Exhibit 8(h)
CUSTODIAN AGREEMENT
AGREEMENT made as of this 28th day of February, 1991, between Xxxxxxx
Global Fund, Inc. on behalf of the Xxxxxxx Short Term Global Income Fund series
(the "Fund") and Xxxxx Brothers Xxxxxxxx & Co. (the "Custodian")
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. The Fund hereby employs and appoints the Custodian as a custodian for
the term and subject to the provisions of this Agreement. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund as may be issued or sold from time to time.
The Custodian shall not be under any duty or obligation to require the Fund
to deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Articles of
Incorpora-
tion and By-Laws (or comparable documents) of the Fund and all amendments
thereto, and copies of such votes an other proceedings of the Fund as may be
necessary for or convenient to the Custodian in the performance of its duties.
It is understood that as used in this Agreement, the term "securities"
shall include futures contracts and options.
2. Except for securities and funds held by subcustodians appointed pursuant
to the provisions of Section 3 hereof, the Custodian shall have and perform the
following powers and duties:
A. Safekeeping - To keep safely the securities of the Fund that have been
delivered to the Custodian a from time to time to receive delivery of securities
for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form or of the broker's receipts or
confirmations for futures contracts, options and similar securities, or (2) in
book-entry form by a Securities System (as said term is defined in Section 2V).
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C. Registered Name; Nominee - To hold registered securities of the Fund (1)
in the name or any nominee name of the Custodian or the Fund, or in the name or
any nominee name of any agent appointed pursuant to Section 6E, or (2) in street
certificate form, so-called, and in any case with or without any indication of
fiduciary capacity.
D. Purchases - Upon receipt of proper instructions, and insofar as funds
are available for the purpose, to pay for and receive securities purchased for
the account of the Fund, payment being made only upon receipt of the securities
(1) by the Custodian, or (2) by a clearing corporation of a national securities
exchange of which the Custodian is a member, or (3) by a Securities System.
However, (i) in the case of repurchase agreements entered into by the Fund, the
Custodian (as well as a Subcustodian or an Agent, as defined in Section 2G) 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 defined in Section 2V) of
the Custodian (or such Subcustodian or Agent) maintained with such Securities
System, and (ii) in the case of futures contracts, options and similar
securities
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or time deposits, call account deposits, currency deposits, and other deposits
pursuant to Sections 2M, 2N and 2O, the Custodian may make payment therefor
without receiving an instrument evidencing said contract, option, security or
deposit.
E. Exchanges - Upon receipt of proper instructions, to 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, and to deposit any such securities in accordance with
the terms or any reorganization or protective plan. Without such instructions,
the Custodian may surrender securities in temporary form for definitive
securities, may surrender securities for transfer into a name or nominee name as
permitted in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified
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check, bank cashier's check, bank credit, or bank wire transfer, or (2) by
credit to the account of the Custodian with a clearing corporation of a national
securities exchange of which the Custodian is a member or (3) by credit to the
account of the Custodian or an Agent of the Custodian with a Securities System.
G. Depositary Receipts - Upon receipt of proper instructions, to instruct a
subcustodian appointed pursuant to Section 3 hereof (a "Subcustodian") or an
agent of the Custodian appointed pursuant to Section 6E hereof (an "Agent") to
surrender securities to the depositary used by an issuer of American Depositary
Receipts or International Depositary Receipts (hereinafter collectively referred
to as "ADRs") for such securities against a written receipt therefor adequately
describing such securities and written evidence satisfactory to the Subcustodian
or Agent that the depositary has acknowledged receipt of instructions to issue
with respect to such securities ADRs in the name of the Custodian, or a nominee
of the Custodian, for delivery to the Custodian in Boston, Massachusetts, or at
such other place as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt
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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 depositary to deliver the securities
underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon receipt of proper instructions,
to deliver to the issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, futures contracts, options, rights or similar securities
for the purpose of being exercised or sold, provided that the new securities and
cash, if any, acquired by such action are to be delivered to the Custodian, and,
upon receipt of proper instructions, to deposit securities upon invitations for
tenders of securities, provided that the consideration is to be paid or
delivered or the tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase or writing of an option
on
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a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with a notice
or other communication evidencing the expiration, termination or exercise of
such covered option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options transactions.
K. Futures Contracts - Upon receipt of proper instructions, to receive and
retain confirmations evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; to deposit and maintain in a
segregated account, for the benefit of any futures commission merchant, assets
designated by the Fund 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 any agreement or agreements among any
of the Fund, the Custodian and such
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futures commission merchant, designed to comply with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding such margin deposits; and to release
and/or transfer assets in such margin accounts only in accordance with any such
agreements or rules.
L. Borrowings - Upon receipt of proper instructions, to deliver securities
of the Fund to lenders or their agents as collateral for borrowings effected by
the Fund, but only against receipt of the amounts borrowed, provided that if
such collateral is held in book-entry form by a Securities System (as defined in
2V), such collateral may be transferred by book entry to such lender or its
agent against receipt by the Custodian of an undertaking by such lender to pay
such borrowed money to or upon the Custodian's order on the next business day
following such transfer of collateral.
M. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the
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Fund for deposits accepted on the Custodian's books shall be that of a U.S. bank
for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) shall be in the name of the
Custodian for account of the Fund and subject only to the Custodian's draft or
order. Such accounts may be opened with Banking Institutions in the United
States and in other countries and may be denominated in either U.S Dollars or
other currencies as the Fund may determine. All such deposits shall be deemed to
be portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
N. Interest Bearing Call or Time Deposits - To place interest bearing fixed
term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other
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Banking Institutions as the Fund may determine. Deposits may be denominated in
U.S. Dollars or other currencies and need not be evidenced by the issuance or
delivery of a certificate to the Custodian, provided that 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 deposit, the accepting
Banking Institution, and other appropriate details. Such deposits, other than
those placed with the Custodian, shall be deemed portfolio securities of the
Fund and the responsibilities of the Custodian therefor shall be the same as
those for demand deposit bank accounts placed with other banks, as described in
the second paragraph of Section 2M of this Agreement. The responsibility of the
Custodian for such deposits accepted on the Custodian's books shall be that of a
U.S. bank for a similar deposit.
O. Foreign Exchange Transactions - Pursuant to proper instructions, to
enter into foreign exchange contracts to purchase arid sell foreign currencies
for spot and future delivery on behalf and for the account of the Fund, and in
connection therewith to receive and retain receipts, confirmations or other
documents evidencing such contracts and to deposit and maintain cash or
designated securities in a segregated account and to release
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and/or transfer assets held in such account only in accordance with such proper
instructions. Such transactions may be undertaken by the Custodian with such
Banking Institutions, including the Custodian and Subcustodian(s) as principals,
as approved and authorized by the Fund. Foreign exchange contracts, other than
those executed with the Custodian, shall be deemed to be portfolio securities of
the Fund and the responsibilities of the Custodian therefor shall be the same as
those for demand deposit bank accounts placed with other banks as described in
the second paragraph of Section 2M of this Agreement.
P. Stock Loans - Upon receipt of proper instructions, to deliver securities
of the Fund, in connection with loans of securities by the Fund, to the borrower
thereof but only against receipt of such collateral as the Fund shall instruct;
except that in connection with any loans for which collateral is to be credited
to the Custodian's Account in a book-entry system referred to in Section 2V(ii)
hereof, the Custodian may deliver securities prior to the credit of such
collateral, provided that the Custodian shal1 promptly notify the Fund if such
collateral is not credited.
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Q. Collections - To collect, receive and deposit in the account or accounts
referred to in Section 2M all income and other payments with respect to the
securities held hereunder, and to execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund or in connection
with transfer of securities, and pursuant to proper instructions to take other
actions, which involve an investment decision, with respect to collection or
receipt of funds or transfer of securities.
R. Dividends, Distributions and Redemption - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing
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Agent (given by such person or persons and in such manner on behalf of the
Shareholder Servicing Agent as the Fund shall have authorized), the Custodian
shall release funds or securities, insofar as available, to the Shareholder
Servicing Agent or as such Agent shall otherwise instruct for payment to the
Fund shareholders who have delivered to such Agent a request for repurchase or
redemption of their shares of capital stock of the Fund.
S. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and 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, and upon receipt of proper instruction, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are
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available for the purpose, bills, statements, or other obligations of the Fund.
U. Nondiscretionary Details - Without the necessity of express
authorization from the Fund (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
Custodian except as otherwise directed from time to time by the Board of
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
V. Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CRF Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart O, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section l7A of the Securities Exchange Act of 1934 which acts
as a
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securities depository and whose use the Fund has previously approved in writing
(each of the foregoing being referred to in this Agreement as a "Securities
System"). Utilization of a Securities System shall be in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission rules
and regulations, if any, and subject to the following provisions:
(1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided
that any such Agent shall be qualified to act as a custodian of the Fund
pursuant to the Investment Company Act of 1940 and the rules and
regulations thereunder), in a Securities System provided that such
securities are represented in an account ("Account") of the Custodian or
such Agent in the Securities System which shall not include any assets of
the Custodian or Agent other than assets held as a fiduciary, custodian, or
otherwise for customers;
(2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by book
entry those securities belonging to the Fund;
15
(3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, 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 upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred to the
Account, and (ii) 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 of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for the Fund by
the Custodian or an Agent as referred to above, and be provided to the Fund
at its request. The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written advice
or notice and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the
16
Securities System for the account of the Fund on the next business day;
(4) The Custodian shall provide the Fund with any report obtained by
the Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System; and the
Custodian and such Agents shall send to the Fund such reports on their own
systems of internal accounting control as the Fund may reasonably request
from time to time; and
(5) At the written request of the Fund, the Custodian will terminate
the use of any such Securities System on behalf of the Fund as promptly as
practicable.
W. Other Transfers - To deliver securities, funds and other property of the
Fund to a Subcustodian or another custodian of the Fund; and, upon receipt of
proper instructions, to make such other disposition of securities, funds or
other property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall include a statement of the purpose for which the
delivery is to be
17
made, the amount of securities to be delivered and the name of the person or
persons to whom delivery is to be made.
X. Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Articles of
Incorporation or By-Laws (or comparable documents) or votes or proceedings of
the shareholders or directors of the Fund. The Custodian shall in no event be
liable to the Fund and shall be indemnified by the Fund for any violation of any
investment limitations to which the Fund is subject or other limitations with
respect to the Fund's powers to make expenditures; encumber securities, borrow
or take similar actions affecting its portfolio.
Y. Proper Instructions - Proper instructions shall mean a tested telex from
the Fund or a written request, direction, instruction or certification signed or
initialled on behalf of the Fund by one or more person or persons as the Board
of Directors of the Fund shall
18
have from time to time authorized, provided, however, that no such instructions
directing the delivery of securities or the payment of funds to an authorized
signatory of the Fund shall be signed by such person. Those persons authorized
to give proper instructions may be identified by the Board of Directors by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions given by any one of
the above persons will be considered proper instructions if the Custodian
reasonably believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
directors, employees or agents) and will deliver to the Custodian a similar
authorization from any investment manager or adviser or person or entity with
similar
19
responsibilities which is authorized to give proper instructions on behalf of
the Fund to the Custodian. Proper instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form of
standing instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree in writing to the use of
such device or system.
3. Securities, funds and other property of the Fund may be held by
subcustodians appointed pursuant to the provisions of this Section 3 (a
"Subcustodian"). The Custodian may, at any time and from time to time, appoint
any bank or trust company (meeting the requirements of a custodian or a foreign
custodian under the Investment Company Act of 1940 and the rules and regulations
thereunder) to act as a Subcustodian for the Fund, provided that the Fund shall
have approved in writing (1) any such bank or trust company and the subcustodian
agreement to be entered into between such bank or trust company and the
Custodian, and (2) the Subcustodian's offices or branches at which the
Subcustodian is authorized to hold securities, cash and other property of the
Fund. Upon
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such approval by the Fund, the Custodian is authorized on behalf of the Fund to
notify each Subcustodian of its appointment as such. The Custodian may, at any
time in its discretion, remove any bank or trust company that has been appointed
as a Subcustodian.
Those Subcustodians, their offices or branches which the Fund has approved
to date are set forth on Appendix A hereto. Such Appendix shall be amended from
time to time as Subcustodians, branches or offices are changed, added or
deleted. The Fund shall be responsible for informing the Custodian sufficiently
in advance of a proposed investment which is to be held at a location not listed
on Appendix A, in order that there shall be sufficient time for the Fund to give
the approval required by the preceding paragraph and for the Custodian to put
the appropriate arrangements in place with such Subcustodian pursuant to such
subcustodian agreement.
If the Fund shall have invested in a security to be held in a location
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint unless and until the Fund shall
instruct the Custodian to move the security into the possession of the Custodian
or a Subcustodian. In any event, the Custodian shall be liable to the Fund
21
for the actions of such agent if and only to the extent the Custodian shall have
recovered from such agent for any damages caused the Fund by such agent.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, including demand and interest bearing deposits,
currencies or other deposits and foreign exchange contracts as referred to in
Sections 2M, 2N or 2O, the Custodian shall be liable to the Fund if and only to
the extent that such Subcustodian is liable to the Custodian and the Custodian
recovers under the applicable subcustodian agreement. The Custodian shall
nevertheless be liable to the Fund for its own negligence in transmitting any
instructions received by it from the Fund and for its own negligence in
connection with the delivery of any securities or funds held by it to any such
Subcustodian. In the event that any Subcustodian appointed pursuant to the
provisions of this Section 3 fails to perform any of its obligations under the
terms and conditions of the applicable subcustodian agreement, the Custodian
shall use its best efforts to cause such Subcustodian to perform such
obligations. In the event that the Custodian is unable to cause such
Subcustodian to perform fully its obligations thereunder, the Custo-
22
xxxx shall forthwith upon the Fund's request terminate such Subcustodian and, if
necessary or desirable, appoint another subcustodian in accordance with the
provisions of this Section 3. At the election of the Fund, it shall have the
right to enforce, to the extent permitted by the subcustodian agreement and
applicable law, the Custodian's rights against any such Subcustodian for loss or
damage caused the Fund by such Subcustodian.
At the written request of the Fund, the Custodian will terminate any
Subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
In the event the Custodian intends to make any payment to a Subcustodian
under the indemnification provisions of any subcustodian agreement, the
Custodian shall give the Fund written notice of such intention no less than
thirty (30) days prior. to the date such payment is to be made. The Fund shall
be obligated promptly to reimburse the Custodian the amount of such payment,
unless the Fund shall, within thirty (30) days of receipt
23
of the Custodian's notice, object in writing to such payment to the Subcustodian
or to reimbursement of the Custodian (i) because the Fund disputes the right of
the Subcustodian to be so indemnified or (ii) because the Fund believes that the
Custodian was or might have been responsible by reason of the Custodian's
negligence or misconduct for the event or occurrence giving rise to the
Subcustodian's demand for indemnification. In the event the Fund, at the
direction of its Board of Directors or any Executive Committee thereof, shall
give written notice of such objection and the reasons therefor, the Custodian
may nevertheless make such payment to the Subcustodian, but without prejudice to
the Fund's right to refuse to reimburse the Custodian if the Fund's objection
under clause (i) or (ii) above shall be upheld in an appropriate judicial or
other proceeding; or in the alternative, the Custodian may refuse to pay the
indemnification demanded by the Subcustodian and the Custodian shall in such
event defend against any judicial or other proceeding brought against the
Custodian by the Subcustodian to obtain such indemnification. Such defense shall
be conducted by counsel reasonably satisfactory to both the Fund and the
Custodian. The Fund shall be entitled to participate in any such proceeding with
24
separate counsel of its own choice if it believes its position might otherwise
be compromised and, if the Fund or the Custodian believes there may be a
conflict in the respective positions of the Fund and the Custodian, then each
may retain separate counsel of its own choice. The Fund shall bear the costs and
expenses of defending against the Subcustodian's claim, and the Fund shall
indemnify the Custodian and hold it harmless from all claims, liabilities,
judgments, costs and expenses (including counsel fees) and settlements of such
claim (provided that such settlement shall have been effected with the Fund's
written consent) incurred or assessed against the Custodian. Notwithstanding the
foregoing, if it shall be determined in an appropriate proceeding, including in
a proceeding as aforesaid brought by the Subcustodian, that, although the
Subcustodian was entitled to indemnification the Custodian was not entitled to
reimbursement by the Fund because the Custodian was responsible by reason of its
negligence or misconduct for the occurrence or event giving rise to the
Subcustodian's right to indemnification, then in such event the Fund shall not
be obligated to indemnify the Custodian as aforesaid and the Custodian shall
reimburse the Fund for any amounts paid by the Fund to the Custodian in respect
25
of the costs and expenses of defending against the Subcustodian's claim.
4. The Custodian may assist generally in the preparation of reports to Fund
shareholders, regulatory authorities and others, audits of accounts, and other
ministerial matters of like nature.
5. The Fund hereby also appoints the Custodian as its financial agent. With
respect to the appointment as financial agent, the Custodian shall have and
perform, the following powers and duties:
A. Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-l and 31a-2 thereunder) and under
applicable Federal and State tax laws and administrative regulations. All such
records will be the property of the Fund and in the event of termination of this
Agreement shall be delivered to the successor custodian.
B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from
26
time to time as reasonably requested by proper instructions.
C. Access to Records - Subject to security requirements of the Custodian
applicable to its own employees having access to similar records within the
Custodian and such regulations as may be reasonably imposed by the Custodian,
the books and records maintained by the Custodian pursuant to Sections 5A and 5B
shall be open to inspection and audit at reasonable times by officers of,
attorneys for, and auditors employed by, the Fund.
D. Calculation of Net Asset Value - To compute and determine the net asset
value per share of capital stock of the Fund as of the close of business on the
New York Stock Exchange on each day on which such Exchange is open, unless
otherwise directed by proper instructions. Such computation and determination
shall be made in accordance with (1) the provisions of the By-Laws of the Fund,
as they may from time to time be amended and delivered to the Custodian, (2) the
votes of the Board of Directors of the Fund at the time in force and applicable,
as they may from time to time be delivered to the Custodian, and (3) proper
instructions from such officers of the Fund or other persons as are from time to
time authorized by the Board of Directors of the Fund to give
27
instructions with respect to computation and determination of the net asset
value. On each date that the Custodian shall compute the net asset value per
share of the Fund, the Custodian shall provide the Fund with written reports
which permit the Fund to verify that portfolio transactions have been recorded
in accordance with the Fund's instructions.
In like manner, the Custodian shall compute and determine the net asset
value as of such other times as the Board of Directors of the Fund from time to
time may reasonably request.
E. Disbursements - Upon receipt of proper instructions, to pay or cause to
be paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, advisory fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. A. The Custodian shall not be liable for any action taken or omitted in
reliance upon proper instructions reasonably believed by it to be genuine or
upon any other written notice, request, direction, instruction, certificate or
other instrument believed by it to be genuine and signed by the proper party or
parties.
28
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instructions, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or shareholders. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
the Custodian shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
29
B. With respect to the portfolio securities, cash and other property of the
Fund held by a Securities System, the Custodian shall be liable to the Fund for
and loss or damage to the Fund resulting from use of the Securities System if
caused by any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage if and to the extent that the Fund
has not been made whole for any such loss or damage. The Custodian shall be
subject to the same responsibility with respect to all securities of the Fund,
and all cash, stock dividends, rights and items of like nature to which the Fund
is entitled, held or received by such Securities System, as if the same were
held or received by the Custodian at its own office.
C. Except as may otherwise be set forth in this Agreement with respect to
particular matters, the Custodian shall be held only to the exercise of reason-
30
able care and diligence in carrying out the provisions of this Agreement,
provided that the Custodian shall not thereby be required to take any action
which is in contravention of any applicable law. The Fund agrees to indemnify
and hold harmless the Custodian and its nominees from all claims and liabilities
(including counsel fees) incurred or assessed against it or its nominees in
connection with the performance of this Agreement, except such as may arise from
its or its nominees breach of the relevant standard of conduct set forth in this
Agreement. Without limiting the foregoing indemnification obligation of the
Fund, the Fund agrees to indemnify the Custodian and its nominees against any
liability the Custodian or such nominee may incur by reason of taxes assessed to
the Custodian or such nominees or other costs, liability or expense incurred by
the Custodian or such nominee resulting directly or indirectly from the fact
that portfolio securities or other property of the Fund are registered in the
name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, an agent of the Custodian or a
Subcustodian, a Securities System or a
31
Banking Institution, or a loss arising from a foreign currency transaction or
contract, resulting from a Sovereign Risk. 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; or any other similar act or event beyond
the Custodian's control.
D. The Custodian shall be entitled to receive reimbursement from the Fund
on demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Subcustodian or
any Agent) in connection with this Agreement, but excluding salaries and usual
overhead expenses.
E. The Custodian may at any time or times in its discretion appoint (and
may at any time remove) any other bank or trust company as its agent (an
"Agent") to carry out such of the provisions of this Agreement as the Custodian
may from time to time direct, provided, how-
32
ever, that the appointment of such Agent (other than an Agent appointed pursuant
to the third paragraph of Section 3) shall not relieve the Custodian of any of
its responsibilities under this Agreement.
F. Upon request, the Fund shall 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.
7. The Fund shall pay the Custodian a custody fee based on such fee
schedule as may from time to time be agreed upon in writing by the Custodian and
the Fund. Such fee, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 6D, shall be billed to the Fund in such a
manner as to permit payment either by a direct cash payment to the Custodian or
by placing Fund portfolio transactions with the Custodian resulting in an
agreed-upon amount of commissions being paid to the Custodian within an
agreed-upon period of time.
8. This Agreement shall continue in full force and effect until terminated
by either party by an instrument in writing delivered or mailed, postage
prepaid, to
33
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing. In the event of termination the
Custodian shall be entitled to receive prior to delivery of the securities,
funds and other property held by it all accrued fees and unreimbursed expenses
the payment of which is contemplated by Sections 6D and 7, upon receipt by the
Fund of a statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed that
the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. This Agreement constitutes the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof. No provision of this
Agreement may be amended or terminated except by a statement in writing signed
by the party against which enforcement of the amendment or termination is
sought.
34
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.
10. This instrument is executed and delivered in The Commonwealth of
Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to the Fund at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or to
such other address as the Fund may have designated to the Custodian in writing,
or to the Custodian at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. This Agreement shall be binding on and shall inure to the benefit of
the Fund and the Custodian
35
and their respective successors and assigns, provided that neither party hereto
may assign this Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party.
13. 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.
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 GLOBAL FUND, INC. XXXXX BROTHERS XXXXXXXX & CO.
on behalf of Xxxxxxx Short
Term Global Income Fund
By______________________________ By_________________________________
36
