding cash, securities and other Assets
of the Fund; and (iii) such other information as may be requested by the
Fund to ensure compliance with rules and regulations under the 1940 Act.
Upon request of the Fund, the Custodian also shall deliver, or cause
any Domestic Subcustodian that has been approved as a Foreign Custody
Manager to deliver, to the Fund: (i) legal opinions relating to whether
local law restricts with respect to U.S.-registered mutual funds (a) access
of a fund's independent public accountants to books and records of a
Foreign Sub-Subcustodian, foreign Securities Depository or foreign Clearing
Agent, (b) a fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Subcustodian, foreign Securities Depository or
foreign Clearing Agent, (c) a fund's ability to recover in the event of a
loss by a Foreign Sub-Subcustodian, foreign Securities Depository or
foreign Clearing Agent, and (d) the ability of a foreign investor (such as
a fund) to convert cash and cash equivalents to U.S. dollars; (ii) a
summary of information regarding foreign Securities Depositories and
foreign Clearing Agents; and (iii) country profile information containing
market practice for (a) delivery versus payment, (b) settlement method, (c)
currency restrictions, (d) buy-in practices, (e) foreign ownership limits
and (f) unique market arrangements.
Section 4.06. Securities Depositories.
(a) The Custodian (or its agent) may place and maintain the Fund's
Foreign Assets (as defined in Rule 17f-5 under the 0000 Xxx) with an
Eligible Securities Depository (as defined in Rule 17f-7, which term shall
include any other securities depository for which the SEC by exemptive
order has permitted registered investment companies to maintain their
assets).
(b) The Custodian (or its agent) shall, for evaluation by the Fund or
its adviser, provide an analysis of the custody risks associated with
maintaining the Fund's Foreign Assets with each Eligible Securities
Depository utilized directly or indirectly by the Custodian as of the date
hereof (or, in the case of an Eligible Securities Depository not so
utilized as of the date hereof, prior to the initial placement of the
Fund's Foreign Assets at such Depository) and at which any Foreign Assets
of the Fund are held or are expected to be held. The Custodian (or its
agent) shall monitor the custody risks associated with maintaining the
Fund's Foreign Assets at each such Eligible Securities Depository on a
continuing basis and shall promptly notify the Fund or its adviser of any
material changes in such risks.
(c) Based on the information available to it in the exercise of
diligence, the Custodian (or its agent) shall determine the eligibility
under Rule 17f-7 of each foreign securities depository before maintaining
the Fund's Foreign Assets therewith and shall promptly advise the Fund if
any Eligible Securities Depository ceases to be so eligible. A list of
Eligible Securities Depositories used by the Custodian directly or
indirectly as of the date hereof is attached as Appendix A. Notwithstanding
Section 9.04 hereof, Eligible Securities Depositories may, subject to Rule
17f-7, be added to the list from time to time.
(d) Withdrawal of Assets. If an arrangement with an Eligible
Securities Depository no longer meets the requirements of Rule 17f-7, the
Custodian (or its agent) will withdraw the Fund's Foreign Assets from such
depository as soon as reasonably practicable.
(e) Standard of Care. In fulfilling its responsibilities under this
Section 4.06, the Custodian will exercise reasonable care, prudence and
diligence.
Section 4.07. The Fund shall not place or maintain any of the Fund's
Foreign Assets in any country, and shall as promptly as practicable
withdraw the Fund's Foreign Assets from any country, that is identified in
the Global Custody Network Listing provided by the Custodian (or its agent)
as a country where the liability or responsibility of the Approved Foreign
Custody Manager or the Custodian (or its agent) is conditioned or
predicated on the ability of the Approved Foreign Custody Manager or the
Custodian (or its agent) to recover damages from the Foreign Sub-
Subcustodian in such country.
ARTICLE V
STANDARD OF CARE, INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Fund for all loss, damage and
expense suffered or incurred by the Fund resulting from the failure of the
Custodian to exercise such reasonable care and diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, Eligible Securities Depository
utilized by any such Subcustodian, or any nominee of the Custodian or any
Subcustodian (individually, a "Person") is prevented, forbidden or delayed
from performing, or omits to perform, any act or thing which this Agreement
provides shall be performed or omitted to be performed, by reason of: (i)
any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or of any foreign country,
or political subdivision thereof or of any court of competent jurisdiction
(and the Custodian nor any other Person shall not be obligated to take any
action contrary thereto); or (ii) any "Force Majeure," which for purposes
of this Agreement, shall mean any circumstance or event which is beyond the
reasonable control of the Custodian, a Subcustodian or any agent of the
Custodian or a Subcustodian and which adversely affects the performance by
the Custodian of its obligations hereunder, by the Subcustodian of its
obligations under its subcustody agreement or by any other agent of the
Custodian or the Subcustodian, unless in each case, such delay or
nonperformance is caused by the negligence, misfeasance or misconduct of
the Custodian. Such Force Majeure events may include any event caused by,
arising out of or involving (a) an act of God, (b) accident, fire, water
damage or explosion, (c) any computer, system or other equipment failure or
malfunction caused by any computer virus or the malfunction or failure of
any communications medium, (d) any interruption of the power supply or
other utility service, (e) any strike or other work stoppage, whether
partial or total, (f) any delay or disruption resulting from or reflecting
the occurrence of any Sovereign Risk (as defined below), (g) any disruption
of, or suspension of trading in, the securities, commodities or foreign
exchange markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, or (i) any other
cause similarly beyond the reasonable control of the Custodian.
Subject to the Custodian's general standard of care set forth in Section
5.01(a) hereof and the requirements of Section 17(f) of the 1940 Act and
Rules 17f-5 and 17f-7 thereunder, the Custodian shall not incur liability
hereunder if any Person is prevented, forbidden or delayed from performing,
or omits to perform, any act or thing which this Agreement provides shall
be performed or omitted to be performed by reason of any (i) "Sovereign
Risk," which for the purpose of this Agreement shall mean, in respect of
any jurisdiction, including the United States of America, where investments
are acquired or held under this Agreement, (a) any act of war, terrorism,
riot, insurrection or civil commotion, (b) the imposition of any
investment, repatriation or exchange control restrictions by any
governmental authority, (c) the confiscation, expropriation or
nationalization of any investments by any governmental authority, whether
de facto or de jure, (d) any devaluation or revaluation of the currency,
(e) the imposition of taxes, levies or other charges affecting investments,
(f) any change in the applicable law, or (g) any other economic or
political risk incurred or experienced that is not directly related to the
economic or financial conditions of the Eligible Foreign Custodian, except
as otherwise provided in this Agreement or the Delegation Agreement, or
(ii) "Country Risk," which for the purpose of this Agreement shall mean,
with respect to the acquisition, ownership, settlement or custody of
investments in a jurisdiction, all risks relating to, or arising in
consequence of, systemic and markets factors affecting the acquisition,
payment for or ownership of investments, including (a) the prevalance of
crime and corruption except for crime or corruption by the Eligible Foreign
Custodian, or its employees, directors or officers, (b) the inaccuracy or
unreliability of business and financial information (unrelated to the
Approved Foreign Custody Manager's duties imposed by Rule 17f-5(c) under
the 1940 Act or to the duties imposed on the Custodian by Rule 17f-7 under
the 1940 Act), (c) the instability or volatility of banking and financial
systems, or the absence or inadequacy of an infrastructure to support such
systems, (d) custody and settlement infrastructure of the market in which
such investments are transacted and held, (e) the acts, omissions and
operation of any Eligible Securities Depository, it being understood that
this provision shall not affect any liability that the Custodian otherwise
would have under the Delegation Agreement or with respect to foreign
subcustodians and securities depositories under this Agreement, (f) the
risk of the bankruptcy or insolvency of banking agents, counterparties to
cash and securities transactions, registrars or transfer agents, (g) the
existence of market conditions which prevent the orderly execution or
settlement of transactions or which affect the value of assets, and (h) the
laws relating to the safekeeping and recovery of the Fund's Foreign Assets
held in custody pursuant to the terms of this Agreement; provided, however,
that, in compliance with Rule 17f-5, neither Sovereign Risk nor Country
Risk shall include the custody risk of a particular Eligible Foreign
Custodian of the Fund's Foreign Assets.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund, (i) the
Custodian shall, (ii) the Custodian shall cause any applicable Domestic
Subcustodian or Foreign Sub-Subcustodian to, and (iii) the Custodian shall
use its best efforts to cause any applicable Interim Sub-Subcustodian or
Special Subcustodian to, use all commercially reasonable efforts and take
all reasonable steps under the circumstances to mitigate the effects of
such event and to avoid continuing harm to the Fund.
(d) Advice of Counsel. The Custodian shall be without liability for
any action reasonably taken or omitted in good faith pursuant to the
written advise of (i) counsel for the Fund, or (ii) at the expense of the
Custodian, such other counsel as the Fund and the Custodian may agree upon
in writing; provided, however, with respect to the performance of any
action or omission of any action upon such advice, the Custodian shall be
required to conform to the standard of care set forth in Section 5.01 (a).
(e) Expenses of the Fund. In addition to the liability of the
Custodian under this Article V, the Custodian shall be liable to the Fund
for all reasonable costs and expenses incurred by the Fund in connection
with any claim by the Fund against the Custodian arising from the
obligations of the Custodian hereunder including, without limitation, all
reasonable attorneys' fees and expenses incurred by the Fund in asserting
any such claim, and all expenses incurred by the Fund in connection with
any investigations, lawsuits or proceedings relating to such claim;
provided however, that the Fund has recovered from the Custodian for such
claim.
(f) Liability for Past Records. The Custodian shall have no liability
in respect of any loss, damage or expense suffered by the Fund, insofar as
such loss, damage or expense arises from the performance of the Custodian
in reliance upon records that were maintained for the Fund by entities
other than the Custodian prior to the Custodian's employment hereunder
which the Custodian has no reason to believe are inaccurate or incomplete
after reasonable inquiry.
Section 5.02. Liability of the Custodian for Actions of Other
Persons.
(a) Domestic Subcustodian and Foreign Sub-Subcustodian. The Custodian
shall be liable for the actions or omissions of any Domestic Subcustodian
or Foreign Sub-Subcustodian (excluding any Eligible Securities Depository
appointed by them) to the same extent as if such actions or omissions were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by the Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Sub-
Subcustodian for which the Custodian would otherwise be liable, the
Custodian shall promptly reimburse the Fund in the amount of any such loss,
damage or expense.
(b) Special Subcustodians, Interim Sub-Subcustodians, Security
Systems, Securities Depositories and Clearing Agencies. The Custodian shall
not be liable to the Fund for any loss, damage or expense suffered or
incurred by the Fund resulting from the actions or omissions of a Special
Subcustodian, Interim Sub-Subcustodian, Securities System or Eligible
Securities Depository unless such loss, damage or expense is caused by, or
results from, the negligence, misfeasance or misconduct of the Custodian;
provided, however, in the event of any such loss, damage or expense, the
Custodian shall take all reasonable steps to enforce such rights as it may
have against such Special Subcustodian, Interim Sub-Subcustodian, Security
System, or Eligible Securities Depository to protect the interest of the
Fund.
(c) Reimbursement of Expenses. The Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian in connection with the fulfillment of its obligations under
Section 5.01(c) as it relates to Interim Sub-Subcustodians and Special
Subcustodians and 5.02(b); provided however, that such reimbursement shall
not apply to expenses occasioned by or resulting from the negligence,
misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification by Fund.
(a) Indemnification Obligations of Fund. Subject to the limitations
set forth in this Agreement, the Fund agrees to indemnify and hold harmless
the Custodian and its nominees from all loss, damage and expense (including
reasonable attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the Custodian, its
employees or agents in the performance of its duties and obligations under
this Agreement; provided, however, that such indemnity shall not apply to
loss, damage and expense occasioned by or resulting from the negligence,
misfeasance or misconduct of the Custodian or its nominee. In addition, the
Fund agrees to indemnify any Person against liability incurred by reason of
taxes assessed to such Person resulting from the fact that securities and
other property of the Fund are registered in the name of such Person in
accordance with the provisions of this Agreement; provided, however, that
in no event shall such indemnification be applicable to income, franchise
or similar taxes which may be imposed or assessed against any Person. It is
also understood that the Fund agrees to indemnify and hold harmless the
Custodian and its nominee for any loss arising from a foreign currency
transaction or contract, where the loss results from a Sovereign Risk
(defined in Section 5.01(b)) or where any Person maintaining securities,
currencies, deposits or other Assets of the Fund in connection with any
such transactions has exercised reasonable care maintaining such property
or in connection with any such transaction involving such Assets. A
"Sovereign Risk" shall mean nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar
action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority
of currency restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or acts of war, terrorism, insurrection or
revolution.
(b) Notice of Litigation. Right to Prosecute, Etc. The Fund shall not
be liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified the Fund in writing of the commencement of any
litigation or proceeding brought against the Custodian or other Person in
respect of which indemnity may be sought under this Section 5.03. With
respect to claims in such litigation or proceedings for which indemnity by
the Fund may be sought and subject to applicable law and the ruling of any
court of competent jurisdiction, the Fund shall be entitled to participate
in any such litigation or proceeding with counsel of its choice at its own
expense in respect of that portion of the litigation for which the Fund may
be subject to an indemnification obligation; provided, however, a Person
shall be entitled to participate in (but not control) at its own cost and
expense, the defense of any such litigation or proceeding if the Fund has
not acknowledged in writing it obligation to indemnify the Person with
respect to such litigation or proceeding. If the Fund is not permitted to
participate or control such litigation or proceeding under applicable law
or by a ruling of a court of competent jurisdiction, or if the Fund chooses
not to so participate, the Custodian or other Person shall not consent to
the entry of any judgment or enter into any settlement in any such
litigation or proceeding without providing the Fund with adequate notice of
any such settlement or judgment, and without the Fund's prior written
consent which consent shall not be unreasonably withheld or delayed. All
Persons shall submit written evidence to the Fund with respect to any cost
or expense for which they are seeking indemnification in such form and
detail as the Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duty generally, and more particularly in connection with the purchase, sale
or exchange of securities made by or for the Fund, the Custodian shall not
be liable to the Fund and the Fund agrees to indemnify the Custodian and
its nominees, for any loss, damage or expense suffered or incurred by the
Custodian and its nominees arising out of any violation of any investment
or other limitation to which the Fund is subject except for violations of
which the Custodian has actual knowledge. For purposes of this Section 5.04
the term "actual knowledge" shall mean knowledge gained by the Custodian by
means other than from any prospectus published by the Fund or contained in
any filing by the Fund with the SEC.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to
the contrary contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System or other Person for
loss, damage or expense caused the Fund by such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that the Fund has
not been made whole for any such loss, expense or damage. If the Custodian
makes the Fund whole for any such loss, expense or damage, the Custodian
shall retain the ability to enforce its rights directly against such
Subcustodian, Securities System or other Person. Upon the Fund's election
to enforce any rights of the Custodian under this Section 5.05, the Fund
shall reasonably prosecute all actions and proceedings directly relating to
the rights of the Custodian in respect of the loss, damage or expense
incurred by the Fund; provided that, so long as the Fund has acknowledged
in writing its obligation to indemnify the Custodian under Section 5.03
hereof with respect to such claim, the Fund shall retain the right to
settle, compromise and/or terminate any action or proceeding in respect of
the loss, damage or expense incurred by the Fund without the Custodian's
consent and provided further, that if the Fund has not made an
acknowledgement of its obligation to indemnify, the Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with the Fund and take all
actions reasonably requested by the Fund in connection with the Fund's
enforcement of any rights of the Custodian. Nothing contained in this
Section 5.05 shall be construed as an obligation of the Fund to enforce the
Custodian's rights. The Fund agrees to reimburse the Custodian for out-of-
pocket expenses incurred by it in connection with the fulfillment of its
obligations under this Section 5.05; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
Section 5.06. Indemnification by Custodian.
(a) Indemnification Obligations of Custodian. Subject to the
limitations set forth in this Agreement and in addition to the
reimbursement obligations provided in Section 5.02(a), the Custodian agrees
to indemnify and hold harmless the Fund and its nominees from all loss,
damage and expense (including reasonable attorneys' fees) suffered or
incurred by the Fund or its nominee caused by or arising from the failure
of the Custodian, its nominee, employees or agents to comply with the terms
or conditions of this Agreement or arising out of the negligence,
misfeasance or misconduct of the Custodian or its nominee.
(b) Notice of Litigation, Right to Prosecute, Etc. The Custodian
shall not be liable for indemnification under this Section 5.06 unless the
Fund shall have promptly notified the Custodian in writing of the
commencement of any litigation or proceeding brought against the Fund in
respect of which indemnity may be sought under this Section 5.06. With
respect to claims in such litigation or proceedings for which indemnity by
the Custodian may be sought and subject to applicable law and the ruling of
any court of competent jurisdiction, the Custodian shall be entitled to
participate in any such litigation or proceeding with counsel of its choice
at its own expense in respect of that portion of the litigation for which
the Custodian may be subject to an indemnification obligation; provided,
however, the Fund shall be entitled to participate in (but not control) at
its own cost and expense, the defense of any such litigation or proceeding
if the Custodian has not acknowledged in writing its obligation to
indemnify the Fund with respect to such litigation or proceeding. If the
Custodian is not permitted to participate or control such litigation or
proceeding under applicable law or by a ruling of a court of competent
jurisdiction, or if the Custodian chooses not to so participate, the Fund
shall not consent to the entry of any judgement or enter into any
settlement in any such litigation or proceeding without providing the
Custodian with adequate notice of any such settlement or judgement, and
without the Custodian's prior written consent which consent shall not be
unreasonably withheld or delayed. The Fund shall submit written evidence to
the Custodian with respect to any cost or expense for which it is seeking
indemnification in such form and detail as the Custodian may reasonably
request.
Section 5.07. Custodian's Right to Proceed. Notwithstanding anything
to the contrary contained herein, the Custodian shall have, at its election
upon reasonable notice to the Fund, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Fund's rights
against any Subcustodian, Securities System or other Person for loss,
damage or expense caused the Custodian by such Subcustodian, Securities
System or other Person, which the Fund may have as a consequence of any
such loss, damage or expense, if and to the extent that the Custodian has
not been made whole for any such loss, expense or damage. If the Fund makes
the Custodian whole for any such loss, expense or damage, the Fund shall
retain the ability to enforce its rights directly against such
Subcustodian, Securities System or other Person. Upon the Custodian's
election to enforce any rights of the Fund under this Section 5.07, the
Custodian shall reasonably prosecute all actions and proceedings directly
relating to the rights of the Fund in respect of the loss, damage and
expense incurred by the Custodian; provided that, so long as the Custodian
has acknowledged in writing its obligation to indemnify the Fund under
Section 5.06 hereof with respect to such claim, the Custodian shall retain
the right to settle, compromise and/or terminate any action or proceeding
in respect of the loss, damage or expense incurred by the Custodian without
the Fund's consent and provided further, that if the Custodian has not made
an acknowledgement of its obligation to indemnify, the Custodian shall not
settle, compromise or terminate any such action or proceeding without the
written consent of the Fund, which consent shall not be unreasonably
withheld or delayed. The Fund agrees to cooperate with the Custodian and
take all actions reasonably requested by the Custodian in connection with
the Custodian's enforcement of any rights of the Fund. Nothing contained in
this Section 5.07 shall be construed as an obligation of the Custodian to
enforce the Fund's rights. The Custodian agrees to reimburse the Fund for
out-of-pocket expenses incurred by it in connection with the fulfillment of
its obligations under this Section 5.07; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Fund.
ARTICLE VI
COMPENSATION
For the initial three year period beginning on the effective date of
this Agreement, the Fund shall compensate the Custodian in the amount and
at the times specified in Appendix A attached hereto. Thereafter, the Fund
shall compensate the Custodian in the amount, and at times, as may be
agreed upon in writing, from time to time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
This Agreement shall continue in full force and effect until the first
to occur of: (a) termination by the Custodian by an instrument in writing
delivered or mailed (certified mail, return receipt requested) to the Fund,
such termination to take effect not sooner than ninety (90) days after the
date of such delivery or receipt; (b) termination by the Fund by an
instrument in writing delivered or mailed (certified mail, return receipt
requested) to the Custodian, such termination to take effect not sooner
than ninety (90) days after the date of such delivery or receipt; or (c)
termination by the Fund by an instrument in writing delivered to the
Custodian, based upon the Fund's determination that there is reasonable
basis to conclude that the Custodian is insolvent or that the financial
condition of the Custodian is deteriorating in any material respect, in
which case termination shall take effect upon the Custodian's receipt of
such notice or at such later time as the Fund shall designate. In the event
of termination pursuant to this Article VII, the Fund shall make payment of
all accrued fees and unreimbursed expenses within a reasonable time
following termination and delivery of a statement to the Fund setting forth
such fees and expenses. The Fund shall identify in any notice of
termination a successor custodian to which the cash, securities and other
Assets of the Fund shall, upon termination of this Agreement, be delivered.
In the event that securities and other Assets remain in the possession of
the Custodian after the date of termination hereof owing to failure of the
Fund to appoint a successor custodian, the Custodian shall be entitled to
compensation for its services in accordance with the fee schedule most
recently in effect, for such period as the Custodian retains possession of
such securities and other Assets, and the provisions of this Agreement
relating to the duties and obligations of the Custodian and the Fund shall
remain in full force and effect for such period. In the event of the
appointment of a successor custodian, the cash, securities and other Assets
owned by the Fund and held by the Custodian, any Subcustodian or nominee
shall be delivered, at the terminating party's expense, to the successor
custodian; and the Custodian agrees to cooperate with the Fund in the
execution of documents and performance of other actions necessary or
desirable in order to substitute the successor custodian for the Custodian
under this Agreement.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22(A)
ADRs 2.06
Approved Foreign Custody Manager Article IV
Assets Article I
Authorized Person 3.02
Banking Institution 2.12
Bank Accounts 2.21
Country Risk 5.01(b)
Delegation Agreement Article IV
Distribution Account 2.16
Domestic Subcustodian 4.01
Eligible Foreign Custodian 4.02(a)
Eligible Securities Depository 4.06(a)
Force Majeure 5.01(b)
Foreign Assets 4.06(a)
Foreign Custody Manager Article IV
Foreign Sub-Subcustodian 4.02(a)
Institutional Client 2.03
Interest Bearing Deposit 2.12
Interim Sub-Subcustodian 4.02(b)
OCC 2.09
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Sovereign Risk 5.01(b)
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by the Fund. Upon request, the Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement, provided that the exercise by the Custodian or any Subcustodian
of any such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable
in order to effectuate any of the transactions contemplated hereby and
designated therein.
Section 9.02. Representations and Warranties.
(a) Representations and Warranties of the Fund. The Fund hereby
represents and warrants that each of the following shall be true, correct
and complete as of the date of execution of this Agreement and, unless
notice to the contrary is provided by the Fund to the Custodian, at all
times during the term of this Agreement: (i) the Fund is duly organized
under the laws of its jurisdiction of organization and is registered as an
open-end management investment company under the 1940 Act or is a series of
portfolio of such entity; and (ii) the execution, delivery and performance
by the Fund of this Agreement are (w) within its power, (x) have been duly
authorized by all necessary action, and (y) will not (A) contribute to or
result in a breach of or default under or conflict with any existing law,
order, regulation or ruling of any governmental or regulatory agency or
authority, or (B) violate any provision of the Fund's corporate charter or
other organizational document, or bylaws, or any amendment thereof or any
provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants that each of the following shall be true,
correct and complete as of the date of execution of this Agreement and,
unless notice to the contrary is provided by the Custodian to the Fund, at
all times during the term of this Agreement: (i) the Custodian is duly
organized under the laws of its jurisdiction of organization and qualifies
to serve as a custodian to open-end management investment companies under
the provisions of the 1940 Act; and (ii) the execution, delivery and
performance by the Custodian of this Agreement are (w) within its power (x)
have been duly authorized by all necessary action, and (y) will not (A)
contribute to or result in a breach of or default under or conflict with
any existing law, order, regulation or ruling of any governmental or
regulatory agency or authority, or (B) violate any provision of the
Custodian's corporate charter, or other organizational document, or bylaws,
or any amendment thereof. The Custodian acknowledges receipt of a copy of
the Fund's most recent Prospectus and Statement of Additional Information.
Section 9.03. Entire Agreement. This Agreement and the Delegation
Agreement, as amended from time to time, constitute the entire
understanding and agreement of the parties thereto with respect to the
subject matter therein and accordingly, supercedes as of the effective date
of this Agreement any custodian agreement heretofore in effect between the
Fund and the Custodian.
Section 9.04. Waivers and Amendments. No provisions of this
Agreement may be waived, amended or deleted except by a statement in
writing signed by the party against which enforcement of such waiver,
amendment or deletion is sought.
Section 9.05. Interpretation. In connection with the operation of
this Agreement, the Custodian and the Fund may agree in writing from time
to time on such provisions interpretative of or in addition to the
provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 9.06. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Missouri, in each
case without giving effect to principles of conflicts of law.
Section 9.08. Notices. Except in the case of Proper Instructions or
Special Instructions, and as otherwise provided in this Agreement, notices
and other writings contemplated by this Agreement shall be delivered by
hand or by facsimile transmission or as otherwise agreed to by the Fund and
the Custodian in writing (provided that in the case of delivery by
facsimile transmission, notice shall also be mailed postage prepaid) to the
parties at the following addresses:
(a) If to the Fund:
Xxxxxxx & Xxxx Advisors Select Funds, Inc. Dividend Income Fund
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Fund Treasurer
Telephone: 000-000-0000
Telefax: 913-236-1595
CC: Fund Secretary
(b) If to the Custodian:
UMB Bank, n.a.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Securities Administration
Telephone: 000-000-0000
Telefax: 000-000-0000
or such other address as either party may have designated in writing to the
other party hereto.
Section 9.09. Assignment. This Agreement shall be binding on and
shall inure to the benefit of the Fund and the Custodian and their
respective successors and assigns, provided that, subject to the provisions
of Section 7.01 hereof, neither party hereto may assign this Agreement or
any of its rights or obligations hereunder without the prior written
consent of the other party.
Section 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original. This
Agreement shall become effective when one or more counterparts have been
signed and delivered by each of the parties.
Section 9.11. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodians, any
auditor or examiner of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation. The provisions of
this Section 9.11 and Section 9.01, 9.07, Section 2.28, Section 3.04,
Section 4.05, Section 7.01, Article V and Article VI hereof and any other
rights or obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above written.
XXXXXXX & XXXX SELECT FUNDS, INC. UMB BANK, n.a.
DIVIDEND INCOME FUND
By: _________________________ By: _____________________________
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxxx
Title: Vice President Title: Senior Vice President
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
XXXXXXX & XXXX ADVISORS SELECT FUNDS, INC.
DIVIDEND INCOME FUND
AND
UMB BANK, N.A.
Dated as of May 21, 2003
The Fund shall be responsible for providing the Custodian the net
asset levels the Custodian requires to calculate the net asset portion of
the Custodian's fees. Such determinations shall be based upon the average
monthly assets of each Fund and shall specify the level of domestic assets
and foreign assets by country, as appropriate. Domestic assets shall
include all assets held in the United States including but not limited to
American Depositary Receipts. Foreign assets shall include all assets held
outside the United States including but not limited to securities which
clear through Euroclear or CEDEL. The Custodian will provide as soon as
practicable after receiving the information provided by the Fund with
respect to the net asset level numbers, a xxxx for the Fund, including such
reasonable detail in support of each xxxx as may be reasonably requested by
the Fund. As used in this Appendix A, "Advisors Funds" shall mean all funds
in the Xxxxxxx & Xxxx Advisors Funds, W&R Target Funds, Inc., W&R Funds,
Inc., Xxxxxxx & Xxxx InvestEd Portfolios, Inc. and Ivy Fund.
DOMESTIC CUSTODY FEE SCHEDULE
A. Annual Fee (combining all domestic assets):
An annual fee to be computed as of month end and payable each month of
the Fund's fiscal year (after receipt of the xxxx issued to each Fund
based upon its portion of domestic assets), at the annual rate of:
.00003 for the first $5,000,000,000 of the net assets of all the
Advisors Funds, plus
.0000275 for the next $10,000,000,000 of the net assets of all the
Advisors Funds, plus
.0000265 for any net assets exceeding $15,000,000,000 of the assets of
all the Advisor Funds
B. Portfolio Transaction Fees (billed to each Fund):
(a) For each portfolio transaction* processed through a
Depository (DTC, PTC or Fed) $ 5.25
(b) For each portfolio transaction* processed through
the New York office (physical settlement) $20.00
(c) For each futures/option contract written $25.00
(d) For each principal/interest paydown $ 5.75
(e) For each interfund note transaction $ 6.00
(f) Fed $ 8.00
* A portfolio transaction includes a receive, delivery, maturity, free
security movement and corporate action.
C. Earnings Credits:
Positive earnings credits will be applied on all collected custody and
cash management balances of each Fund at the Custodian to earn the
Custodian's daily repurchase agreement rate less reserve requirements
and FDIC premiums. Negative earnings credits will be charged on all
uncollected custody and cash management balances of each Fund at the
Custodian's prime rate less 150 basis points on each day a negative
balance occurs. Positive and/or negative earnings credits will be
monitored daily for each Fund and the net positive or negative amount
for each Fund will be included in the monthly statements. Excess
positive credits for each Fund will be carried forward indefinitely.
D. Out-of-Pocket Expenses (passed directly from Special Subcustodians):
Includes all charges by any Special Subcustodian to the Custodian as
Custodian for any Assets held at the Special Subcustodian.
GLOBAL CUSTODY FEE SCHEDULE
A. Global Fee Schedule:
Market: Annual Asset Fees Transaction Fees
Argentina .0018 $ 55
Australia .0003 $ 40
Austria .000525 $ 40
Bangladesh .0006 $140
Belgium (Equity) .000325 $ 40
Belgium (Fixed Income) .00034 $ 40
Bolivia .0045 $100
Botswana .0060 $135
Brazil .0017 $ 00
Xxxxxxxx .0060 $135
Canada .00019 $ 18
Cedel/Euroclear (Fixed Income) .00017 $ 17
Cedel/Euroclear (Equity) .00045 $ 00
Xxxxx .0015 $ 65
China .0015 $ 00
Xxxxxxxx .0000 x000
Xxxxxxx .0070 $135
Czech Republic (Equity) .0023 $ 00
Xxxxx Xxxxxxxx (Fixed Income) .0014 $ 00
Xxxxxxx .00000 $ 40
Equador .0040 $110
Egypt .0040 $120
Estonia .0040 $ 90
Finland .00035 $ 40
France .00024 $ 23
Germany .00024 $ 21
Greece (Equity) .0020 $ 50
Greece (Fixed Income) .0013 $ 50
Hong Kong .000375 $ 48
Hungary (Physical Equity) .0029 $ 70
Hungary (Keler Eq/Fi) .0023 $ 70
India .0035 $ 80
Indonesia .0007 $ 70
Ireland .00015 $ 18
Israel .0015 $ 75
Italy .00019 $ 00
Xxxxx .00019 $ 26
Jordan .0040 $115
Korea .0010 $ 00
Xxxxxx .0060 $ 85
Lithuania .0050 $ 85
Malaysia .0007 $ 00
Xxxxxxxxx .0000 x000
Xxxxxx .00044 $ 28
Morocco .0040 $135
Netherlands .00019 $ 21
New Zealand .000375 $ 70
Norway .000285 $ 38
Pakistan .0040 $110
Panama .0070 $135
Xxxx .0000 $ 90
Philippines .0015 $ 70
Poland .0031 $ 80
Portugal .00095 $ 65
Romania .0035 $ 80
Russia (Equity) .0060 $100
Russia (Fixed Income) .0050 $100
Singapore .000375 $ 00
Xxxxxxxx .0035 $ 00
Xxxxxxxx .0000 x000
Xxxxx Xxxxxx .000375 $ 00
Xxxxx .000000 x 00
Xxx Xxxxx .0025 $ 55
Sweden .0003 $ 40
Switzerland .00021 $ 31
Taiwan .0015 $ 70
Thailand .00085 $ 00
Xxxxxx .0015 $ 50
U.K. .000135 $ 14
Uruguay .0035 $ 85
Venezuela .0037 $ 90
Zimbabwe .0060 $145
Note: Fee Schedule eliminates sub-custodian asset and transaction-based
out-of-pocket expenses. Other sub-custodian out-of-pocket expenses
(i.e. Scrip fees, stamp duties, certificate fees, etc.)
B. Out-of-Pocket Expenses (passed directly from Citibank):
Includes, but is not limited to telex, legal, telephones, postage, and
direct expenses including but not limited to tax reclaim, customized
systems programming, certificate fees, duties, and registration fees.
SUBCUSTODIAN LIST
PURSUANT TO CUSTODIAN AGREEMENT
BETWEEN
XXXXXXX & XXXX ADVISORS SELECT FUNDS, INC.
DIVIDEND INCOME FUND
AND
UMB BANK, n.a.
Dated as of May 21, 2003
The following is a list of Foreign Subcustodians and Special Subcustodians
under the Custodian Agreement:
A. Foreign Sub-Custodians
COUNTRY SUBCUSTODIAN DEPOSITORIES
ARGENTINA CITIBANK, NA CDV
CRYL
AUSTRALIA CITICORP NOMINEES PTY Austraclear
CHESS
AUSTRIA CITIBANK, NA (through Milan) OeKB
BANGLADESH STANDARD CHARTERED BANK (SCB) None
BELGIUM FORTIS BANK CIK
NBB
Euroclear
BELGIUM CITIBANK, NA Clearing Only (through Milan) CIK
NBB
BERMUDA BANK OF BERMUDA BSD
BOLIVIA CITIBANK, NA None
BOTSWANA BARCLAYS BANK OF BOTSWANA LIMITED None
BRAZIL CITIBANK, NA CBLC
CETIP
SELIC
BULGARIA SG EXPRESSBANK BNB
CDAD
CANADA CITIBANK CANADA CDS
CHILE CITIBANK, NA DCV
CHINA CITIBANK, NA CSDCC Shanghai
CSDCC Shenzhen
COLOMBIA CITITRUST COLOMBIA SA DCV
DECEVAL
COSTA RICA BANCO BCT CEVAL
CROATIA PRIVREDNA BANKA ZAGREB DD. SDA
MoF
CZECH REPUBLIC CITIBANK, AS CNB
SCP
DENMARK UNIBANK VP
ECUADOR CITIBANK, NA None
EGYPT CITIBANK, NA MCSD
ESTONIA HANSABANK LTD ECDS
FINLAND NORDEA BANK FINLAND PLC FCSD
FRANCE CITIBANK INTERNATIONAL PLC Euroclear France
GERMANY CITIBANK, AG CBF
GREECE CITIBANK, NA CSD
BOGS
HONG KONG CITIBANK, NA CMU
HKSCC
HUNGARY CITIBANK XX XXXXX Ltd
INDIA CITIBANK, NA NSDL
CDSL
RBI
INDONESIA CITIBANK, NA KSEI
IRELAND CITIBANK, NA CREST
Euroclear SA/NV
ISRAEL BANK HAPOALIM SECH
ITALY CITIBANK, NA MT
JAPAN CITIBANK, NA BOJ
JASDEC
JORDAN CITIBANK, NA None
KOREA CITIBANK, NA KSD
LATVIA HANSABANK BOL
LCD
LITHUANIA HANSABANK CSDL
LUXEMBOURG CLEARSTREAM BANKING (Luxembourg) Clearstream
MALAYSIA CITIBANK BERHAD BNM
MCD
MAURITIUS HONGKONG & SHANGHAI BANKING CORP CDS
MEXICO BANAMEX SA Indeval
MOROCCO CITIBANK MAGHREB MCLR
NETHERLANDS CITIBANK, NA NECIGEF
NIEC
NEW ZEALAND CITIBANK NOMINEES (NEW ZEALAND) LIMITED NZCSD
NORWAY NORDEA BANK NORGE ASA VPS
PAKISTAN CITIBANK, NA CDC
SBP
PERU CITIBANK, NA CAVALI
PHILIPPINES CITIBANK, NA PCD
XXXX
XXXXXX BANK HANDLOWY W WARSZAWIE SA NBP
NDS
PORTUGAL CITIBANK INTERNATIONAL PLC Interbolsa
PUERTO RICO CITIBANK, NA None
ROMANIA CITIBANK ROMANIA SA BSE
SNCDD
RUSSIA ZAO CITIBANK VTB
NDC
SINGAPORE CITIBANK, NA CDP
SLOVAKIA CESKOSLOVENSKA OBCHODNI BANK AS (CSOB) NBS
SCP
SLOVENIA BANK AUSTRIA KDD
SOUTH FIRST NATIONAL BANK OF SOUTH AFRICA LIMITED CDL
AFRICA STRATE
SPAIN CITIBANK INTERNATIONAL PLC XXXX
SCLV
SRI LANKA CITIBANK, NA CDS
SWEDEN SKANDINAVISKA ENSKILDA BANKEN (SEB) VPC
SWITZERLAND CITIBANK, NA SIS
TAIWAN CITIBANK, NA TSCD
THAILAND CITIBANK, NA TSD
TURKEY CITIBANK, NA CBT
Takasbank
UKRAINE ING BANK MFS
NBU
UNITED KINGDOM CITIBANK, NA CMO
CRESTCO
VENEZUELA CITIBANK, NA CVV
BCV
ZIMBABWE BARCLAYS BANK OF ZIMBABWE LIMITED None
B. Special Subcustodians:
Republic National Bank of New York
The Bank of New York, n.a.
