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EXHIBIT 99.(G)
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of June, 17, 2000, between HOTCHKIS AND WILEY
FUNDS, an open-end management investment company organized under the laws of the
Commonwealth of Massachusetts and registered with the Commission under the 1940
Act (the FUND) on behalf of each of the portfolios listed on the attached
Appendix "C" as the same may be amended from time to time (each a FUND and
collectively the FUNDS), and ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., a limited
partnership formed under the laws of the State of New York (BBH&CO. or the
CUSTODIAN),
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the
Fund and to provide related services, all as provided herein, and BBH&Co. is
willing to accept such employment, subject to the terms and conditions herein
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN.(1) The Fund hereby appoints BBH&Co. as the
Fund's custodian, and BBH&Co. hereby accepts such appointment. All Investments
of the Fund delivered to the Custodian or its agents or Subcustodians shall be
dealt with as provided in this Agreement. The duties of the Custodian with
respect to the Fund's Investments shall be only as set forth expressly in this
Agreement, which duties are generally comprised of safekeeping and various
administrative duties that will be performed in accordance with Instructions and
as reasonably required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Fund. This Agreement does not violate any Applicable Law
or conflict with or constitute a default under the Fund's
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(1) Capitalized Terms are defined herein at Section 12.
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prospectus or other organic document, agreement, judgment, order or decree
to which the Fund is a party or by which it or its Investments is bound.
2.2 By providing an Instruction with respect to the first
acquisition of an Investment in a jurisdiction other than the United
States of America, the Fund shall be deemed to have confirmed to the
Custodian that the Fund or its Investment Advisor has (a) assessed and
accepted all material Country or Sovereign Risks and accepted
responsibility for their occurrence, (b) made all determinations required
to be made by the Fund or its Investment Advisor under the 1940 Act, and
(c) appropriately and adequately disclosed to the Fund's shareholders,
other investors and all persons who have rights in or to such Investments,
all material investment risks, including those relating to the custody and
settlement infrastructure or the servicing of securities in such
jurisdiction.
2.3 The Fund shall safeguard and shall solely be responsible for
the safekeeping of any testkeys, identification codes, passwords, other
security devices or statements of account with which the Custodian
provides it. In furtherance and not limitation of the foregoing, in the
event the Fund utilizes any on-line service offered by the Custodian, the
Fund and the Custodian shall be fully responsible for the security of each
party's connecting terminal, access thereto and the proper and authorized
use thereof and the initiation and application of continuing effective
safeguards in respect thereof. Additionally, if the Fund uses any on-line
or similar communications service made available by the Custodian, the
Fund shall be solely responsible for ensuring the security of its access
to the service and for the use of the service, and shall only attempt to
access the service and the Custodian's computer systems as directed by the
Custodian. If the Custodian provides any computer software to the Fund
relating to the services described in this Agreement, the Fund will only
use the software for the purposes for which the Custodian provided the
software to the Fund, and will abide by the license agreement accompanying
the software and any other security policies which the Custodian provides
to the Fund.
3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered by
BBH&Co. and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound. BBH&Co. represents and warrants that in accordance with
Section 17(f) of the 1940 Act, it is a bank as defined in Section 2(a)(5) of the
1940 Act and it has the qualifications prescribed for trustees of Unit
Investment Trusts in Section 26(a)(1) of the 1940 Act.
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the Custodian
shall perform its duties pursuant to Instructions. As used herein, the term
INSTRUCTION shall mean a directive initiated by the Fund,
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acting directly or through its board of directors, officers or other Authorized
Persons, which directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON
shall be a person or entity authorized to give Instructions for or on
behalf of the Fund by written notices to the Custodian or otherwise in
accordance with procedures delivered to and acknowledged by the Custodian,
including without limitation the Fund's Investment Adviser or Foreign
Custody Manager. The Custodian may treat any Authorized Person as having
full authority of the Fund to issue Instructions hereunder unless the
notice of authorization contains explicit limitations as to said
authority. The Custodian shall be entitled to rely upon the authority of
Authorized Persons until it receives appropriate written notice from the
Fund to the contrary.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by
such secured or authenticated electro-mechanical means as the Custodian
shall make available to the Fund from time to time unless the Fund shall
elect to transmit such Instruction in accordance with Subsections 4.2.1
through 4.2.3 of this Section.
4.2.1 FUND DESIGNATED SECURED-TRANSMISSION METHOD.
Instructions may be transmitted through a secured or tested
electro-mechanical means identified by the Fund or by an Authorized
Person entitled to give Instruction and acknowledged and accepted by
the Custodian; it being understood that such acknowledgment shall
authorize the Custodian to receive and process such means of
delivery but shall not represent a judgment by the Custodian as to
the reasonableness or security of the method determined by the
Authorized Person.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in
a writing that bears the manual signature of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be
transmitted by another means determined by the Fund or Authorized
Persons and acknowledged and accepted by the Custodian (subject to
the same limits as to acknowledgements as is contained in Subsection
4.2.1, above) including Instructions given orally or by SWIFT, telex
or telefax (whether tested or untested).
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When an Instruction is given by means established under Subsections 4.2.1
through 4.2.3, it shall be the responsibility of the Custodian to use reasonable
care to adhere to any security or other procedures established in writing
between the Custodian and the Authorized Person with respect to such means of
Instruction, but such Authorized Person shall be solely responsible for
determining that the particular means chosen is reasonable under the
circumstances. Oral Instructions shall be binding upon the Custodian only if and
when the Custodian takes action with respect thereto. With respect to telefax
instructions, the parties agree and acknowledge that receipt of legible
instructions cannot be assured, that the Custodian cannot verify that authorized
signatures on telefax instructions are original or properly affixed, and that
the Custodian shall not be liable for losses or expenses incurred through
actions taken in reliance on inaccurately stated, illegible or unauthorized
telefax instructions. The provisions of Section 4A of the Uniform Commercial
Code shall apply to Funds Transfers performed in accordance with Instructions.
In the event that a Funds Transfer Services Agreement is executed between the
Fund or and Authorized Person and the Custodian, such an agreement shall
comprise a designation of form of a means of delivering Instructions for
purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized
Person shall be responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or other
dealing in the Fund's Investments and upon any delivery and transfer of
any Investment or moneys, the person initiating such Instruction shall
give the Custodian an Instruction with appropriate detail, including,
without limitation:
4.3.1 The transaction date and the date and location of
settlement;
4.3.2 The specification of the type of transaction;
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4.3.4 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money
to be received or delivered and currency information. Where an
Instruction is communicated by electronic means, or otherwise where
an Instruction contains an identifying number such as a CUSIP, SEDOL
or ISIN number, the Custodian shall be entitled to rely on such
number as controlling notwithstanding any inconsistency contained in
such Instruction, particularly with respect to Investment
description;
4.3.5 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, the Custodian may give prompt notice of such determination to the
Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any action in
response to the Instruction initially delivered until the redelivery of an
amended or reformed Instruction.
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund
shall take into consideration delays which may occur due to the
involvement of a Subcustodian or agent, differences in time zones, and
other factors particular to a given market, exchange or issuer. When the
Custodian has established specific timing requirements or deadlines with
respect to particular classes of Instruction, or when an Instruction is
received by the Custodian at such a time that it could not reasonably be
expected to have acted on such instruction due to time zone differences or
other factors beyond its reasonable control, the execution of any
Instruction received by the Custodian after such deadline or at such time
(including any modification or revocation of a previous Instruction) shall
be at the risk of the Fund.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered
to it or Subcustodians for the Fund in accordance with the provisions of this
Section. The Custodian shall not be responsible for (a) the safekeeping of
Investments not delivered or that are not caused to be issued to it or its
Subcustodians; or, (b) pre-existing faults or defects in Investments that are
delivered to the Custodian, or its Subcustodians. The Custodian is hereby
authorized to hold with itself or a Subcustodian, and to record
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in one or more accounts, all Investments delivered to and accepted by the
Custodian, any Subcustodian or their respective agents pursuant to an
Instruction or in consequence of any corporate action. The Custodian shall hold
Investments for the account of the Fund and shall segregate Investments from
assets belonging to the Custodian and shall cause its Subcustodians to segregate
Investments from assets belonging to the Subcustodian in an account held for the
Fund or in an account maintained by the Subcustodian generally for
non-proprietary assets of the Custodian.
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and
maintain Investments in any Securities Depository, either directly or
through one or more Subcustodians appointed by the Custodian. Investments
held in a Securities Depository shall be held (a) subject to the
agreement, rules, statement of terms and conditions or other document or
conditions effective between the Securities Depository and the Custodian
or the Subcustodian, as the case may be, and (b) in an account for the
Fund or in bulk segregation in an account maintained for the
non-proprietary assets of the entity holding such Investments in the
Depository. If market practice or the rules and regulations of the
Securities Depository prevent the Custodian, the Subcustodian or any agent
of either from holding its client assets in such a separate account, the
Custodian, the Subcustodian or other agent shall as appropriate segregate
such Investments for benefit of the Fund or for benefit of clients of the
Custodian generally on its own books.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be
held in registered or bearer form: (a) in the Custodian's vault; (b) in
the vault of a Subcustodian or agent of the Custodian or a Subcustodian;
or (c) in an account maintained by the Custodian, Subcustodian or agent at
a Securities Depository; all in accordance with customary market practice
in the jurisdiction in which any Investments are held.
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5.3 REGISTERED ASSETS. Investments which are registered may be
registered in the name of the Custodian, a Subcustodian, or in the name of
the Fund or a nominee for any of the foregoing, and may be held in any
manner set forth in paragraph 5.2 above with or without any identification
of fiduciary capacity in such registration.
5.4 BOOK ENTRY ASSETS. Investments which are represented by
book-entry may be so held in an account maintained by the Book-Entry Agent
on behalf of the Custodian, a Subcustodian or another agent of the
Custodian, or a Securities Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of
Investments for which the Custodian is responsible under the terms of this
Agreement, the Custodian shall replace such Investment, or in the event
that such replacement cannot be effected, the Custodian shall pay to the
Fund the fair market value of such Investment based on the last available
price as of the close of business in the relevant market on the date that
a claim was first made to the Custodian with respect to such loss, or, if
less, such other amount as shall be agreed by the parties as the date for
settlement.
6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments
purchased for the account of the Fund shall be paid for (a) against
delivery thereof to the Custodian or a Subcustodian, as the case may be,
either directly or through a Clearing Corporation or a Securities
Depository (in accordance with the rules of such Securities Depository or
such Clearing Corporation), or (b) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the
terms of the instrument representing such Investment.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold
for the account of the Fund shall be delivered (a) against payment
therefor in cash, by check or by bank wire transfer, (b) by credit to
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the account of the Custodian or the applicable Subcustodian, as the case
may be, with a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or such Clearing
Corporation), or (c) otherwise in accordance with an Instruction,
Applicable Law, generally accepted trade practices, or the terms of the
instrument representing such Investment.
6.3 DELIVERY IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER
COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian
may deliver Investments or cash of the Fund in connection with borrowings
and other collateral and margin requirements.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the
Custodian shall become a party to an agreement with the Fund and a futures
commission merchant regarding margin (TRI-PARTY AGREEMENT), the Custodian
shall (a) receive and retain, to the extent the same are provided to the
Custodian, confirmations or other documents evidencing the purchase or
sale by the Fund of exchange-traded futures contracts and commodity
options, (b) when required by such Tri-Party Agreement, deposit and
maintain in an account opened pursuant to such Agreement (MARGIN ACCOUNT),
segregated either physically or by book-entry in a Securities Depository
for the benefit of any futures commission merchant, such Investments as
the Fund shall have designated as initial, maintenance or variation
"margin" deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any exchange-traded
futures contracts and commodity options; and (c) thereafter pay, release
or transfer Investments into or out of the margin account in accordance
with the provisions of the Agreement. Alternatively, the Custodian may
deliver Investments, in accordance with an Instruction, to a futures
commission merchant for purposes of margin requirements in accordance with
Rule 17f-6. The Custodian shall in no event be responsible for the acts
and omissions of any futures commission merchant to whom Investments are
delivered pursuant to this Section; for the sufficiency of Investments
held in any Margin Account; or for the performance of any terms of any
exchange-traded futures contracts and commodity options.
6.5 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to
time, the Fund's Investments may include Investments that are not
ownership interests as may be represented by certificate (whether
registered or bearer), by entry in a Securities Depository or by book
entry agent, registrar or similar agent for recording ownership interests
in the relevant Investment. If the Fund shall at any time acquire such
Investments, including without limitation deposit obligations, loan
participations, repurchase
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agreements and derivative arrangements, the Custodian shall (a) receive
and retain, to the extent the same are provided to the Custodian,
confirmations or other documents evidencing the arrangement; and (b)
perform on the Fund's account in accordance with the terms of the
applicable arrangement, but only to the extent directed to do so by
Instruction. The Custodian shall have no responsibility for agreements
running to the Fund as to which it is not a party other than to retain, to
the extent the same are provided to the Custodian, documents or copies of
documents evidencing the arrangement and, in accordance with Instruction,
to include such arrangements in reports made to the Fund.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by
Instruction, the Custodian shall: (a) exchange securities held for the
account of the Fund for other securities in connection with any
reorganization, recapitalization, conversion, split-up, change of par
value of shares or similar event, and (b) deposit any such securities in
accordance with the terms of any reorganization or protective plan.
6.7 SURRENDER OF SECURITIES. Unless otherwise directed by
Instruction, the Custodian may surrender securities: (a) in temporary form
for definitive securities; (b) for transfer into the name of an entity
allowable under Section 5.3; and (c) for a different number of
certificates or instruments representing the same number of shares or the
same principal amount of indebtedness.
6.8 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian
shall (a) deliver warrants, puts, calls, rights or similar securities to
the issuer or trustee thereof, or to any agent of such issuer or trustee,
for purposes of exercising such rights or selling such securities, and (b)
deposit securities in response to any invitation for the tender thereof.
6.9 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by
Instruction, the Custodian shall: (a) comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions or similar
rights of securities ownership affecting securities held on the Fund's
account and promptly notify the Fund of such action, and (b) collect all
stock dividends, rights and other items of like nature with respect to
such securities.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction,
the Custodian shall collect any amount due and payable to the Fund with
respect to Investments and promptly credit the amount collected to a
Principal or Agency Account; provided, however, that the Custodian shall
not be responsible for: (a) the collection of amounts due and payable with
respect to Investments that are in default, or (b) the
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collection of cash or share entitlements with respect to Investments that
are not registered in the name of the Custodian or its Subcustodians. The
Custodian is hereby authorized to endorse and deliver any instrument
required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST.
The Custodian is hereby authorized to execute on behalf of the Fund
ownership certificates, affidavits or other disclosure required under
Applicable Law or established market practice in connection with the
receipt of income, capital gains or other payments by the Fund with
respect to Investments, or in connection with the sale, purchase or
ownership of Investments.
6.12 PROXY MATERIALS. The Custodian shall promptly deliver, or
cause to be delivered, to the Fund proxy forms, notices of meeting, and
any other notices or announcements materially affecting or relating to
Investments received by the Custodian or any nominee.
6.13. TAXES. The Custodian shall, where applicable, assist the Fund
in the reclamation of taxes withheld on dividends and interest payments
received by the Fund. In the performance of its duties with respect to tax
withholding and reclamation, the Custodian shall be entitled to rely on
the advice of counsel and upon information and advice regarding the Fund's
tax status that is received from or on behalf of the Fund without duty of
separate inquiry.
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed
by Instruction, including without limitation effecting the free payments
of moneys or the free delivery of securities, provided that such
Instruction shall indicate the purpose of such payment or delivery and
that the Custodian shall record the party to whom such payment or delivery
is made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Fund shall have the right to request an accounting with respect to such
expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall promptly
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provide to the Fund all material information pertaining to a corporate action
which the Custodian actually receives; provided that the Custodian shall not be
responsible for the completeness or accuracy of such information. Any advance
credit of cash or shares expected to be received as a result of any corporate
action shall be subject to actual collection and may, when the Custodian deems
collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) agents (other than Subcustodians) to carry out some or all
of the administrative provisions of this Agreement (AGENTS), provided, however,
that the appointment of such agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Fund hereby authorizes the Custodian
to open and maintain, with itself or with Subcustodians, cash accounts in United
States Dollars, in such other currencies as are the currencies of the countries
in which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of
the Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the
Fund. Such accounts collectively shall be a deposit obligation of the
Custodian and shall be subject to the terms of this Section 7 and the
general liability provisions contained in Section 9. Cash accounts opened
on the books of a Subcustodian may be opened in the name of the Fund or
the Custodian or in the name of the Custodian for its customers generally
(AGENCY ACCOUNTS). Such deposits shall be obligations of the Subcustodian
and shall be treated as an Investment of the Fund. Accordingly, the
Custodian shall be responsible for exercising reasonable care in the
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administration of such accounts but shall not be liable for their
repayment in the event such Subcustodian, by reason of its bankruptcy,
insolvency or otherwise, fails to make repayment.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The
Custodian shall make payments from or deposits to any of said accounts in
the course of carrying out its administrative duties, including but not
limited to income collection with respect to the Fund's Investments, and
otherwise in accordance with Instructions. The Custodian and its
Subcustodians shall be required to credit amounts to the cash accounts
only when moneys are actually received in cleared funds in accordance with
banking practice in the country and currency of deposit. Any credit made
to any Principal or Agency Account before actual receipt of cleared funds
shall be provisional and may be reversed by the Custodian in the event
such payment is not actually collected. Unless otherwise specifically
agreed in writing by the Custodian or any Subcustodian, all deposits shall
be payable only at the branch of the Custodian or Subcustodian where the
deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any
loss or damage arising from the applicability of any law or regulation now
or hereafter in effect, or from the occurrence of any event, which may
delay or affect the transferability, convertibility or availability of any
currency in the country (a) in which such Principal or Agency Accounts are
maintained or (b) in which such currency is issued, and in no event shall
the Custodian be obligated to make payment of a deposit denominated in a
currency during the period during which its transferability,
convertibility or availability has been affected by any such law,
regulation or event. Without limiting the generality of the foregoing,
neither the Custodian nor any Subcustodian shall be required to repay any
deposit made at a foreign branch of either the Custodian or Subcustodian
if such
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branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in
writing to repay the deposit under such circumstances. All currency
transactions in any account opened pursuant to this Agreement are subject
to exchange control regulations of the United States and of the country
where such currency is the lawful currency or where the account is
maintained. Any taxes, costs, charges or fees imposed on the
convertibility of a currency held by the Fund shall be for the account of
the Fund.
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to
the terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions.
The Custodian may act as principal in any foreign exchange transaction
with the Fund in accordance with Section 7.4.2 of this Agreement. The
obligations of the Custodian in respect of all foreign exchange
transactions (whether or not the Custodian shall act as principal in such
transaction) shall be contingent on the free, unencumbered transferability
of the currency transacted on the actual settlement date of the
transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian
shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures),
where any third party acts as principal counterparty to the Fund on
the same basis it performs duties as agent for the Fund with respect
to any other of the Fund's Investments. Accordingly the Custodian
shall only be responsible for delivering or receiving currency on
behalf of the Fund in respect of such contracts pursuant to
Instructions. The Custodian shall not be responsible for the failure
of any counterparty (including any Subcustodian) in such agency
transaction to perform its obligations thereunder. The Custodian (a)
shall transmit cash and Instructions to and from the currency broker
or banking institution with which a foreign exchange contract or
option has been executed pursuant hereto, (b) may make free outgoing
payments of cash in the form of Dollars or foreign currency without
receiving confirmation of a foreign exchange contract or option or
confirmation that the countervalue currency completing the foreign
exchange contract has been delivered or received or that the option
has been
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delivered or received, and (c) shall hold all confirmations,
certificates and other documents and agreements received by the
Custodian and evidencing or relating to such foreign exchange
transactions in safekeeping. The Fund accepts full responsibility
for its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs
and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with the Fund
as principal as the Custodian and the Fund may agree from time to
time. In such event, the foreign exchange transaction will be
performed in accordance with the particular agreement of the
parties, or in the event a principal foreign exchange transaction is
initiated by Instruction in the absence of specific agreement, such
transaction will be performed in accordance with the usual
commercial terms of the Custodian.
7.5 DELAYS. If no event of Force Majeure shall have occurred and
be continuing and in the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an
Instruction to credit or transfer cash, the Custodian shall be liable to
the Fund: (a) with respect to Principal Accounts, for interest to be
calculated at the rate customarily paid on such deposit and currency by
the Custodian on overnight deposits at the time the delay occurs for the
period from the day when the transfer should have been effected until the
day it is in fact effected; and, (b) with respect to Agency Accounts, for
interest to be calculated at the rate customarily paid on such deposit and
currency by the Subcustodian on overnight deposits at the time the delay
occurs for the period from the day when the transfer should have been
effected until the day it is in fact effected. The Custodian shall not be
liable for delays in carrying out such Instructions to transfer cash which
are not due to the Custodian's own negligence or willful misconduct.
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping
duties pursuant to Section 5 hereof or its administration of the Fund's
assets pursuant to Section 6 hereof, the Custodian or any Subcustodian
advances monies to facilitate settlement or otherwise for benefit of the
Fund (whether or not
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any Principal or Agency Account shall be overdrawn either during, or at
the end of, any Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title
to any Investments purchased with such Advance save a right to
receive such Investments upon: (a) the debit of the Principal or
Agency Account; or, (b) if such debit would produce an overdraft in
such account, other reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in the Fund's
Investments as security for such Advance in an amount not to exceed
the amount of the Advance; and,
7.6.3 agree that the Custodian may secure the resulting
Advance by perfecting a security interest in the Fund's Investments
in an amount not to exceed the amount of the Advance under
Applicable Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance monies
to the Fund, and in the event that such Advance occurs, any transaction giving
rise to an Advance shall be for the account and risk of the Fund and shall not
be deemed to be a transaction undertaken by the Custodian for its own account
and risk. If such Advance shall have been made by a Subcustodian or any other
person, the Custodian may assign the security interest and any other rights
granted to the Custodian hereunder to such Subcustodian or other person. If the
Fund shall fail to repay when due the principal balance of an Advance and
accrued and unpaid interest thereon, the Custodian or its assignee, as the case
may be, shall be entitled to utilize the available cash balance in any Agency or
Principal Account and to dispose of any Investments to the extent necessary to
recover payment of all principal of, and interest on, such Advance in full. The
Custodian may assign any rights it has hereunder to a Subcustodian or third
party. Any security interest in Investments taken hereunder shall be treated as
financial assets credited to securities accounts under Articles 8 and 9 of the
Uniform Commercial Code (1997). Accordingly, the Custodian shall have the rights
and benefits of a secured creditor that is a securities intermediary under such
Articles 8 and 9.
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained
in all Principal Accounts
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(whether or not denominated in Dollars) shall collectively constitute a
single and indivisible current account with respect to the Fund's
obligations to the Custodian, or its assignee, and balances in such
Principal Accounts shall be available for satisfaction of the Fund's
obligations under this Section 7. The Custodian shall further have a right
of offset against the balances in any Agency Account maintained hereunder
to the extent that the aggregate of all Principal Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The
Custodian may deposit and/or maintain, either directly or through one or
more agents appointed by the Custodian, Investments of the Fund in any
Securities Depository in the United States, including The Depository Trust
Company, provided such Depository meets applicable requirements of the
Federal Reserve Bank or of the Securities and Exchange Commission and
provided that the Board of Trustees of the Fund has pre-approved such
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Depository. 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 meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the
rules and regulations thereunder, to act on behalf of the Fund as a
Subcustodian for purposes of holding Investments of the Fund in the United
States.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The
Custodian may deposit and/or maintain non-U.S. Investments of the Fund in
any non-U.S. Securities Depository provided such Securities Depository
meets the requirements of an "eligible foreign custodian" under Rule 17f-5
promulgated under the 1940 Act, or any successor rule or regulation ("Rule
17f-5") or which by order of the Securities and Exchange Commission is
exempted therefrom. Additionally, the Custodian may, at any time and from
time to time, appoint (a) any bank, trust company or other entity meeting
the requirements of an ELIGIBLE FOREIGN CUSTODIAN under Rule 17f-5 or
which by order of the Securities and Exchange Commission is exempted
therefrom, or (b) any bank as defined in Section 2(a)(5) of the 1940 Act
meeting the requirements of a custodian under Section 17(f) of the 1940
Act and the rules and regulations thereunder, to act on behalf of the Fund
as a Subcustodian for purposes of holding Investments of the Fund outside
the United States. Such appointment of foreign Subcustodians shall be
subject to approval of the Fund in accordance with Subsections 8.2.1 and
8.2.2.
8.2.1 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and
except to the extent that review of certain matters concerning the
appointment of Subcustodians shall have been delegated to the
Custodian pursuant to Subsection 8.2.2, the Custodian shall, prior
to the appointment of any Subcustodian for purposes of holding
Investments of the Fund outside the United States, obtain written
confirmation of the approval of the Board of Trustees or Directors
of the Fund with respect to (a) the identity of a Subcustodian, (b)
the country or countries in which, and the Securities Depositories,
if any, through which, any proposed Subcustodian is authorized to
hold Investments of the Fund, and (c) the Subcustodian agreement
which shall govern such appointment. Each such duly approved
country, Subcustodian and Securities Depository shall be listed on
Appendix A attached hereto as the same may from time to time be
amended.
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time
to time, the Custodian
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may offer to perform, and the Fund may accept, that the Custodian
perform certain reviews of Subcustodians and of Subcustodian
Contracts as delegate of the Fund's Board. In such event, the
Custodian's duties and obligations with respect to this delegated
review will be performed in accordance with the terms of a separate
delegation agreement between the Fund and the Custodian with the
attached Procedures and Guidelines.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. With respect to securities
and funds held by a Subcustodian, either directly or indirectly (including
by a Foreign Depository, Securities System or foreign clearing agency),
including demand deposit and interest bearing deposits, currencies or
other deposits and foreign exchange contracts as referred to herein, 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.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which is to be
held in a country in which no Subcustodian is authorized to act in order
that the Custodian shall, if it deems appropriate to do so, have
sufficient time to establish a subcustodial arrangement in accordance
herewith. In the event, however, the Custodian is unable to establish such
arrangements prior to the time such investment is to be acquired, the
Custodian is authorized to designate at its discretion a local safekeeping
agent, and the use of such local safekeeping agent shall be at the sole
risk of the Fund, and accordingly the Custodian shall be responsible to
the Fund 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.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall use reasonable care under the facts and
circumstances prevailing in the market where performance is effected. Subject to
the specific provisions of this Section, the Custodian shall be liable for
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any direct damage incurred by the Fund in consequence of the Custodian's
negligence, bad faith or willful misconduct. In no event shall the Custodian be
liable hereunder for any special, indirect, punitive or consequential damages
arising out of, pursuant to or in connection with this Agreement even if the
Custodian has been advised of the possibility of such damages. It is agreed that
the Custodian shall have no duty to assess the risks inherent in the Fund's
Investments or to provide investment advice with respect to such Investments and
that the Fund as principal shall bear any risks attendant to particular
Investments such as failure of counterparty or issuer.
9.1 LIMITATIONS OF PERFORMANCE. The Custodian shall not be
responsible under this Agreement for any failure to perform its duties,
and shall not liable hereunder for any loss or damage in association with
such failure to perform, for or in consequence of the following causes:
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance
or event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and
which adversely affects the performance by the Custodian of its
obligations hereunder, by the Subcustodian of its obligations under
its Subcustody Agreement or by any other agent of the Custodian or
the Subcustodian, including any event caused by, arising out of or
involving (a) an act of God, (b) accident, fire, water damage or
explosion, (c) any computer, system or other equipment failure or
malfunction caused by any computer virus or the malfunction or
failure of any communications medium, (d) any interruption of the
power supply or other utility service, (e) any strike or other work
stoppage, whether partial or total, (f) any delay or disruption
resulting from or reflecting the occurrence of any Sovereign Risk,
(g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, (h) any
encumbrance on the transferability of a currency or a currency
position on the actual settlement date of a foreign exchange
transaction, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, or (i) any other cause similarly
beyond the reasonable control of the Custodian.
9.1.2 COUNTRY RISK. COUNTRY RISK shall mean, with respect to
the acquisition, ownership, settlement or custody of Investments in
a jurisdiction, all risks relating to, or arising in consequence of,
systemic and markets factors affecting the acquisition, payment for
or ownership of Investments including (a) the prevalence of crime
and corruption, (b) the inaccuracy or unreliability of business and
financial information, (c) the instability or volatility of banking
and financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and settlement
infrastructure of the market in which such Investments are
transacted and held, (e) the acts, omissions and operation of any
Securities Depository, (f) the risk of the bankruptcy or insolvency
of banking agents, counterparties to cash and securities
transactions, registrars or transfer agents, and (g) the existence
of market conditions which prevent the orderly execution or
settlement of transactions or which affect the value of assets.
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9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of
any jurisdiction, including the United States of America, where
Investments is acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or
civil commotion, (b) the imposition of any investment, repatriation
or exchange control restrictions by any Governmental Authority, (c)
the confiscation, expropriation or nationalization of any
Investments by any Governmental Authority, whether de facto or de
jure, (d) any devaluation or revaluation of the currency, (e) the
imposition of taxes, levies or other charges affecting Investments,
(f) any change in the Applicable Law, or (g) any other economic or
political risk incurred or experienced.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable
for any loss, claim, damage or other liability arising from the following
causes:
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other
agent of and issuer; (b) any counterparty with respect to any
Investment, including any issuer of exchange-traded or other
futures, option, derivative or commodities contract; (c) failure of
an Investment Advisor, Foreign Custody Manager or other agent of the
Fund; or (d) failure of other third parties similarly beyond the
control or choice of the Custodian.
9.2.2 INFORMATION SOURCES. The Custodian may rely upon
information received from issuers of Investments or agents of such
issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data bases and
the like, but shall not be responsible for specific inaccuracies in
such information, provided that the Custodian has relied upon such
information in good faith, or for the failure of any commercially
reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such
action conflicts with, or is contrary to any provision of, the
Fund's declaration of trust, certificate of incorporation or
by-laws, Applicable Law, or actions by the trustees, directors or
shareholders of the Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in the
rights, transferability or similar investment characteristics of a
given Investment of the Fund.
10. REPORTS AND RECORDS. The Custodian shall:
10.1 create and maintain records relating to the performance of its
obligations under this Agreement;
10.2 make available to the Fund, its auditors, agents and
employees, during regular business hours of the Custodian, upon reasonable
request and during normal business hours of the Custodian, all records
maintained by the Custodian pursuant to paragraph (a) above, subject,
however, to all reasonable security requirements of the Custodian then
applicable to the records of its custody customers generally; and
10.3 make available to the Fund all Electronic Reports; it being
understood that the Custodian shall not be liable hereunder for the
inaccuracy or incompleteness thereof or for errors in any information
included therein.
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The Fund shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that the
Custodian now obtains and will in the future obtain information on the value of
assets from outside sources which may be utilized in certain reports made
available to the Fund. The Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.
11. MISCELLANEOUS.
11.1 PROXIES, ETC. The Fund will promptly execute and deliver, upon
request, such proxies, powers of attorney or other instruments as may be
necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
11.2 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the
Custodian with respect to the subject matter hereof. Accordingly, this
Agreement supersedes any custody agreement or other oral or written
agreements heretofore in effect between the Fund and the Custodian with
respect to the custody of the Fund's Investments.
11.3 WAIVER AND AMENDMENT. No provision of this Agreement may be
waived, amended or modified, and no addendum to this Agreement shall be or
become effective, or be waived, amended or modified, except by an
instrument in writing executed by the party against which enforcement
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of such waiver, amendment or modification is sought; provided, however,
that an Instruction shall, whether or not such Instruction shall
constitute a waiver, amendment or modification for purposes hereof, shall
be deemed to have been accepted by the Custodian when it commences actions
pursuant thereto or in accordance therewith.
11.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE
PARTIES HERETO IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK
CITY IN THE BOROUGH OF MANHATTAN.
11.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b) by
first class registered or certified mail, postage prepaid, return receipt
requested, (c) by a nationally recognized overnight courier or (d) by
facsimile transmission, provided that any notice or other writing sent by
facsimile transmission shall also be mailed, postage prepaid, to the party
to whom such notice is addressed. All such notices shall be addressed, as
follows:
If to the Fund:
Hotchkis and Wiley Funds
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇,
President
Telephone: [213] - ▇▇▇-▇▇▇▇
Facsimile [213] - 430-1016
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If to the Custodian:
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Securities Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,
or such other address as the Fund or the Custodian may have designated in
writing to the other.
11.6 HEADINGS. Paragraph headings included herein are for
convenience of reference only and shall not modify, define, expand or
limit any of the terms or provisions hereof.
11.7 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 the Fund and the Custodian.
11.8 CONFIDENTIALITY. 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 or
obtaining 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 or to any bank examiner of the Custodian or any Subcustodian,
any Regulatory Authority, any auditor of the parties hereto, or by
judicial or administrative process or otherwise by Applicable Law.
11.9 COUNSEL. In fulfilling its duties hereunder, the Custodian
shall be entitled to
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receive and act upon the advice of (i) counsel regularly retained by the
Custodian in respect of such matters, (ii) counsel for the Fund or (iii)
such counsel as the Fund and the Custodian may agree upon, with respect to
all matters, and the Custodian shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
12. DEFINITIONS. The following defined terms will have the respective meanings
set forth below.
12.1 ADVANCE shall mean any extension of credit by or through the
Custodian or by or through any Subcustodian and shall include amounts paid
to third parties for account of the Fund or in discharge of any expense,
tax or other item payable by the Fund.
12.2 AGENCY ACCOUNT shall mean any deposit account opened on the
books of a Subcustodian or other banking institution in accordance with
Section 7.1.
12.3 AGENT shall have the meaning set forth in the last system of
Section 6.
12.4 APPLICABLE LAW shall mean with respect to each jurisdiction,
all (a) laws, statutes, treaties, regulations, guidelines (or their
equivalents); (b) orders, interpretations licenses and permits; and (c)
judgments, decrees, injunctions writs, orders and similar actions by a
court of competent jurisdiction; compliance with which is required or
customarily observed in such jurisdiction.
12.5 AUTHORIZED PERSON shall mean any person or entity authorized
to give Instructions on behalf of the Fund in accordance with Section 4.1.
12.6 BOOK-ENTRY AGENT shall mean an entity acting as agent for the
issuer of Investments for purposes of recording ownership or similar
entitlement to Investments, including without limitation a transfer agent
or registrar.
12.7 CLEARING CORPORATION shall mean any entity or system
established for purposes of providing securities settlement and movement
and associated functions for a given market.
12.8 DELEGATION AGREEMENT shall mean any separate agreement entered
into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning the appointment and
administration of Subcustodians delegated to the Custodian pursuant to
Rule 17f-5.
12.9 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody
manager appointed pursuant to Rule 17f-5 of the 1940 Act.
12.10 FUNDS TRANSFER SERVICES AGREEMENT shall mean any separate
agreement entered into between the Custodian and the Fund or its
authorized representative with respect to certain matters concerning the
processing of payment orders from Principal Accounts of the Fund.
12.11 INSTRUCTION(s) shall have the meaning assigned in Section 4.
12.12 INVESTMENT ADVISOR shall mean any person or entity who is an
Authorized Person to give Instructions with respect to the investment and
reinvestment of the Fund's Investments.
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12.13 INVESTMENTS shall mean any investment asset of the Fund,
including without limitation securities, bonds, notes, debentures, cash as
well as receivables, derivatives, contractual rights or entitlements and
other intangible assets.
12.14 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
12.15 PRINCIPAL ACCOUNT shall mean deposit accounts of the Fund
carried on the books of BBH&Co. as principal in accordance with Section 7.
12.16 SAFEKEEPING ACCOUNT shall mean an account established on the
books of the Custodian or any Subcustodian for purposes of segregating the
interests of the Fund (or clients of the Custodian or Subcustodian) from
the assets of the Custodian or any Subcustodian.
12.17 SECURITIES DEPOSITORY shall mean a central or book entry
system or agency established under Applicable Law for purposes of
recording the ownership and/or entitlement to investment securities for a
given market.
12.18 SUBCUSTODIAN shall mean each foreign bank appointed by the
Custodian pursuant to Section 8, but shall not include Securities
Depositories.
12.19 TRI-PARTY AGREEMENT shall have the meaning set forth in
Section 6.4 hereof.
12.20 1940 ACT shall mean the Investment Company Act of 1940,
including the Rules promulgated thereunder.
13. COMPENSATION. The Fund agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Fund and the Custodian in effect
on the date hereof or as amended from time to time, and (b) all out-of-pocket
expenses incurred by the Custodian, including the fees and expenses of all
Subcustodians, and payable from time to time. Amounts payable by the Fund under
and pursuant to this Section 13 shall be payable by wire transfer to the
Custodian at BBH&Co. in New York, New York.
14. TERMINATION. This Agreement may be terminated by either party in
accordance with the provisions of this Section. The provisions of this Agreement
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.
14.1 NOTICE AND EFFECT. This Agreement may be terminated by either
party by written notice effective no sooner than seventy-five days
following the date that notice to such effect shall be delivered to other
party at its address set forth in paragraph 11.5 hereof.
14.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a
successor custodian,
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it is agreed that the Investments of the Fund held by the Custodian or any
Subcustodian shall be delivered to the successor custodian in accordance
with reasonable Instructions. The Custodian agrees to cooperate with the
Fund in the execution of documents and performance of other actions
necessary or desirable in order to facilitate the succession of the new
custodian. If no successor custodian shall be appointed, the Custodian
shall in like manner transfer the Fund's Investments in accordance with
Instructions.
14.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the Fund either (a)
deliver the Investments of the Fund held hereunder to the Fund at the
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a
capitalization of $2M USD equivalent and operating under the Applicable
Law of the jurisdiction where such Investments are located, such delivery
to be at the risk of the Fund. In the event that Investments or moneys of
the Fund remain in the custody of the Custodian or its Subcustodians after
the date of termination owing to the failure of the Fund to issue
Instructions with respect to their disposition or owing to the fact that
such disposition could not be accomplished in accordance with such
Instructions despite diligent efforts of the Custodian, the Custodian
shall be entitled to compensation for its services with respect to such
Investments and moneys during such period as the Custodian or its
Subcustodians retain possession of such items and the provisions of this
Agreement shall remain in full force and effect until disposition in
accordance with this Section is accomplished.
14.4 LIMITATION OF LIABILITY. This Agreement is binding only on the
Fund's Investments. The Custodian understands that the obligations of this
Agreement are not binding upon any shareholder of the Fund personally, but
bind only the Investments of the Fund. The Custodian acknowledges that it
has notice of the Fund's Declaration of Trust disclaiming shareholder
liability for the acts or obligations of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
HOTCHKIS AND WILEY FUNDS
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
By: ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
By: /s/
W. ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
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▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO. - GLOBAL CUSTODY NETWORK
HOTCHKIS AND WILEY FUNDS
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
AUSTRALIA NATIONAL AUSTRALIA BANK LTD. (NAB) Austraclear
National Australia Bank Agt. 5/1/85 CHESS
Agreement Amendment 2/13/92 RBA
Omnibus Amendment 11/22/93
AUSTRIA BANK AUSTRIA AG OeKB
Creditanstalt Bankverein Agreement 12/18/89
Omnibus Amendment 1/17/94
BELGIUM BANK BRUSSELS ▇▇▇▇▇▇▇ (BBL) CIK
Banque Bruxelles ▇▇▇▇▇▇▇ Agt. 11/15/90 NBB
Omnibus Amendment 3/1/94
CANADA ROYAL BANK OF CANADA (RBC) Bank of Canada
The Royal Bank of Canada Agreement 2/23/96 CDS
DENMARK DEN DANSKE BANK VP
Den Danske Bank Agreement 1/1/89
Omnibus Amendment 12/1/93
FINLAND ▇▇▇▇▇▇ BANK PLC FCSD
Union Bank of Finland Agreement 2/27/89
Omnibus Amendment 4/6/94
FRANCE BNP PARIBAS BdF
▇▇▇▇▇▇ Guaranty Trust Company Agreement 4/2/93 SICOVAM
Consent and Transfer Agreement 4/4/96
GERMANY DRESDNER BANK Clearstream
Dresdner Bank Agreement 10/6/95 Banking
Frankfurt
7/25/00 PAGE 1 OF 3 956082792
28
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
HONG KONG HONGKONG AND SHANGHAI BANKING CORP. LTD (HSBC) CMU
Hongkong & Shanghai Banking Corp. Agt. 4/19/91 HKSCC
Omnibus Supplement 12/29/93
Schedule 5/14/96
IRELAND ALLIED IRISH BANKS PLC (AIB) CREST
Allied Irish Banks Agreement 1/10/89 GSO
Omnibus Amendment 4/8/94
ITALY BANCA COMMERCIALE ITALIANA (BCI) BOI
Banca Commerciale Italiana Agreement 5/8/89 MonteTitoli S.P.A.
Agreement Amendment 10/8/93
Omnibus Amendment 12/14/93
JAPAN SUMITOMO BANK, LTD. BoJ
Sumitomo Bank Limited Agreement 3/16/98 JASDEC
LUXEMBOURG KREDIETBANK LUXEMBOURG (KBL) Clearstream
Kredietbank Luxembourg Agt. 4/7/98 Banking
NETHERLANDS FORTIS BANK NECIGEF
MeesPierson NV Agreement 6/4/99
NEW ZEALAND NATIONAL AUSTRALIA BANK LTD. (NAB), AUCKLAND NZCSD
National Australia Bank Agt. 5/1/85
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89
NORWAY DEN NORSKE BANK VPS
Den norske Bank Agreement 11/16/94
PORTUGAL BANCO COMERCIAL PORTUGUES SA (BCP) CVM
Banco Comercial Portugues 5/18/98
Page 2 of 3
29
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
SINGAPORE HONGKONG & SHANGHAI BANKING CORP. LTD. (HSBC), SINGAPORE CDP
Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
SPAIN BANCO SANTANDER CENTRAL HISPANO SA (BSCH) Banco de Espana
Banco de Santander Agreement 12/14/88 SCLV
SWEDEN SKANDINAVISKA ENSKILDA BANKEN (SEB) VPC
Skandinaviska Enskilden Banken Agreement 2/20/89
Omnibus Amendment 12/3/93
SWITZERLAND UBS AG SIS
Union Bank of Switzerland Agreement 12/20/88
Omnibus Amendment 11/29/94
TRANSNATIONAL ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO. (BBH&CO.) Clearstream
Banking
Euroclear
UNITED KINGDOM HSBC
BANK PLC CMO
Midland Bank Agreement 8/8/90 CREST
Omnibus Amendment 12-15-93
I HEREBY CERTIFY THAT THE BOARD HAS APPROVED THE COUNTRIES AND CENTRAL
DEPOSITORIES LISTED ON THIS APPENDIX
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Page 3 of 3
▇▇
▇▇▇▇▇▇▇▇ ▇
INTENTIONALLY OMITTED
31
APPENDIX "C"
TO
CUSTODIAN AGREEMENT
BETWEEN
HOTCHKIS AND WILEY FUNDS
and
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
Dated as of June 17, 2000
The following is a list of Funds for which the Custodian shall serve under a
Custodian Agreement dated as of June 17, 2000 (the "Agreement"):
Equity Income Fund
Mid-Cap Fund
Small Cap Fund
International Fund
Global Equity Fund
Balanced Fund
Total Return Bond Fund
Low Duration Fund
Short-Term Investment Fund
Equity Fund for Insurance Companies
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be
executed in its name and on behalf of each such Fund.
HOTCHKIS AND WILEY FUNDS ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
By: /s/ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President W. ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice
President