MUTUAL FUND CUSTODY AGREEMENT
XXXXXX XXXXXXX FUND, INC.
UNITED STATES TRUST COMPANY OF NEW YORK
MARCH 11, 1994
MUTUAL FUND CUSTODY AGREEMENT
XXXXXX XXXXXXX FUND, INC.
TABLE OF CONTENTS
SECTION/PARAGRAPH PAGE
1. Appointment 1
2. Delivery of Documents 1
3. Definitions 3
4. Delivery and Registration of the Property 4
5. Voting Rights 5
6. Receipt and Disbursement of Money 6
7. Receipt of Securities 7
8. Use of Securities Depository or the Book-Entry System 8
9. Instructions Consistent with the Articles, etc. 9
10. Transactions Not Requiring Written Instructions 10
11. Transactions Requiring Written Instructions 16
12. Purchase of Securities 17
13. Sales of Securities 18
14. Authorized Shares 18
15. Records 18
16. Cooperation with Accountants 19
17. Confidentiality 00
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00. Xxxxxxxxx Xxxxxxxx 00
00. Right to Receive Advice 20
20. Compliance with Governmental Rules and Regulations 21
21. Compensation 21
22. Indemnification 21
23. Responsibility of U.S. Trust 23
24. Collection 24
25. Duration and Termination 24
26. Notices 25
27. Further Actions 26
28. Amendments 26
29. Miscellaneous 26
Signatures 27
Attachment A -- Fees
Attachment B -- Authorized Persons
Attachment C -- Investment Funds of the Fund
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MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of March ____, 1994, by and between Xxxxxx
Xxxxxxx Fund, Inc., a Maryland corporation (the "Fund"), and UNITED STATES TRUST
COMPANY OF NEW YORK, a New York State chartered bank trust company ("U.S.
Trust").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund desires to retain U.S. Trust to serve as the Fund's
custodian and U.S. Trust is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints U.S. Trust to act as
custodian of its portfolio securities, cash and other property on the terms set
forth in this Agreement. U.S. Trust accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 21 of this Agreement.
2. DELIVERY OF DOCUMENTS. The Fund will promptly furnish to U.S.
Trust such copies, properly certified or authenticated, of contracts, documents
and other related information that U.S. Trust may request or requires to
discharge its duties properly. Such documents may include but are not limited
to the following:
(a) Resolutions of the Fund's Directors authorizing the
appointment of U.S. Trust as Custodian of the portfolio securities, cash
and other property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and
containing the signatures of the Fund's officers and/or the persons
authorized to sign Written Instructions, as hereinafter defined, on behalf
of the Fund;
(c) The Fund's Articles of Incorporation filed with the
Department of Assessments of the State of Maryland and all amendments
thereto (such Articles of Incorporation, as currently in effect and as they
shall from time to time be amended, are herein called the "Articles");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws,
as currently in effect and as they shall from time to time be amended, are
herein called the "By-Laws");
(e) Resolutions of the Fund's Directors and/or the Fund's
stockholders approving the Investment Advisory Agreement between the Fund
and the Fund's investment adviser (the "Advisory Agreement");
(f) The Advisory Agreement;
(g) The Fund's current Registration Statement on Form N-1A under
the 1940 Act and the Securities Act of 1933, as amended ("xxx 0000 Xxx") as
filed with the Securities and Exchange Commission (the "SEC"); and
(h) The Fund's most recent prospectus including all amendments
and supplements thereto (the "Prospectus").
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The Fund will furnish U.S. Trust from time to time with copies of all
amendments of or supplements to the foregoing, if any. The Fund will also
furnish U.S. Trust with a copy of the opinion of counsel for the Fund with
respect to the validity of the shares of common stock, par value $.001 per share
(the "Shares"), of the Fund and the status of such Shares under the 1933 Act as
registered with the SEC, and under any other applicable federal law or
regulation.
3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means the Fund's President, Vice-President, Treasurer
and any other person, whether or not any such person is an officer or
employee of the Fund, duly authorized by the Directors of the Fund to give
Written Instructions on behalf of the Fund and listed on Attachment B
hereto which may be amended from time to time.
(b) "BOOK-ENTRY SYSTEM". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system
for United States and federal agency securities, its successor or
successors and its nominee or nominees.
(c) "PROPERTY". The term "Property", as used in this Agreement,
means:
(i) any and all securities, cash, and other property of the
Fund which the Fund may from time to time deposit, or cause to be
deposited, with U.S. Trust or which U.S. Trust may from time to time
hold for the Fund;
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(ii) all income in respect of any such securities or other
property;
(iii) all proceeds of the sales of any of such securities or
other property; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by U.S. Trust from time to time from or on
behalf of the Fund.
(d) "SECURITIES DEPOSITORY". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC, or its successor or successors and its
nominee or nominees; and shall also mean any other registered clearing
agency, its successor or successors, specifically identified in a certified
copy of a resolution of the Fund's Directors approving deposits by U.S.
Trust therein.
(e) "WRITTEN INSTRUCTIONS". Means instructions
(i) delivered by mail, tested telegram, cable, telex,
facsimile sending device, and received by U.S. Trust, signed by two
Authorized Persons or by persons reasonably believed by U.S. Trust to
be Authorized Persons; or
(ii) transmitted electronically through the U.S. Trust Asset
Management System or any similar electronic instruction system
acceptable to U.S. Trust.
4. DELIVERY AND REGISTRATION OF THE PROPERTY. The Fund will deliver
or cause to be delivered to U.S. Trust all Property owned by it, including cash
received for the
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issuance of its Shares, at any time during the period of this Agreement, except
for securities and monies to be delivered to any subcustodian appointed pursuant
to Paragraph 7 hereof. U.S. Trust will not be responsible for such securities
and such monies until actually received by U.S. Trust or by any subcustodian.
All securities delivered to U.S. Trust or to any such subcustodian (other than
in bearer form) shall be registered in the name of the Fund or in the name of a
nominee of the Fund or in the name of U.S. Trust or any nominee of U.S. Trust
(with or without indication of fiduciary status) or in the name of any
subcustodian or any nominee of such subcustodian appointed pursuant to Paragraph
7 hereof or shall be properly endorsed and in form for transfer satisfactory to
U.S. Trust.
5. VOTING RIGHTS. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Fund. U.S. Trust's only duty shall be to mail to the Fund
any documents received, including proxy statements and offering circulars, with
any proxies for securities registered in a nominee name executed by such
nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Fund understands that in order for U.S. Trust to act, U.S.
Trust must receive the Fund's instructions at its offices in New York City,
addressed as U.S. Trust may from time to time request, by no later than noon
(New York City time) at least one business day prior to the last scheduled date
to act with respect thereto (or such earlier date or time as permits the Fund a
reasonable period of time in which to respond after U.S. Trust notifies the Fund
of such date or time). Absent U.S. Trust's timely receipt of such instructions,
such instruments will expire without liability to U.S. Trust.
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6. RECEIPT AND DISBURSEMENT OF MONEY.
(a) U.S. Trust shall open and maintain a custody account for the
Fund (the "Account") subject only to draft or order by U.S. Trust acting
pursuant to the terms of this Agreement, and shall hold in such Account,
subject to the provisions hereof, all cash received by it from or for the
Fund. U.S. Trust shall make payments of cash to, or for the account of,
the Fund from such cash only (i) for the purchase of securities for the
Fund as provided in Paragraph 12 hereof; (ii) upon receipt of Written
Instructions, for the payment of dividends or other distributions of
shares, or for the payment of interest, taxes, administration, distribution
or advisory fees or expenses which are to be borne by the Fund under the
terms of this Agreement, any Advisory Agreement, or any administration
agreement of the Fund; (iii) upon receipt of Written Instructions for
payments in connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Fund and held by or to be
delivered to U. S. Trust; (iv) to a subcustodian pursuant to Paragraph 7
hereof; (v) for temporary short-term investment of such cash as provided in
Paragraph 10 hereof pending use of such cash for the other purposes
provided herein (referred to herein as "Excess Cash"); or (vi) upon receipt
of Written Instructions for other corporate purposes.
(b) U.S. Trust is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as
custodian for the Fund.
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7. RECEIPT OF SECURITIES.
(a) Except as provided by Paragraph 8 hereof, U.S. Trust shall
hold all securities and non-cash Property received by it for the Fund. All
such securities and non-cash Property are to be held or disposed of by U.S.
Trust for the Fund pursuant to the terms of this Agreement. In the absence
of Written Instructions accompanied by a certified resolution authorizing
the specific transaction by the Fund's Directors, U.S. Trust shall have no
power or authority to withdraw, deliver, assign, hypothecate, pledge or
otherwise dispose of any such securities and non-cash Property, except in
accordance with the express terms provided for in this Agreement. In
connection with its duties under this Paragraph 7, U.S. Trust may, at its
own expense, enter into subcustodian agreements with other banks or trust
companies for the receipt of certain securities and cash to be held by U.S.
Trust for the account of the Fund pursuant to this Agreement; provided that
each such bank or trust company has an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000) and that such bank or trust company
agrees with U.S. Trust to comply with all relevant provisions of the 1940
Act and applicable rules and regulations thereunder. U.S. Trust will be
liable for acts or omissions of any such subcustodian.
(b) Promptly after the close of business on each day, U.S. Trust
shall furnish the Fund with confirmations and a summary of all transfers to
or from the account of the Fund during said day. Where securities are
transferred to the account of the Fund established at a Securities
Depository or the Book Entry System pursuant
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to Paragraph 8 hereof, U.S. Trust shall also by book-entry or otherwise
identify as belonging to the Fund the quantity of securities that belongs
to the Fund that are part of a fungible bulk of securities registered in
the name of U.S. Trust (or its nominee) or shown in U.S. Trust's account on
the books of a Securities Depository or the Book-Entry System. At least
monthly and from time to time, U.S. Trust shall furnish the Fund with a
detailed statement of the Property held for the Fund under this Agreement.
8. USE OF SECURITIES DEPOSITORY OR THE BOOK-ENTRY SYSTEM. The Fund
shall deliver to U.S. Trust a certified resolution of the Directors of the Fund
approving, authorizing and instructing U.S. Trust on a continuous and ongoing
basis until instructed to the contrary by Written Instructions actually received
by U.S. Trust (i) to deposit in a Securities Depository or the Book-Entry System
all securities of the Fund eligible for deposit therein and (ii) to utilize a
Securities Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation, settlements of purchases and sales of securities by the Fund, and
deliveries and returns of securities collateral in connection with borrowings.
Without limiting the generality of such use, it is agreed that the following
provisions shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities
Depository or the Book-Entry System will at all times be segregated from
any assets and cash controlled by U.S. Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets held in such
capacities. U.S. Trust will effect payment for securities and receive and
deliver securities in accordance with accepted
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industry practices in the place where the transaction is settled, unless
the Fund has given U.S. Trust Written Instructions to the contrary.
(b) All books and records maintained by U.S. Trust which relate
to the Fund's participation in a Securities Depository or the Book-Entry
System will at all times during U.S. Trust's regular business hours be open
to the inspection of the Fund's duly authorized employees or agents, and
the Fund will be furnished with all information in respect of the services
rendered to it as it may require.
9. INSTRUCTIONS CONSISTENT WITH THE ARTICLES, ETC. Unless otherwise
provided in this Agreement, U.S. Trust shall act only upon Written Instructions.
U.S. Trust may assume that any Written Instructions received hereunder are not
in any way inconsistent with any provision of the Articles or By-Laws of the
Fund or any vote or resolution of the Fund's Directors, or any committee
thereof. U.S. Trust shall be entitled to rely upon any Written Instructions
actually received by U.S. Trust pursuant to this Agreement. The Fund agrees
that U.S. Trust shall incur no liability in acting upon Written Instructions
given to U.S. Trust. In accord with instructions from the Fund, as required by
accepted industry practice or as U.S. Trust may elect in effecting the execution
of Fund instructions, advances of cash or other Property made by U.S. Trust,
arising from the purchase, sale, redemption, transfer or other disposition of
Property of the Fund, or in connection with the disbursement of funds to any
party, or in payment of fees, expenses, claims or liabilities owed to U.S. Trust
by the Fund, or to any other party which has secured judgment in a court of law
against the Fund which creates an overdraft in the accounts or over-delivery of
Property shall be deemed a loan by U.S. Trust to the Fund, payable on demand,
bearing interest at such rate customarily
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charged by U.S. Trust for similar loans. The Fund agrees that test
arrangements, authentication methods or other security devices to be used with
respect to instructions which the Fund may give by telephone, telex, TWX,
facsimile transmission, bank wire or through an electronic instruction system,
shall be processed in accordance with terms and conditions for the use of such
arrangements, methods or devices as U.S. Trust may put into effect and modify
from time to time. The Fund shall safeguard any test keys, identification codes
or other security devices which U.S. Trust makes available to the Fund and
agrees that the Fund shall be responsible for any loss, liability or damage
incurred by U.S. Trust or by the Fund as a result of U.S. Trust's acting in
accordance with instructions from any unauthorized person using the proper
security device unless such loss, liability or damage was incurred as a result
of U.S. Trust's negligence or willful misconduct. U.S. Trust may electronically
record, but shall not be obligated to so record, any instructions given by
telephone and any other telephone discussions with respect to the Account. In
the event that the Fund uses U.S. Trust's Asset Management System ("AMS"), the
Fund agrees that U.S. Trust is not responsible for the consequences of the
failure of the AMS to perform for any reason, beyond the reasonable control of
U.S. Trust, or the failure of any communications carrier, utility, or
communications network. In the event the AMS is inoperable, the Fund agrees
that it will accept the communication of transaction instructions by telephone,
facsimile transmission on equipment compatible to U.S. Trust's facsimile
receiving equipment or by letter, at no additional charge to the Fund.
10. TRANSACTIONS NOT REQUIRING WRITTEN INSTRUCTIONS. U.S. Trust is
authorized to take the following action without Written Instructions:
10
(a) COLLECTION OF INCOME AND OTHER PAYMENTS. U.S. Trust shall:
(i) collect and receive for the account of the Fund, all
income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of the Fund, and promptly
advise the Fund of such receipt and shall credit such income, as
collected, to the Fund. From time to time, U.S. Trust may elect, but
shall not be so obligated, to credit the Account with interest,
dividends or principal payments on payable or contractual settlement
date, in anticipation of receiving same from a payor, central
depository, broker or other agent employed by the Fund or U.S. Trust.
Any such crediting and posting shall be at the Fund's sole risk, and
U.S. Trust shall be authorized to reverse any such advance posting in
the event U.S. Trust does not receive good funds from any such payor,
central depository, broker or agent of the Fund.
(ii) with respect to securities of foreign issuers, effect
collection of dividends, interest and other income, and to notify the
Fund of any call for redemption, offer of exchange, right of
subscription, reorganization, or other proceedings affecting such
securities, or any default in payments due thereon. It is understood,
however, that U.S. Trust shall be under no responsibility for any
failure or delay in effecting such collections or giving such notice
with respect to securities of foreign issuers, regardless of whether
or not the relevant information is published in any financial service
available to U.S.
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Trust unless such failure or delay is due to its negligence or
willful misconduct; provided that this sub-paragraph (ii) shall not be
construed as creating any such responsibility with respect to
securities of non-foreign issuers. Collections of income in foreign
currency are, to the extent possible, to be converted into United
States Dollars unless otherwise instructed in writing, and in
effecting such conversion U.S. Trust may use such methods or agencies
as it may see fit, including the facilities of its own foreign
division at customary rates. All risk and expenses incident to such
collection and conversion are for the account of the Fund, and U.S.
Trust shall have no responsibility for fluctuations in exchange rates
affecting any such conversion.
(iii) endorse and deposit for collection in the name of the
Fund, checks, drafts, or other orders for the payment of money on the
same day as received;
(iv) receive and hold for the account of the Fund all
securities received by the Fund as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued
with respect to any portfolio securities of the Fund held by U.S.
Trust hereunder;
(v) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
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(vi) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and
other negotiable instruments;
(vii) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is
changed, and to surrender securities at maturity or when advised of
earlier call for redemption, against payment therefor in accordance
with accepted industry practice. The Fund understands that U.S. Trust
subscribes to one or more nationally recognized services that provide
information with respect to calls for redemption of bonds or other
corporate actions. U.S. Trust shall not be liable for failure to
redeem any called bond or to take other action if notice of such call
or action was not provided by any service to which it subscribes
provided that U.S. Trust shall have acted in good faith without
negligence and in accordance with "Street Practice" (as is customary
in industry). U.S. Trust shall have no duty to notify the Fund of any
rights, duties, limitations, conditions or other information set forth
in any security (including mandatory or optional put, call and similar
provisions), but U.S. Trust shall forward to the Fund any notices or
other documents subsequently received in regard to any such security.
When fractional shares of stock of a declaring corporation are
received as a stock distribution, unless specifically instructed to
the contrary in writing, U.S.
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Trust is authorized to sell the fraction received and credit the
Fund's account. Unless specifically instructed to the contrary in
writing, U.S. Trust is authorized to exchange securities in bearer
form for securities in registered form. If any Property registered in
the name of a nominee of U.S. Trust is called for partial redemption
by the issuer of such Property, U.S. Trust is authorized to allot the
called portion to the respective beneficial holders of the Property in
such manner deemed to be fair and equitable by U.S. Trust in its sole
discretion.
(b) MISCELLANEOUS TRANSACTIONS. U.S. Trust is authorized to
deliver or cause to be delivered Property against payment or other
consideration or written receipt therefor in the following cases:
(i) for examination by a broker selling for the account of
the Fund in accordance with street delivery custom;
(ii) for the exchange of interim receipts or temporary
securities for definitive securities;; and
(iii) for transfer of securities into the name of the Fund
or U.S. Trust or a nominee of either, or for exchange of securities
for a different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be
delivered to U.S. Trust.
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If to the Fund: Xxxxxx Xxxxxxx Fund, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxx
If to U.S. Trust: Xx. Xxxxx Xxxxxxxxxx
Senior Vice President
U.S. Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
(c) SHORT TERM INVESTMENTS. U.S. Trust is authorized to make
temporary short-term investments of Excess Cash pursuant to the following
standing instructions:
(i) To the extent that U.S. Trust is authorized by law and
regulation as a custodian of assets of investment companies to make
temporary short-term investments on behalf of the Fund, U.S. Trust
shall invest Excess Cash in interest-bearing or income-producing
accounts, including repurchase agreement programs, accounts of U.S.
Trust, or similar accounts of like liquidity and minimal credit risk;
and
(ii) To the extent that the amount of such Excess Cash exceeds
U.S. Trust's legal authorization (referred to herein as "Above-Limit
Excess Cash"), U.S. Trust shall invest Above-Limit Excess Cash in
either (A) interest-bearing time deposits not exceeding 3 days in
duration, or (B) repurchase agreements
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with maturities of less than 3 days entered into with repurchase
agreement dealers approved by the Board of Directors of the Fund,
depending on which investment, time deposits or repurchase agreements,
would produce a higher return.
11. TRANSACTIONS REQUIRING WRITTEN INSTRUCTIONS. Upon receipt of
Written Instructions and not otherwise, U.S. Trust, directly or through the use
of a Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in
such Written Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities
may be exercised;
(b) Deliver any securities held for the Fund against receipt of
other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of
any corporation, or the exercise of any conversion privilege;
(c) Deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, against receipt of such certificates of
deposit, interim receipts or other instruments or documents as may be
issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund
and take such other steps as shall be stated in said instructions to be for
the purpose of
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effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust
company for the purpose of pledge or hypothecation to secure any loan
incurred by the Fund; provided, however, that securities shall be released
only upon payment to U.S. Trust of the monies borrowed, except that in
cases where additional collateral is required to secure a borrowing already
made, subject to proper prior authorization, further securities may be
released for that purpose; and pay such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of the note
or notes evidencing the loan;
(f) Deliver any securities held for the Fund upon the exercise of
a covered call option written by the Fund on such securities; and
(g) Deliver securities held for the Fund pursuant to separate
security lending agreements concerning the lending of the Fund's securities
into which the Fund may enter, from time to time.
12. PURCHASE OF SECURITIES. Promptly after each purchase of
securities by the Investment Adviser (or any sub-adviser), the Fund shall
deliver to U.S. Trust (as Custodian) Written Instructions specifying with
respect to each such purchase: (a) the name of the issuer and the title of the
securities, (b) the number of shares of the principal amount purchased and
accrued interest, if any, (c) the dates of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such purchase, (f)
the name of the person from whom or the broker through whom the purchase was
made and (g) the
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Investment Fund of the Fund for which the purchase was made. U.S. Trust shall
upon receipt of securities purchased by or for the Investment Fund of the Fund
pay out of the moneys held for the account of such Investment Fund of the Fund
the total amount payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the total amount payable
as set forth in such Written Instructions.
13. SALES OF SECURITIES. Promptly after each sale of securities by
the Investment Adviser, the Fund shall deliver to U.S. Trust (as Custodian)
Written Instructions, specifying with respect to each such sale: (a) the name
of the issuer and the title of the security, (b) the number of shares or
principal amount sold, and accrued interest, if any, (c) the date of sale, (d)
the sale price per unit, (e) the total amount payable to the Fund upon such
sale, (f) the name of the broker through whom or the person to whom the sale was
made and (g) the Investment Fund of the Fund for which the sale was made. U.S.
Trust shall deliver the securities upon receipt of the total amount payable to
the Fund upon such sale, provided that the same conforms to the total amount
payable as set forth in such Written Instructions. Subject to the foregoing,
U.S. Trust may accept payment in such form as shall be satisfactory to it, and
may deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
14. AUTHORIZED SHARES. The Fund has a fixed number of shares of each
class of its securities.
15. RECORDS. The books and records pertaining to the Fund which are
in the possession of U.S. Trust shall be the property of the Fund. Such books
and records shall be prepared and maintained as required by the 1940 Act; other
applicable federal and state
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securities laws and rules and regulations; and, any state or federal regulatory
body having appropriate jurisdiction. The Fund, or the Fund's authorized
representatives, shall have access to such books and records at all times during
U.S. Trust's normal business hours, and such books and records shall be
surrendered to the Fund promptly upon request. Upon reasonable request of the
Fund, copies of any such books and records shall be provided by U.S. Trust to
the Fund or the Fund's authorized representative at the Fund's expense.
16. COOPERATION WITH ACCOUNTANTS. U.S. Trust shall cooperate with the
Fund's independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their unqualified opinion, including but not limited to the
opinion included in the Fund's semiannual report on Form
N-SAR.
17. CONFIDENTIALITY. U.S. Trust agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the Fund
all records and other information relative to the Fund and its prior, present or
potential Shareholders and relative to the investment advisers and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where U.S.
Trust may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Nothing contained herein,
however, shall prohibit U.S. Trust from advertising
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or soliciting the public generally with respect to other products or services,
regardless of whether such advertisement or solicitation may include prior,
present or potential Shareholders of the Fund.
18. EQUIPMENT FAILURES. In the event of equipment failures beyond
U.S. Trust's control, U.S. Trust shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions but shall not have
liability with respect thereto. U.S. Trust shall enter into and shall maintain
in effect with appropriate parties one or more agreements making reasonable
provision for back up emergency use of electronic data processing equipment to
the extent appropriate equipment is available.
19. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF FUND. If U.S. Trust shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive,
from the Fund clarification or advice.
(b) ADVICE OF COUNSEL. If U.S. Trust shall be in doubt as to any
question of law involved in any action to be taken or omitted by U.S.
Trust, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for the Fund or U.S. Trust at the option of
U.S. Trust).
(c) CONFLICTING ADVICE. In case of conflict between directions
or advice received by U.S. Trust pursuant to subparagraph (a) of this
paragraph and advice received by U.S. Trust pursuant to subparagraph (b) of
this paragraph, U.S. Trust shall be entitled to rely on and follow the
advice received pursuant to the latter provision alone.
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(d) PROTECTION OF U.S. TRUST. U.S. Trust shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions or advice received pursuant to subparagraph (a) of this section
which U.S. Trust, after receipt of any such directions or advice, in good
faith believes to be consistent with such directions or advice. However,
nothing in this paragraph shall be construed as imposing upon U.S. Trust
any obligation (i) to seek such directions or advice, or (ii) to act in
accordance with such directions or advice when received, unless, under the
terms or another provision of this Agreement, the same is a condition to
U.S. Trust's properly taking or omitting to take such action. Nothing in
this subparagraph shall excuse U.S. Trust when an action or omission on the
part of U.S. Trust constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by U.S. Trust of its duties under this
Agreement.
20. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Fund
assumes full responsibility for insuring that the contents of each Prospectus of
the Fund comply with all applicable requirements of the 1933 Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction.
21. COMPENSATION. As compensation for the services described within
this Agreement and rendered by U.S. Trust during the term of this Agreement, the
Fund will pay to U.S. Trust, in addition to reimbursement of its out-of-pocket
expenses, monthly fees as outlined in Attachment A.
22. INDEMNIFICATION. The Fund, as sole owner of the Property, agrees
to indemnify and hold harmless U.S. Trust and its nominees from all taxes,
charges, expenses,
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assessments, claims, and liabilities (including, without limitation, liabilities
arising under the 1933 Act, the Securities Exchange Act of 1934 as amended, the
1940 Act, and any state and foreign securities and blue sky laws, all as or to
be amended from time to time) and expenses, including (without limitation)
attorney's fees and disbursements, arising directly or indirectly (a) from the
fact that securities included in the Property are registered in the name of any
such nominee or (b) without limiting the generality of the foregoing clause (a)
from any action or thing which U.S. Trust takes or does or omits to take or do
(i) at the request or on the direction of or in reliance on the advice of the
Fund given in accordance with the terms of this Agreement, or (ii) upon Written
Instructions; provided, that neither U.S. Trust nor any of its nominees or
subcustodian shall be indemnified against any liability to the Fund or to its
Shareholders (or any expenses incident to such liability) arising out of (x)
U.S. Trust's or such nominee's or subcustodian's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties under this Agreement
or any agreement between U.S. Trust and any nominee or subcustodian or (y) U.S.
Trust's own or its subcustodian's negligent failure to perform its duties under
this Agreement. In the event of any advance of cash for any purpose made by
U.S. Trust resulting from orders or Written Instructions of the Fund, or in the
event that U.S. Trust or its nominee or subcustodian shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in connection
with the performance of this Agreement, except such as may arise from its or its
nominee's or subcustodian's own negligent action, negligent failure to act,
willful misconduct, or reckless disregard of its duties under this Agreement or
any agreement between U.S. Trust and any
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nominee or subcustodian, the Fund shall promptly reimburse U.S. Trust for such
advance of cash or such taxes, charges, expenses, assessments, claims or
liabilities.
23. RESPONSIBILITY OF U.S. TRUST. U.S. Trust shall be under no duty
to take any action on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by U.S. Trust in writing. In the
performance of its duties hereunder, U.S. Trust shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy of all services performed under this
Agreement. U.S. Trust shall be responsible for its own negligent failure or
that of any subcustodian it shall appoint to perform its duties under this
Agreement but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, U.S. Trust shall not be liable for
any act or omission which does not constitute willful misfeasance, bad faith, or
gross negligence on the part of U.S. Trust or reckless disregard of such duties,
obligations and responsibilities. Without limiting the generality of the
foregoing or of any other provision of this Agreement, U.S. Trust in connection
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in respect of (a) the validity or
invalidity or authority or lack thereof of any advice, direction, notice or
other instrument which conforms to the applicable requirements of this
Agreement, if any, and which U.S. Trust believes to be genuine, (b) the validity
of the issue of any securities purchased or sold by the Fund, the legality of
the purchase or sale thereof or the propriety of the amount paid or received
therefor, (c) the legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor, (d) the legality of the
redemption of any Shares, or the propriety of the amount to be paid therefor,
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(e) the legality of the declaration or payment of any dividend or distribution
on Shares, or (f) delays or errors or loss of data occurring by reason of
circumstances beyond U.S. Trust's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown
(except as provided in Paragraph 18), flood or catastrophe, acts of God,
insurrection, war, riots, or failure of the mail, transportation systems,
communication systems or power supply.
24. COLLECTION. All collections of monies or other property in
respect, or which are to become part of the Property (but not the safekeeping
thereof upon receipt by U.S. Trust) shall be at the sole risk of the Fund. In
any case in which U.S. Trust does not receive any payment due the Fund within a
reasonable time after U.S. Trust has made proper demands for the same, it shall
so notify the Fund in writing, including copies of all demand letters, any
written responses thereto, and memoranda of all oral responses thereto, and to
telephonic demands, and await instructions from the Fund. U.S. Trust shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. U.S. Trust shall also notify the Fund as soon
as reasonably practicable whenever income due on securities is not collected in
due course.
25. DURATION AND TERMINATION. This Agreement shall be effective as of
the date hereof and shall continue until termination by the Fund or by U.S.
Trust on 90 days' written notice. Upon any termination of this Agreement,
pending appointment of a successor to U.S. Trust or a vote of the Shareholders
of the Fund to dissolve or to function without a custodian of its cash,
securities or other property, U.S. Trust shall not deliver cash, securities or
other property of the Fund to the Fund, but may deliver them to a bank or trust
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company of its own selection, having aggregate capital, surplus and undivided
profits, as shown by its last published report of not less than twenty million
dollars ($20,000,000) as a successor custodian for the Fund to be held under
terms similar to those of this Agreement, provided, however, that U.S. Trust
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by U.S. Trust or on or against U.S. Trust and
until full payment shall have been made to U.S. Trust of all of its fees,
compensation, costs and expenses, subject to the provisions of Paragraph 21 of
this Agreement.
26. NOTICES. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if to U.S. Trust, at U.S. Trust's address, 000 X.
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; (b) if to the Fund, at the address of
the Fund; or (c) if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other communication. If
the location of the sender of a Notice and the address of the addressee thereof
are, at the time of sending, more than 100 miles apart, the Notice may be sent
by first-class mail, in which case it shall be deemed to have been given three
days after it is sent, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately,
and, if the location of the sender of a Notice and the address of the addressee
thereof are, at the time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given two days after it is sent, or if sent by messenger, it shall be deemed to
have been given on the day it is
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delivered, or if sent by confirming telegram, cable, telex or facsimile sending
device, it shall be deemed to have been given immediately. All postage, cable,
telegram, telex and facsimile sending device charges arising from the sending of
a Notice hereunder shall be paid by the sender.
27. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
28. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
29. MISCELLANEOUS. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the parties hereto. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and the year first
above written.
XXXXXX XXXXXXX FUND, INC.
ATTEST:/s/ Xxxxxxx X. Xxxxx BY /s/ Xxxxxx X. Xxxxx
------------------------- --------------------------
NAME:
-----------------------
TITLE:
----------------------
UNITED STATES TRUST COMPANY
OF NEW YORK
ATTEST: /s/ Xxxxxxxxxx Xxxxxx BY /s/ Xxxxx X. Xxxxxxxxxx
------------------------- --------------------------
XXXXX X. XXXXXXXXXX
NAME: SENIOR VICE PRESIDENT
-----------------------
U.S. TRUST CO. OF NEW YORK
TITLE: 000 XXXXXXXX
-----------------------
XXX XXXX, XX 00000
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