CUSTODIAN AGREEMENT
The Nevis Fund, Inc.
This agreement dated as of the 29th day of June, 1998, by and between The
Nevis Fund, Inc. (the "Fund"), a Maryland corporation, and First Union National
Bank (the "Bank").
WHEREAS, the Fund desires to appoint the Bank to act as Custodian of its
portfolio securities, cash and other property from time to time deposited with
or collected by the Bank for the Fund;
WHEREAS, the Bank is qualified and authorized to act as Custodian for the
Fund and is willing to act in such capacity upon the terms and conditions herein
set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this Agreement,
or in any amendment or supplement hereto, shall have the meanings herein
specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean the Bank in its capacity as Custodian
under this Agreement.
DEPOSITORY: The term Depository means any depository service which acts as a
system for the central handling of securities where all securities of any
particular class or series of an issuer deposited within the system are treated
as fungible and may be transferred by bookkeeping entry without physical
delivery.
PROPER INSTRUCTIONS: For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals of facsimile
transmissions), telephone or telegraphic instructions from a person or persons
authorized from time to time by the Board of Directors of the Fund to give the
particular class of instructions. Telephone or telegraphic instructions shall be
confirmed in writing by such persons as said Board of Directors shall have from
time to time authorized to give the particular class of instructions in
question. The Custodian may act upon telephone or telegraphic instructions
without awaiting receipt of written confirmation, and shall not be liable for
the Fund's failure to confirm such instructions in writing.
SECURITIES: The term Securities means stocks, bonds, rights, warrants and all
other negotiable or non-negotiable paper issued in certificated or book-entry
form commonly known as "Securities" in banking custom or practice.
STOCKHOLDERS: The term Stockholders shall mean the registered owners from time
to time of shares of common stock of the Fund (the "Shares") in accordance with
the registry records maintained by the Fund or agents on its behalf.
SECTION 2. The Fund hereby appoints the Custodian as Custodian of the Fund's
cash, Securities and other property, to be held by the Custodian as provided in
this Agreement. The Custodian hereby accepts such appointment subject to the
terms and conditions hereinafter provided. The Bank shall open a separate
custodial account in the name of the Fund on the books and records of the Bank
to hold the Securities of the Fund deposited with, transferred to or collected
by the Bank for the account of the Fund, and a separate cash account to which
the Bank shall credit monies received by the Bank for the account of or from the
Fund. Such cash shall be segregated from the assets of others and shall be and
remain the sole property of the Fund.
SECTION 3. The Fund shall from time to time file with the Custodian a certified
copy of each resolution of its Board of Directors authorizing the person or
persons to give Proper Instructions and specifying the class of instructions
that may be given by each person to the Custodian under this Agreement, together
with certified signatures of such persons authorized to sign, which shall
constitute conclusive evidence of the authority of the officers and signatories
designated therein to act, and shall be considered in full force and effect with
the Custodian fully protected in acting in reliance thereon until it receives
written notice to the contrary; provided, however, that if the certifying
officer is authorized to give Proper Instructions, the certification shall be
also signed by a second officer of the Fund.
SECTION 4. The Fund will cause to be deposited with the Custodian hereunder the
applicable net asset value of Shares sold from time to time whether representing
initial issue, other stock or reinvestments of dividends and/or distributions
payable to Stockholders.
SECTION 5. The Bank, acting as agent for the Fund, is authorized, directed and
instructed subject to the further provisions of this Agreement:
(a) to hold Securities issued only in bearer form;
(b) to register in the name of the nominee of the Bank, the Bank's
Depositories, or sub-custodians, (i) Securities issued only in
registered form, and (ii) Securities issued in both bearer and
registered form, which are freely interchangeable without penalty;
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(c) upon Proper Instructions, to deposit any Securities which are eligible
for deposit (i) with any domestic Depository which is itself qualified
under the Investment Company Act of 1940, as amended (the "1940 Act"),
to act as custodian on such terms and conditions as such Depository
may require, including provisions for limitation or exclusion of
liability on the part of the Depository; and (ii) with any
sub-custodian which the Bank uses, including any subsidiary or
affiliate of the Bank;
(d) (i) to credit for the account of the Fund all proceeds received and
payable on or in respect of the assets maintained hereunder,
(ii) to debit the account of the Fund for the cost of acquiring
Securities the Bank has received for the Fund, against delivery of
such Securities to the Bank,
(iii) to present for payment Securities and other obligations
(including coupons) upon maturity, when called for redemption, and
when income payments are due, and
(iv) to make exchanges of Securities which, in the Bank's opinion, are
purely ministerial as, for example, the exchange of Securities in
temporary form for Securities in definitive form or the mandatory
exchange of certificates;
(e) to forward to the Fund, and/or any other person designated by the
Fund, all proxies and proxy materials received by the Bank in
connection with Securities held in the Fund's account, which have been
registered in the name of the Bank's nominee, or are being held by any
Depository, or sub-custodian, on behalf of the Bank;
(f) to sell any fractional interest of any Securities which the Bank has
received resulting from any stock dividend, stock split, distribution,
exchange, conversion or similar activity;
(g) to release the Fund's name, address and aggregate share position to
the issuers of any domestic Securities in the account of the Fund,
provided any such information to any issuer;
(h) to endorse and collect all checks, drafts or other orders for the
payment of money received by the Bank for the account of or from the
Fund;
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(i) at the direction of the Fund, to enroll designated Securities
belonging to the Fund and held hereunder in a program for the
automatic reinvestment of all income and capital gains distributions
on those Securities in new shares (an "Automatic Reinvestment
Program"), or instruct any Depository holding such Securities to
enroll those Securities in an Automatic Reinvestment Program;
(j) at the direction of the Fund, to receive, deliver and transfer
Securities and make payments and collections of monies in connection
therewith, enter purchase and sale orders and perform any other acts
incidental or necessary to the performance of the above acts with
brokers, dealers or similar agents selected by the Fund, including any
broker, dealer or similar agent affiliated with the Bank, for the
account and risk of the Fund in accordance with accepted industry
practice in the relevant market; provided, however, if it is
determined that any certificated Securities transferred to a
Depository or sub-custodian, the Bank, or the Bank's nominee, the
Bank's sole responsibility for such Securities under this Agreement
shall be to safekeep the Securities in accordance with Section 11
hereof; and
(k) to notify the Fund and/or any other person designated by the Fund upon
receipt of notice by the Bank of any call for redemption, tender
offer, subscription rights, merger, consolidation, reorganization or
recapitalization which (i) appears in The Wall Street Journal (New
York edition), The Standard & Poor's Called Bond Record for Preferred
Stocks, Financial Daily Called Bond Service, The Xxxxx Services, any
official notifications from The Depository Fund Company and such other
publications or services to which the Bank may from time to time
subscribe, (ii) requires the Bank to act in response thereto, and
(iii) pertains to Securities belonging to the Fund and held hereunder
which have been registered in the name of the Bank's nominee or are
being held by a Depository or sub-custodian on behalf of the Bank.
Notwithstanding anything contained herein to the contrary, the Fund
shall have the sole responsibility for monitoring the applicable dates
on which Securities with put option features must be exercised.
Notwithstanding anything in this Section to the contrary, the Bank is authorized
to hold Securities for the Fund which have transfer limitations imposed upon
them by the Securities Act of 1933, as amended, or represent shares of mutual
funds (i) in the name of the Fund, (ii) in the name of the Bank's nominee, or
(iii) with any Depository or sub-custodian.
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SECTION 6. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such Schedule
approved by the Fund and to the extent such compensation relates to services
provided hereunder to the Fund. All expenses and taxes payable with respect to
the Securities in the account of the Fund including, without limitation,
commission charges on purchases and sales and the amount of any loss or
liability for stockholders' assessments or otherwise, claimed or asserted
against the Bank or against the Bank's nominee by reason of any registration
hereunder shall be charged to the Fund.
SECTION 7. In connection with its functions under this Agreement, the Custodian
shall:
(a) render to the Fund a daily report of all monies received or paid on
behalf of the Fund; and
(b) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Fund with respect to said Custodian's activities in
accordance with generally accepted accounting principles. All records
maintained by the Custodian in connection with the performance of its
duties under this Agreement will remain the property of the Fund and
in the event of termination of this Agreement will be relinquished to
the Fund.
SECTION 8. Any Securities deposited with any Depository or with any
sub-custodian will be represented in accounts in the name of the Bank which
include only property held by the Bank as Custodian for customers in which the
Bank acts in a fiduciary or agency capacity.
Should any Securities which are forwarded to the Bank by the Fund, and which are
subsequently deposited to the Bank's account in any Depository or with any
sub-custodian, or which the Fund may arrange to deposit in the Bank's account in
any Depository or with any sub-custodian, not be deemed acceptable for deposit
by such Depository or sub-custodian, for any reason, and as a result thereof
there is a short position in the account of the Bank with the Depository for
such Security, the Fund agrees to furnish the Bank immediately with like
Securities in acceptable form.
SECTION 9. The Fund represents and warrants that: (i) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Fund is a party or which is
otherwise known to the Fund; (iv) it does not require the consent or approval of
any governmental agency or instrumentality, except any such consents and
approvals which the Fund has obtained; (v) the
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execution and delivery of this Agreement by the Fund will not violate any law,
regulation, charter, by-law, order of any court or governmental agency or
judgment applicable to the Fund; and (vi) all persons executing this Agreement
on behalf of the Fund and carrying out the transactions contemplated hereby on
behalf of the Fund are duly authorized to do so.
In the event any of the foregoing representations should become untrue,
incorrect or misleading, the Fund agrees to notify the Bank immediately in
writing thereof.
SECTION 10. The Bank represents and warrants that: (i) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Bank is a party or which is
otherwise known to the Bank; (iv) it does not require the consent or approval of
any governmental agency or instrumentality, except any such consents and
approvals which the Bank has obtained; (v) the execution and delivery of this
Agreement by the Bank will not violate any law, regulation, charter, by-law,
order of any court or governmental agency or judgment applicable to the Bank;
and (vi) all persons executing this Agreement on behalf of the Bank and carrying
out the transactions contemplated hereby on behalf of the Bank are duly
authorized to do so. In the event that any of the foregoing representations
should become untrue, incorrect or misleading, the Bank agrees to notify the
Fund immediately in writing thereof.
SECTION 11. All cash and Securities held by the Bank hereunder shall be kept
with the care exercised as to the Bank's own similar property. The Bank may at
its option insure itself against loss from any cause but shall be under no
obligation to insure for the benefit of the Fund.
SECTION 12. No liability of any kind shall be attached to or incurred by the
Custodian by reason of its custody of the Fund's assets held by it from time to
time under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in this Agreement.
Without limiting the generality of the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel for the Fund; and for any action
taken or suffered in good faith based upon such advice or statements,
the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Fund or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Fund, or Proper Instructions, to the effect that a
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resolution in the form submitted has been duly adopted by its Board of
Directors or by the Stockholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect; and
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to be genuine and to have been signed,
forwarded or presented by the purchaser, the Fund or other proper
party or parties.
SECTION 13. The Fund and its successors and assigns do hereby agree to fully
indemnify and hold harmless the Custodian and its successors and assigns, from
any and all losses, liabilities, claims, demands, actions, suits and expenses of
any nature as the same may arise from the failure of the Fund to comply with any
law, rule, regulation or order of the United States, any state or any other
jurisdiction, governmental authority, body, or board relating to the sale,
registration, or qualification of Shares. Neither the Custodian nor its
affiliates, successors or assigns shall be indemnified against any liability or
any expense incident to such liability arising out of the negligence, bad faith
or willful misconduct of the Custodian or its affiliates, successors or assigns
in the performance of its or their duties under this Agreement.
Upon written request to the Custodian, the Fund may assume the entire defense of
any claim subject to the foregoing indemnity. The indemnity and defense
provisions of this Section 13 shall indefinitely survive termination of this
Agreement.
SECTION 14. This Agreement may be amended from time to time without notice to or
approval of the Stockholders by a supplemental agreement executed by the Fund
and the Bank.
SECTION 15. Either the Fund or the Custodian may give sixty (60) days' written
notice to the other of the termination of this Agreement, such termination to
take effect at the time specified in the notice. In case such notice of
termination is given either by the Fund or by the Custodian, the Board of
Directors of the Fund shall, by resolution duly adopted, promptly appoint a
successor Custodian (the "Successor Custodian") which Successor Custodian shall
be a bank, trust company, or a bank and trust company in good standing, with
legal capacity to accept custody of the cash and Securities of a mutual fund.
Upon receipt of written notice from the Fund of the appointment of such
Successor Custodian and upon receipt of Proper Instructions, the Custodian shall
deliver such cash and Securities as it may then be holding hereunder directly
and only to the Successor Custodian. Unless or until a Successor Custodian has
been appointed as above provided, the Custodian then acting shall continue to
act as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers,
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obligations and custody of its predecessor Custodian. The Custodian ceasing to
act shall nevertheless, upon request of the Fund and the Successor Custodian and
upon payment of its charges and disbursements, execute an instrument in form
approved by its counsel transferring to the Successor Custodian all the
predecessor Custodian's rights, duties, obligations and custody.
Subject to the provisions of Section 21 hereof, in case the Custodian shall
consolidate with or merge into any other corporation, the corporation remaining
after or resulting from such consolidation or merger shall ipso facto without
the execution or filing of any papers or other documents, succeed to and be
substituted for the Custodian with like effect as though originally named as
such, provided, however, in every case that said successor corporation maintains
the qualifications set out in Section 17(f) of the 1940 Act.
SECTION 16. This Agreement shall take effect when assets of the Fund are first
delivered to the Custodian.
SECTION 17. This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 18. The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the 1940 Act, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable Federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Fund.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian, the books and
records of the Custodian pertaining to this Agreement shall be open to
inspection and audit at any reasonable times by officers of, attorneys for, and
auditors employed by, the Fund.
SECTION 19. Any sub-custodian appointed hereunder shall be qualified under
Section 17(f) of the 1940 Act, will perform its duties in accordance with the
requirements of this Agreement and prior to appointment, shall be approved by
the Fund.
SECTION 20. Nothing contained in this Agreement is intended to or shall require
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
SECTION 21. This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of the Fund,
authorized or approved by a resolution of its Board of Directors.
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SECTION 22. All communications (other than Proper Instructions) which are to be
furnished hereunder to either party, or under any amendment hereto, shall be
sent by mail to the address listed below, provided that in the event that the
Bank, in its sole discretion, shall determine that an emergency exists, the Bank
may use such other means of communications as the Bank deems advisable.
To the Fund: The Nevis Fund, Inc.
0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Copy to: Xxxx X. Xxxxxx, Esq.
Piper & Marbury L.L.P.
0000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
To the Bank: First Union National Bank
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
SECTION 23. This Agreement, and any amendments hereto, shall be governed,
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania applicable to agreements made and to be performed entirely within
the Commonwealth.
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IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement
to be signed by their respective officers as of the day and year first above
written.
THE NEVIS FUND, INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx, III
Title: President
FIRST UNION NATIONAL BANK
By:
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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SCHEDULE A
Fee Schedule
Custody Administrative Fees:
1.00 basis points on the first $2.5 billion
.75 basis points on the next $2.5 billion
.50 basis points on the next $5.0 billion
.40 basis points on remainder
Transaction Fees:
$ 4.00 per trade and maturity through Depository Trust Company.
$10.00 per trade and maturity clearing book entry through Federal Reserve.
$30.00/transaction for GIC contracts/Physical Securities.
$10.00 per trade and maturity clearing through Participants Trust Company.
$ 4.00 paydowns on mortgage-backed securities.
$ 5.50 Fed wire charge on Repo collateral in/out.
$ 5.50/$7.50 other cash wire transfers in/out.
$ 5.50 Dividend reinvestment.
$ 2.50 Fed charge for sale/return of collateral.
$ 8.00 Future Contracts.
$15.00 Options.
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