EX-99.B(g)vlca
CUSTODIAN AGREEMENT
Dated as of November 15, 2000
Between
UMB BANK, n.a.
and
XXXXXXX & XXXX ADVISORS VALUE FUND, INC.
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 Instruction 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
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 15th day of November, 2000 between Xxxxxxx &
Xxxx Advisors Value Fund, Inc. (the "Fund") 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) any Domestic Subcustodian so appointed and which has been
designated as a Foreign Custody Manager (as such term is defined in Rule 17f-5
of the 0000 Xxx) by the Custodian and approved by the Fund's board ("Approved
Foreign Custody Manager") may appoint a Foreign Sub-Subcustodian or Interim
Sub-Subcustodian (as each are hereinafter defined) in accordance with this
Article IV; provided that the Fund's board also has approved the agreement
between the Custodian and the Foreign Custody Manager specifying the Foreign
Custody Manager's duties ("Delegation Agreement"). 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 and the securities depositories and
clearing agencies 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. A Domestic Subcustodian which is an
Approved Foreign Custody Manager, or the Domestic Subcustodian, may appoint
any (1)(a) "Qualified Foreign Bank" (as such term is defined in Rule 17f-5)
meeting the requirements of an "Eligible Foreign Custodian" (as such term is
defined in Rule 17f-5) or by SEC order exempt therefrom; (b) majority-owned
direct or indirect subsidiary of a "U.S. bank" (as such term is defined in
Rule 17f-5) or bank holding company meeting the requirements of an Eligible
Foreign Custodian or exempt by SEC order therefrom; or (c) any bank (as such
term is defined in Section 2(a)(5) of the 0000 Xxx) meeting the requirements
of a custodian under Section 17(f) of the 1940 Act and the rules and
regulations thereunder (each a "Foreign Sub-Subcustodian") or (2) any
"Securities Depository" (as such term is defined in Rule 17f-5) or clearing
agency meeting the requirements of an Eligible Foreign Custodian or exempt by
SEC order therefrom ("Securities Depositories and Clearing Agencies"),
provided that the Foreign Custody Manager's appointments of such Eligible
Foreign Custodians shall at all times be governed by the Delegation Agreement,
except that the Fund's investment adviser, Xxxxxxx & Xxxx Investment
Management Company, shall be responsible for the appointment of a compulsory
depository, as applicable.
(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 Foreign Custody Manager has not appointed an Eligible
Foreign Custodian, the Custodian shall, or shall cause the Domestic
Subcustodian 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 Domestic Subcustodian to, appoint or approve any Person (as
hereinafter defined) designated by the Fund in such Special Instructions, to
hold such security or other Asset. (Any Person appointed or approved as a
sub-subcustodian pursuant to this Section 4.02(b) is hereinafter referred to
as an "Interim Sub-Subcustodian.")
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 Domestic
Subcustodian that has been approved as a 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 and the Securities Depositories and Clearing Agents through which each
such 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.
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, Securities Depository or Clearing
Agency 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); (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian unless in each case, such delay or
nonperformance is caused by the negligence, misfeasance or misconduct of the
Custodian; or (iii) any "Sovereign Risk", which for the purpose of this
Agreement 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, civil
commotion, nuclear fission or fusion or radioactivity.
(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 Securities Depository or Clearing
Agency 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, Securities Depository or Clearing
Agency 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, Securities Depository
or Clearing Agency 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
Delegation Agreement Article IV
Distribution Account 2.16
Domestic Subcustodian 4.01
Eligible Foreign Custodian 4.02(a)
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 Depositories and Clearing Agencies 4.02(a)
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 constitutes the
entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and accordingly, supersedes 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 Value Fund, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Fund Treasurer
Telephone: 000-000-0000
Telefax: 913-236-1595
(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 ADVISORS
VALUE FUND, INC. UMB BANK, n.a.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
--------------------------- ------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxxx
Title: Vice President Title: Senior Vice President
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
XXXXXXX & XXXX ADVISORS VALUE FUND, INC.
AND
UMB BANK, N.A.
Dated as of November 15, 2000
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. and W&R Funds, Inc.
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:
.00005 for the first $5,000,000,000 of the net assets of all the Advisors
Funds, plus
.00004 for any net assets exceeding $5,000,000,000 of the assets of all
the Advisors Funds.
B. Portfolio Transaction Fees (billed to each Fund):
(a) For each portfolio transaction* processed through a
Depository (DTC, PTC or Fed) $ 7.00
(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 $ 6.00
(e) For each interfund note transaction $ 5.00
* 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 .0037 $85
Australia .0009 $85
Austria .0011 $70
Xxxxxxx .0000 $60
Brazil .0035 $60
Canada .0008 $35
Chile .0045 $85
China .0045 $75
Czech Republic .0055 $135
Denmark .0011 $60
Finland .0011 $85
France .0011 $85
Germany .0008 $60
Hong Kong .0009 $85
Hungary .0065 $210
India .0055 $135
Indonesia .0009 $85
Xxxxxxx .0000 $60
Israel .0035 $160
Italy .0011 $70
Japan .0008 $40
Korea .0035 $60
Malaysia .0009 $85
Mexico .0016 $60
Netherlands .0011 $35
New Zealand .0009 $85
Xxxxxx .0000 x00
Xxxx .0070 $160
Philippines .0035 $95
Poland .0060 $110
Portugal .0035 $145
Singapore .0009 $85
Spain .0009 $85
Sweden .0011 $70
Xxxxxxxxxxx .0000 $85
Taiwan .0035 $85
Thailand .0009 $85
Turkey .0045 $110
U.K. .0011 $60
Segregated Account Fee: $175 monthly charge per fund holding foreign
assets.
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 Xxxxx Brothers Xxxxxxxx &
Co.):
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.
C. Short-term Dollar Denominated Global Assets
Eurodollar CDs, Time Deposits:
(1) 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 the
Fund based upon its portion of short-term dollar denominated
assets), at the annual rate of:
.0004 on all short-term dollar denominated assets of the Advisors
Funds.
(2) Portfolio Transaction Fees:
First Chicago Clearing Centre-Trades with Members $136.00
First Chicago Clearing Centre-Trades with Non-members $153.00
First Chicago Clearing Centre-Income Collection $ 64.00
D. Euroclear Eligible Issues:
(1) 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 the
Fund based upon its portion of Euroclear issues), at the annual rate
of:
2.5 basis points on all Advisors Funds Euroclear assets held in
account at UMB Bank, n.a.
(2) Portfolio Transaction Fees:
Euroclear $60.00
SUBCUSTODIAN LIST
PURSUANT TO CUSTODIAN AGREEMENT
BETWEEN
XXXXXXX & XXXX ADVISORS VALUE FUND, INC.
AND
UMB BANK, n.a.
Dated as of November 15, 2000
This Subcustodian List relates to the Custodian Agreements between UMB
Bank, n.a. and each of the following funds dated the date specified by the
fund's name, as subsequently amended and restated:
Fund Date
Xxxxxxx & Xxxx Advisors Asset Strategy Fund, Inc.(1) Feb. 22, 1995
Xxxxxxx & Xxxx Advisors Cash Management, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Continental Income Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Funds, Inc.
Advisors Bond Fund Nov. 26, 1991
Advisors Core Investment Fund (formerly, Income Fund) Nov. 26, 1991
Advisors Accumulative Fund Nov. 26, 1991
Advisors Science and Technology Fund Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Government Securities Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors High Income Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Global Bond Fund, Inc. Nov. 26, 1991
(formerly, Xxxxxxx & Xxxx Advisors High Income Fund II, Inc.)
Xxxxxxx & Xxxx Advisors International Growth Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Municipal Bond Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Municipal High Income Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Municipal Money Market Fund, Inc. Nov. 15, 2000
Xxxxxxx & Xxxx Advisors New Concepts Fund, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Retirement Shares, Inc. Nov. 26, 1991
Xxxxxxx & Xxxx Advisors Small Cap Fund, Inc. Aug. 18, 1999
Xxxxxxx & Xxxx Advisors Tax-Managed Equity Fund, Inc. Feb. 25, 2000
Xxxxxxx & Xxxx Advisors Value Fund, Inc. Nov. 15, 2000
Xxxxxxx & Xxxx Advisors Vanguard Fund, Inc. Nov. 26, 1991
W&R Target Funds, Inc.(2)
High Income Portfolio Nov. 26, 1991
Money Market Portfolio Nov. 26, 1991
Bond Portfolio Nov. 26, 1991
Core Equity Portfolio (formerly, Income Portfolio) Nov. 26, 1991
Growth Portfolio Nov. 26, 1991
Balanced Portfolio April 29, 1994
International Portfolio April 29, 1994
Limited-Term Bond Portfolio April 29, 1994
Small Cap Portfolio April 29, 1994
Asset Strategy Portfolio May 1, 1995
Science and Technology Portfolio April 4, 1997
W&R Funds, Inc.(3)
Core Equity Fund (formerly, Total Return Fund) April 24, 1992
Municipal Bond Fund April 24, 1992
Limited-Term Bond Fund April 24, 1992
International Growth Fund April 24, 1992
Small Cap Growth Fund April 24, 1992
Asset Strategy Fund April 20, 1995
High Income Fund July 31, 1997
Science and Technology Fund July 31, 1997
Large Cap Growth Fund May 17, 2000
Mid Cap Growth Fund May 17, 2000
Money Market Fund May 17, 2000
Tax-Managed Equity Fund May 17, 2000
(1) Each of the Xxxxxxx & Xxxx Advisors Funds was a United fund, except for
Xxxxxxx & Xxxx Advisors Municipal Money Market Fund, Inc. and Xxxxxxx &
Xxxx Advisors Value Fund, Inc.
(2) Formerly, Target/United Funds, Inc.
(3) Formerly, Xxxxxxx & Xxxx Funds, Inc.
The following is a list of Domestic Subcustodians, Foreign Subcustodians and
Special Subcustodians under the Custodian Agreement as amended:
A. Domestic Custodians:
Xxxxx Brothers Xxxxxxxx & Co.
United Missouri Trust Company of New York
B. Foreign Sub-Custodians
Country Sub-Custodian Depository
Argentina Citibank, n.a. CDV; CRYL
Australia National Australia Bank Ltd. AUSTRACLEAR, RITs
Austria Creditanstalt Bankverein KONTROLLBANK (OEKB)
Belgium Banque Bruxelles Xxxxxxx CIK, BNB
Brazil First National Bank of Boston, BOVESPA, CLC
Brazil
Canada Canadian Imperial Bank of Commerce CDS; The Bank of
Canada
Chile Citibank, n.a. None
China Standard Chartered Bank SSCCRC; SSCC
Czech Republic Ceskoslovenska Obchodni CNB; SCP
Banka A.S.
Denmark Den Danske Bank VP
Finland Xxxxxx Securities
Association;
Finnish Central
Securities
Depository Ltd.
France Banque Indosuez SICOVAM; Banque de
France
Germany Deutsche Bank KASSENVEREIN
Hungary Citibank, N.A. KELER Ltd.
Hong Kong HongKong & Shanghai Banking Corp. HongKong Securities
Clearing Company
India Citibank, N.A., Mumbai National Securities
Depository Limited
Indonesia Citibank, n.a. None
Ireland Allied Irish Banks PLC Gilt Settlement
Office
Israel Bank Hapoalim X.X. XXXX Clearinghouse
Ltd.
Italy Banca Commerciale Italiana MONTE TITOLI, Banca
D'Italia
Japan The Bank of Tokyo, Ltd. JASDEC, Bank of
Japan
Korea Citibank, n.a. Korean Securities
Depository
Corporation (KSD)
Malaysia Hong Kong Bank Malaysia Berhad MCD; Bank Negara
Malaysia
Mexico Citibank Mexico, s.a. INDEVAL; Banco De
Mexico
Netherlands ABN - Amro Bank NECIGER; De
Nederlandsche Bank
Norway Christiana Bank VPS
Peru Citibank, n.a. Caja De Valores
(CAVAL)
Philippines Citibank, n.a. Phillipines Central
Depository, Inc.
Poland Bank Polska Kasa Opieki S.A. NPB
Portugal Banco Espirito Santo E Comercial Interbolsa
De Lisboa
Singapore HongKong & Shanghai Banking Corp. CDP
Spain Banco Santander SCLV; Banco De
Espana
Sweden Skandinaviska Enskilda Banken VPC
Switzerland Union Bank of Switzerland SEGA
Taiwan Standard Chartered Bank, Taipei TSCD
Thailand HongKong & Shanghai Banking Corp. Share Depository
Center (SDC)
Turkey Citibank, n.a. TvS, Central Bank of
Turkey
United Kingdom Midland Securities PLC CMO; CGO; CrestCo
C. Special Subcustodians:
Republic National Bank of New York
The Bank of New York, n.a.
