-xv
CUSTODY AGREEMENT
Dated November 30, 1995
Between
UMB BANK, n.a.
and
DEM, Inc.
Prototype Custody Agreement
for a
Registered Investment Company
(for Fund/Plan Clients Only)
Table of Contents
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions 1
(a) Securities 1
(b) Assets 1
(c) Instructions and Special Instructions 1
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic
Subcustodian 3
(a) Safekeeping 3
(b) Manner of Holding Securities 3
(c) Free Delivery of Assets 4
(d) Exchange of Securities 5
(e) Purchases of Assets 5
(f) Sales of Assets 5
(g) Options 6
(h) Futures Contracts 6
(i) Segregated Accounts 7
(j) Depositary Receipts 7
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 7
(l) Interest Bearing Deposits 7
(m) Foreign Exchange Transactions Other than as
Principal 8
(n) Pledges or Loans of Securities 8
(o) Stock Dividends, Rights, Etc. 9
(p) Routine Dealings 9
(q) Collections 9
(r) Bank Accounts 9
(s) Dividends, Distributions and Redemptions 9
(t) Proceeds from Shares Sold 10
(u) Proxies and Notices; Compliance with the
Shareholders
Communication Act of 1985 10
(v) Books and Records 10
(w) Opinion of Fund's Independent Certified Public
Accountants 10
(x) Reports by Independent Certified Public
Accountants 10
(y) Bills and Others Disbursements 11
5. Subcustodians 11
(a) Domestic Subcustodians 11
(b) Foreign Subcustodians 11
(c) Interim Subcustodians 12
(d) Special Subcustodians 12
(e) Termination of a Subcustodian 12
(f) Certification Regarding Foreign Subcustodians 12
6. Standard of Care 12
(a) General Standard of Care 12
(b) Actions Prohibited by Applicable Law, Events
Beyond
Custodian's Control, Armed Conflict, Sovereign
Risk, Etc. 13
(c) Liability for Past Records 13
(d) Advice of Counsel 13
(e) Advice of the Fund and Others 13
(f) Instructions Appearing to be Genuine 13
(g) Exceptions from Liability 13
7. Liability of the Custodian for Actions of Others 14
(a) Domestic Subcustodians 14
(b) Liability for Acts and Omissions of Foreign
Subcustodians 14
(c) Securities Systems, Interim Subcustodians,
Special Subcustodians, Securities Depositories
and
Clearing Agencies 14
(d) Defaults or Insolvencies of Brokers, Banks, Etc. 14
(e) Reimbursement of Expenses 14
8. Indemnification 15
(a) Indemnification by Fund 15
(b) Indemnification by Custodian 15
9. Advances 15
10. Liens 16
11. Compensation 16
12. Powers of Attorney 16
13. Termination and Assignment 16
14. Notices 17
15. Miscellaneous 17
CUSTODY AGREEMENT
This agreement made as of this 30th day of November,
1995, between DEM, Inc., a corporation organized under the
laws of the State of Maryland with its principal place of
business located at The World Trade Center-Baltimore, 000 X.
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx XX 00000 (hereinafter
"Fund"), and UMB Bank, n.a., a national banking association
with its principal place of business located at Kansas City,
Missouri (hereinafter "Custodian").
WITNESSETH:
WHEREAS, the Fund is registered as a closed-end
management investment company under the Investment Company
Act of 1940, as amended; and
WHEREAS, the Fund desires to appoint Custodian as its
custodian for the custody of Assets (as hereinafter defined)
owned by the Fund which Assets are to be held in such
accounts as the Fund may establish from time to time; and
WHEREAS, Custodian is willing to accept such
appointment on the terms and conditions hereof.
WHEREAS, the Fund represents that by separate agreement
between Fund/Plan Services, Inc. ("Fund/Plan") and the Fund,
Fund/Plan (a) has agreed to perform certain administrative
functions which may include the functions of administrator,
transfer agent and accounting services agent and (b) has
been appointed by the Fund to act as its agent in respect of
the transactions contemplated in this Agreement; and
WHEREAS, the Fund represents that (a) Fund/Plan has
agreed to act as Fund's agent in respect of the transactions
contemplated in this Agreement and (b) the Bank is
authorized and directed to rely upon and follow directions
and instructions given by Fund/Plan, the Fund's agent, in
respect of transactions contemplated in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto, intending to be
legally bound, mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN.
The Fund hereby constitutes and appoints the Custodian
as custodian of Assets belonging to the Fund which have been
or may be from time to time deposited with the Custodian.
Custodian accepts such appointment as a custodian and agrees
to perform the
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duties and responsibilities of Custodian as set forth herein
on the conditions set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the following terms
shall have the meanings so indicated:
(a) "Security" or "Securities" shall mean stocks,
bonds, bills, rights, scrip, warrants, interim certificates
and all negotiable or nonnegotiable paper commonly known as
Securities and other instruments or obligations.
(b) "Assets" shall mean Securities, monies and
other property held by the Custodian for the benefit of the
Fund.
(c)(1) "Instructions", as used herein, shall
mean: (i) a tested telex, a written (including, without
limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by or on
behalf of the Fund by an Authorized Person; (ii) a
telephonic or other oral communication from a person the
Custodian reasonably believes to be an Authorized Person; or
(iii) a communication effected directly between an
electro-mechanical or electronic device or system
(including, without limitation, computers) on behalf of the
Fund. Instructions in the form of oral communications shall
be confirmed by the Fund by tested telex or in writing in
the manner set forth in clause (i) above, but the lack of
such confirmation shall in no way affect any action taken by
the Custodian in reliance upon such oral Instructions prior
to the Custodian's receipt of such confirmation. The Fund
authorizes the Custodian to record any and all telephonic or
other oral Instructions communicated to the Custodian.
(c) (2) "Special Instructions", as used herein,
shall mean Instructions countersigned or confirmed in
writing by the Treasurer or any Assistant Treasurer of the
Fund or any other person designated by the Treasurer of the
Fund in writing, which countersignature or confirmation
shall be included on the same instrument containing the
Instructions or on a separate instrument relating thereto.
(c) (3) Instructions and Special Instructions
shall be delivered to the Custodian at the address and/or
telephone, facsimile transmission or telex number agreed
upon from time to time by the Custodian and the Fund.
(c) (4) Where appropriate, Instructions and
Special Instructions shall be continuing instructions.
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3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that
its execution does not violate any of the provisions of its
respective charter, articles of incorporation, articles of
association or bylaws and all required corporate action to
authorize the execution and delivery of this Agreement has
been taken.
The Fund has furnished the Custodian with copies,
properly certified or authenticated, with all amendments or
supplements thereto, of the following documents:
(a) Certificate of Incorporation (or equivalent
document) of the Fund as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date
hereof;
(c) Resolutions of the Board of Directors of the
Fund appointing the Custodian and approving the form of this
Agreement; and
(d) The Fund's current prospectus and statements
of additional information.
The Fund shall promptly furnish the Custodian with
copies of any updates, amendments or supplements to the
foregoing documents.
In addition, the Fund has delivered or will promptly
deliver to the Custodian, copies of the Resolution(s) of its
Board of Directors or Trustees and all amendments or
supplements thereto, properly certified or authenticated,
designating certain officers or employees of the Fund who
will have continuing authority to certify to the Custodian:
(a) the names, titles, signatures and scope of authority of
all persons authorized to give Instructions or any other
notice, request, direction, instruction, certificate or
instrument on behalf of the Fund, and (b) the names, titles
and signatures of those persons authorized to countersign or
confirm Special Instructions on behalf of the Fund (in both
cases collectively, the "Authorized Persons" and
individually, an "Authorized Person"). Such Resolutions and
certificates may be accepted and relied upon by the
Custodian as conclusive evidence of the facts set forth
therein and shall be considered to be in full force and
effect until delivery to the Custodian of a similar
Resolution or certificate to the contrary. Upon delivery of
a certificate which deletes or does not include the name(s)
of a person previously authorized to give Instructions or to
countersign or confirm Special Instructions, such persons
shall no longer be considered an Authorized Person
authorized to give Instructions or to countersign or confirm
Special Instructions. Unless the certificate specifically
requires that the approval of anyone else will first have
been obtained, the Custodian will be under no obligation to
inquire into the right of the person
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giving such Instructions or Special Instructions to do so.
Notwithstanding any of the foregoing, no Instructions or
Special Instructions received by the Custodian from the Fund
will be deemed to authorize or permit any director, trustee,
officer, employee, or agent of the Fund to withdraw any of
the Assets of the Fund upon the mere receipt of such
authorization, Special Instructions or Instructions from
such director, trustee, officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC
SUBCUSTODIAN.
Except for Assets held by any Subcustodian appointed
pursuant to Sections 5(b), (c), or (d) of this Agreement,
the Custodian shall have and perform the powers and duties
hereinafter set forth in this Section 4. For purposes of
this Section 4 all references to powers and duties of the
"Custodian" shall also refer to any Domestic Subcustodian
appointed pursuant to Section 5(a).
The Bank's performance of its duties hereunder and the
day-to-day operations of the Custody Account shall be in
accordance with written service standards furnished to the
Fund, care of the Fund's agent, Fund/Plan, by the Bank from
time to time. Such service standards, as amended from time
to time, are incorporated herein by reference.
(a) Safekeeping.
The Custodian will keep safely the Assets of the
Fund which are delivered to it from time to time. The
Custodian shall not be responsible for any property of the
Fund held or received by the Fund and not delivered to the
Custodian.
The Bank shall supply to the Fund, addressed care
of its agent, Fund/Plan, from time to time as mutually
agreed upon a written statement with respect to all of the
Property in the Custody Account. In the event that the
Fund, acting through its agent, Fund/Plan, does not inform
the Bank in writing of any exceptions or objections within
thirty (30) days after receipt of such statement, the Fund
shall be deemed to have approved such statement.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold
Securities of the Fund either: (i) by physical possession of
the share certificates or other instruments representing
such Securities in registered or bearer form; or (ii) in
book-entry form by a Securities System (as hereinafter
defined) in accordance with the provisions of sub-paragraph
(3) below.
(2) The Custodian may hold registrable portfolio
Securities which have been delivered to it in physical form,
by registering the same in the name of the
5
Fund or its nominee, or in the name of the Custodian or its
nominee, for whose actions the Fund and Custodian,
respectively, shall be fully responsible. Upon the receipt
of Instructions, the Custodian shall hold such Securities in
street certificate form, so called, with or without any
indication of fiduciary capacity. However, unless it
receives Instructions to the contrary, the Custodian will
register all such portfolio Securities in the name of the
Custodian's authorized nominee. All such Securities shall
be held in an account of the Custodian containing only
assets of the Fund or only assets held by the Custodian as a
fiduciary, provided that the records of the Custodian shall
indicate at all times the Fund or other customer for which
such Securities are held in such accounts and the respective
interests therein.
(3) The Custodian may deposit and/or maintain
domestic Securities owned by the Fund in, and the Fund
hereby approves use of: (a) The Depository Trust Company;
(b) The Participants Trust Company; and (c) any book-entry
system as provided in (i) Subpart O of Treasury Circular Xx.
000, 00 XXX 306.115, (ii) Subpart B of Treasury Circular
Public Debt Series Xx. 00-00, 00 XXX 350.2, or (iii) the
book-entry regulations of federal agencies substantially in
the form of 31 CFR 306.115. Upon the receipt of Special
Instructions, the Custodian may deposit and/or maintain
domestic Securities owned by the Fund in any other domestic
clearing agency registered with the Securities and Exchange
Commission ("SEC") under Section 17A of the Securities
Exchange Act of 1934 (or as may otherwise be authorized by
the SEC to serve in the capacity of depository or clearing
agent for the Securities or other assets of investment
companies) which acts as a Securities depository. Each of
the foregoing shall be referred to in this Agreement as a
"Securities System", and all such Securities Systems shall
be listed on the attached Appendix A. Use of a Securities
System shall be in accordance with applicable Federal
Reserve Board and SEC rules and regulations, if any, and
subject to the following provisions:
(i) The Custodian may deposit the Securities
directly or through one or more agents or Subcustodians
which are also qualified to act as custodians for investment
companies.
(ii) The Custodian shall deposit and/or
maintain the Securities in a Securities System, provided
that such Securities are represented in an account
("Account") of the Custodian in the Securities System that
includes only assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(iii) The books and records of the
Custodian shall at all times identify those Securities
belonging to the Fund which are maintained in a Securities
System.
(iv) The Custodian shall pay for Securities
purchased for the account of the Fund only upon (a) receipt
of advice from the Securities System that such
6
Securities have been transferred to the Account of the
Custodian in accordance with the rules of the Securities
System, and (b) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer
Securities sold for the account of the Fund only upon (a)
receipt of advice from the Securities System that payment
for such Securities has been transferred to the Account of
the Custodian in accordance with the rules of the Securities
System, and (b) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the
Securities System relating to transfers of Securities for
the account of the Fund shall be maintained for the Fund by
the Custodian. The Custodian shall deliver to the Fund on
the next succeeding business day daily transaction reports
which shall include each day's transactions in the
Securities System for the account of the Fund. Such
transaction reports shall be delivered to the Fund or any
agent designated by the Fund pursuant to Instructions, by
computer or in such other manner as the Fund and Custodian
may agree.
(v) The Custodian shall, if requested
by the Fund pursuant to Instructions, provide the Fund with
reports obtained by the Custodian or any Subcustodian with
respect to a Securities System's accounting system, internal
accounting control and procedures for safeguarding
Securities deposited in the Securities System.
(vi) Upon receipt of Special Instructions,
the Custodian shall terminate the use of any Securities
System on behalf of the Fund as promptly as practicable and
shall take all actions reasonably practicable to safeguard
the Securities of the Fund maintained with such Securities
System.
(c) Free Delivery of Assets.
Notwithstanding any other provision of this
Agreement and except as provided in Section 3 hereof, the
Custodian, upon receipt of Special Instructions, will
undertake to make free delivery of Assets, provided such
Assets are on hand and available, in connection with the
Fund's transactions and to transfer such Assets to such
broker, dealer, Subcustodian, bank, agent, Securities System
or otherwise as specified in such Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will
exchange portfolio Securities held by it for the Fund for
other Securities or cash paid in connection with any
reorganization, recapitalization, merger, consolidation, or
conversion of convertible Securities, and will deposit any
such Securities in accordance with the terms of any
reorganization or protective plan.
7
Without Instructions, the Custodian is authorized
to exchange Securities held by it in temporary form for
Securities in definitive form, to surrender Securities for
transfer into a name or nominee name as permitted in Section
4(b)(2), to effect an exchange of shares in a stock split or
when the par value of the stock is changed, to sell any
fractional shares, and, upon receiving payment therefor, to
surrender bonds or other Securities held by it at maturity
or call.
(e) Purchases of Assets.
(1) Securities Purchases. In accordance with
Instructions, the Custodian shall, with respect to a
purchase of Securities, pay for such Securities out of
monies held for the Fund's account for which the purchase
was made, but only insofar as monies are available therein
for such purpose, and receive the portfolio Securities so
purchased. Unless the Custodian has received Special
Instructions to the contrary, such payment will be made only
upon receipt of Securities by the Custodian, a clearing
corporation of a national Securities exchange of which the
Custodian is a member, or a Securities System in accordance
with the provisions of Section 4(b)(3) hereof.
Notwithstanding the foregoing, upon receipt of Instructions:
(i) in connection with a repurchase agreement, the Custodian
may release funds to a Securities System prior to the
receipt of advice from the Securities System that the
Securities underlying such repurchase agreement have been
transferred by book-entry into the Account maintained with
such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require
that the Securities System may make payment of such funds to
the other party to the repurchase agreement only upon
transfer by book-entry of the Securities underlying the
repurchase agreement into such Account; (ii) in the case of
Interest Bearing Deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts
or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m)
hereof, the Custodian may make payment therefor before
receipt of an advice of transaction; and (iii) in the case
of Securities as to which payment for the Security and
receipt of the instrument evidencing the Security are under
generally accepted trade practice or the terms of the
instrument representing the Security expected to take place
in different locations or through separate parties, such as
commercial paper which is indexed to foreign currency
exchange rates, derivatives and similar Securities, the
Custodian may make payment for such Securities prior to
delivery thereof in accordance with such generally accepted
trade practice or the terms of the instrument representing
such Security.
(2) Other Assets Purchased. Upon receipt of
Instructions and except as otherwise provided herein, the
Custodian shall pay for and receive other Assets for the
account of the Fund as provided in Instructions.
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(f) Sales of Assets.
(1) Securities Sold. In accordance with
Instructions, the Custodian will, with respect to a sale,
deliver or cause to be delivered the Securities thus
designated as sold to the broker or other person specified
in the Instructions relating to such sale. Unless the
Custodian has received Special Instructions to the contrary,
such delivery shall be made only upon receipt of payment
therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b)
credit to the account of the Custodian with a clearing
corporation of a national Securities exchange of which the
Custodian is a member; or (c) credit to the Account of the
Custodian with a Securities System, in accordance with the
provisions of Section 4(b)(3) hereof. Notwithstanding the
foregoing, Securities held in physical form may be delivered
and paid for in accordance with "street delivery custom" to
a broker or its clearing agent, against delivery to the
Custodian of a receipt for such Securities, provided that
the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or return of, such
Securities by the broker or its clearing agent, and provided
further that the Custodian shall not be responsible for the
selection of or the failure or inability to perform of such
broker or its clearing agent or for any related loss arising
from delivery or custody of such Securities prior to
receiving payment therefor.
(2) Other Assets Sold. Upon receipt of
Instructions and except as otherwise provided herein, the
Custodian shall receive payment for and deliver other Assets
for the account of the Fund as provided in Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to the
purchase of an option or sale of a covered call option, the
Custodian shall: (a) receive and retain confirmations or
other documents, if any, evidencing the purchase or writing
of the option by the Fund; (b) if the transaction involves
the sale of a covered call option, deposit and maintain in a
segregated account the Securities (either physically or by
book-entry in a Securities System) subject to the covered
call option written on behalf of the Fund; and (c) pay,
release and/or transfer such Securities, cash or other
Assets in accordance with any notices or other
communications evidencing the expiration, termination or
exercise of such options which are furnished to the
Custodian by the Options Clearing Corporation (the "OCC"),
the securities or options exchanges on which such options
were traded, or such other organization as may be
responsible for handling such option transactions.
(2) Upon receipt of Instructions relating to the
sale of a naked option (including stock index and commodity
options), the Custodian, the Fund and the broker-dealer
shall enter into an agreement to comply with the rules of
the OCC or of any registered national securities exchange or
similar organizations(s). Pursuant to that agreement and
the Fund's Instructions, the Custodian shall: (a) receive
and retain
9
confirmations or other documents, if any, evidencing the
writing of the option; (b) deposit and maintain in a
segregated account, Securities (either physically or by
book-entry in a Securities System), cash and/or other
Assets; and (c) pay, release and/or transfer such
Securities, cash or other Assets in accordance with any such
agreement and with any notices or other communications
evidencing the expiration, termination or exercise of such
option which are furnished to the Custodian by the OCC, the
securities or options exchanges on which such options were
traded, or such other organization as may be responsible for
handling such option transactions. The Fund and the
broker-dealer shall be responsible for determining the
quality and quantity of assets held in any segregated
account established in compliance with applicable margin
maintenance requirements and the performance of other terms
of any option contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall
enter into a futures margin procedural agreement among the
Fund, the Custodian and the designated futures commission
merchant (a "Procedural Agreement"). Under the Procedural
Agreement the Custodian shall: (a) receive and retain
confirmations, if any, evidencing the purchase or sale of a
futures contract or an option on a futures contract by the
Fund; (b) deposit and maintain in a segregated account cash,
Securities and/or other Assets designated as initial,
maintenance or variation "margin" deposits intended to
secure the Fund's performance of its obligations under any
futures contracts purchased or sold, or any options on
futures contracts written by the Fund, in accordance with
the provisions of any Procedural Agreement designed to
comply with the provisions of the Commodity Futures Trading
Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar
organization(s), regarding such margin deposits; and (c)
release Assets from and/or transfer Assets into such margin
accounts only in accordance with any such Procedural
Agreements. The Fund and such futures commission merchant
shall be responsible for determining the type and amount of
Assets held in the segregated account or paid to the
broker-dealer in compliance with applicable margin
maintenance requirements and the performance of any futures
contract or option on a futures contract in accordance with
its terms.
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall
establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account
or accounts may be transferred Assets of the Fund, including
Securities maintained by the Custodian in a Securities
System pursuant to Paragraph (b)(3) of this Section 4, said
account or accounts to be maintained (i) for the purposes
set forth in Sections 4(g), 4(h) and 4(n) and (ii) for the
purpose of compliance by the Fund with the procedures
required by the SEC Investment Company Act Release Number
10666 or any
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subsequent release or releases relating to the maintenance
of segregated accounts by registered investment companies,
or (iii) for such other purposes as may be set forth, from
time to time, in Special Instructions. The Custodian shall
not be responsible for the determination of the type or
amount of Assets to be held in any segregated account
referred to in this paragraph, or for compliance by the Fund
with required procedures noted in (ii) above.
(j) Depositary Receipts.
Upon receipt of Instructions, the Custodian shall
surrender or cause to be surrendered Securities to the
depositary used for such Securities by an issuer of American
Depositary Receipts or International Depositary Receipts
(hereinafter referred to, collectively, as "ADRs"), against
a written receipt therefor adequately describing such
Securities and written evidence satisfactory to the
organization surrendering the same that the depositary has
acknowledged receipt of instructions to issue ADRs with
respect to such Securities in the name of the Custodian or a
nominee of the Custodian, for delivery in accordance with
such instructions.
Upon receipt of Instructions, the Custodian shall
surrender or cause to be surrendered ADRs to the issuer
thereof, against a written receipt therefor adequately
describing the ADRs surrendered and written evidence
satisfactory to the organization surrendering the same that
the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the
Securities underlying such ADRs in accordance with such
instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
Upon receipt of Instructions, the Custodian shall:
(a) deliver warrants, puts, calls, rights or similar
Securities to the issuer or trustee thereof (or to the agent
of such issuer or trustee) for the purpose of exercise or
sale, provided that the new Securities, cash or other
Assets, if any, acquired as a result of such actions are to
be delivered to the Custodian; and (b) deposit Securities
upon invitations for tenders thereof, provided that the
consideration for such Securities is to be paid or delivered
to the Custodian, or the tendered Securities are to be
returned to the Custodian.
Notwithstanding any provision of this Agreement to
the contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary in Instructions,
to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall notify the Fund of such action
in writing by facsimile transmission or in such other manner
as the Fund and Custodian may agree in writing.
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The Fund agrees that if it gives an Instruction
for the performance of an act on the last permissible date
of a period established by any optional offer or on the last
permissible date for the performance of such act, the Fund
shall hold the Bank harmless from any adverse consequences
in connection with acting upon or failing to act upon such
Instructions.
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the
Custodian to purchase interest bearing fixed term and call
deposits (hereinafter referred to, collectively, as
"Interest Bearing Deposits") for the account of the Fund,
the Custodian shall purchase such Interest Bearing Deposits
in the name of the Fund with such banks or trust companies,
including the Custodian, any Subcustodian or any subsidiary
or affiliate of the Custodian (hereinafter referred to as
"Banking Institutions"), and in such amounts as the Fund may
direct pursuant to Instructions. Such Interest Bearing
Deposits may be denominated in U.S. Dollars or other
currencies, as the Fund may determine and direct pursuant to
Instructions. The responsibilities of the Custodian to the
Fund for Interest Bearing Deposits issued by the Custodian
shall be that of a U.S. bank for a similar deposit. With
respect to Interest Bearing Deposits other than those issued
by the Custodian, (a) the Custodian shall be responsible for
the collection of income and the transmission of cash to and
from such accounts; and (b) the Custodian shall have no duty
with respect to the selection of the Banking Institution or
for the failure of such Banking Institution to pay upon
demand.
(m) Foreign Exchange Transactions Other than as
Principal.
(l) Upon receipt of Instructions, the Custodian
shall settle foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of the Fund with
such currency brokers or Banking Institutions as the Fund
may determine and direct pursuant to Instructions. The Fund
accepts full responsibility for its use of third party
foreign exchange brokers and for execution of said foreign
exchange contracts and understands that the Fund shall be
responsible for any and all costs and interest charges which
may be incurred as a result of the failure or delay of its
third party broker to deliver foreign exchange. The
Custodian shall have no responsibility with respect to the
selection of the currency brokers or Banking Institutions
with which the Fund deals or, so long as the Custodian acts
in accordance with Instructions, for the failure of such
brokers or Banking Institutions to comply with the terms of
any contract or option.
(2) Notwithstanding anything to the contrary
contained herein, upon receipt of Instructions the Custodian
may, in connection with a foreign exchange contract, make
free outgoing payments of cash in the form of U.S. Dollars
or foreign currency
12
prior to receipt of confirmation of such foreign exchange
contract or confirmation that the countervalue currency
completing such contract has been delivered or received.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from the Fund,
the Custodian will release or cause to be released
Securities held in custody to the pledgees designated in
such Instructions by way of pledge or hypothecation to
secure loans incurred by the Fund with various lenders
including but not limited to United Missouri Bank, n.a.;
provided, however, that the Securities shall be released
only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is required
to secure existing borrowings, further Securities may be
released or delivered, or caused to be released or delivered
for that purpose upon receipt of Instructions. Upon receipt
of Instructions, the Custodian will pay, but only from funds
available for such purpose, any such loan upon re-delivery
to it of the Securities pledged or hypothecated therefor and
upon surrender of the note or notes evidencing such loan.
In lieu of delivering collateral to a pledgee, the
Custodian, on the receipt of Instructions, shall transfer
the pledged Securities to a segregated account for the
benefit of the pledgee.
(2) Upon receipt of Special Instructions, and
execution of a separate Securities Lending Agreement, the
Custodian will release Securities held in custody to the
borrower designated in such Instructions and may, except as
otherwise provided below, deliver such Securities prior to
the receipt of collateral, if any, for such borrowing,
provided that, in case of loans of Securities held by a
Securities System that are secured by cash collateral, the
Custodian's instructions to the Securities System shall
require that the Securities System deliver the Securities of
the Fund to the borrower thereof only upon receipt of the
collateral for such borrowing. The Custodian shall have no
responsibility or liability for any loss arising from the
delivery of Securities prior to the receipt of collateral.
Upon receipt of Instructions and the loaned Securities, the
Custodian will release the collateral to the borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all stock
dividends, rights, and other items of like nature and, upon
receipt of Instructions, take action with respect to the
same as directed in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all
routine and mechanical matters in accordance with industry
standards in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
Securities or other property of the
13
Fund except as may be otherwise provided in this Agreement
or directed from time to time by Instructions from the Fund.
The Custodian may also make payments to itself or others
from the Assets for disbursements and out-of-pocket expenses
incidental to handling Securities or other similar items
relating to its duties under this Agreement, provided that
all such payments shall be accounted for to the Fund.
(q) Collections.
The Custodian shall (a) collect amounts due and
payable to the Fund with respect to portfolio Securities and
other Assets; (b) promptly credit to the account of the Fund
all income and other payments relating to portfolio
Securities and other Assets held by the Custodian hereunder
upon Custodian's receipt of such income or payments or as
otherwise agreed in writing by the Custodian and the Fund;
(c) promptly endorse and deliver any instruments required to
effect such collection; and (d) promptly execute ownership
and other certificates and affidavits for all federal,
state, local and foreign tax purposes in connection with
receipt of income or other payments with respect to
portfolio Securities and other Assets, or in connection with
the transfer of such Securities or other Assets; provided,
however, that with respect to portfolio Securities
registered in so-called street name, or physical Securities
with variable interest rates, the Custodian shall use its
best efforts to collect amounts due and payable to the Fund.
The Custodian shall notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and
Custodian may agree in writing if any amount payable with
respect to portfolio Securities or other Assets is not
received by the Custodian when due. The Custodian shall not
be responsible for the collection of amounts due and payable
with respect to portfolio Securities or other Assets that
are in default.
(r) Bank Accounts.
Upon Instructions, the Custodian shall open and
operate a bank account or accounts on the books of the
Custodian; provided that such bank account(s) shall be in
the name of the Custodian or a nominee thereof, for the
account of the Fund, and shall be subject only to draft or
order of the Custodian. The responsibilities of the
Custodian to the Fund for deposits accepted on the
Custodian's books shall be that of a U.S. bank for a similar
deposit.
(s) Dividends, Distributions and Redemptions.
To enable the Fund to pay dividends or other
distributions to shareholders of the Fund and to make
payment to shareholders who have requested repurchase or
redemption of their shares of the Fund (collectively, the
"Shares"), the Custodian shall release cash or Securities
insofar as available. In the case of cash, the Custodian
shall,
14
upon the receipt of Instructions, transfer such funds by
check or wire transfer to any account at any bank or trust
company designated by the Fund in such Instructions. In the
case of Securities, the Custodian shall, upon the receipt of
Special Instructions, make such transfer to any entity or
account designated by the Fund in such Special Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing
cash payments received for shares issued or sold from time
to time by the Fund, and shall credit such funds to the
account of the Fund. The Custodian shall notify the Fund of
Custodian's receipt of cash in payment for shares issued by
the Fund by facsimile transmission or in such other manner
as the Fund and the Custodian shall agree. Upon receipt of
Instructions, the Custodian shall: (a) deliver all federal
funds received by the Custodian in payment for shares as may
be set forth in such Instructions and at a time agreed upon
between the Custodian and the Fund; and (b) make federal
funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian, in the
amount of checks received in payment for shares which are
deposited to the accounts of the Fund.
(u) Proxies and Notices; Compliance with the
Shareholders Communication Act of 1985.
The Custodian shall deliver or cause to be
delivered to the Fund all forms of proxies, all notices of
meetings, and any other notices or announcements affecting
or relating to Securities owned by the Fund that are
received by the Custodian, any Subcustodian, or any nominee
of either of them, and, upon receipt of Instructions, the
Custodian shall execute and deliver, or cause such
Subcustodian or nominee to execute and deliver, such proxies
or other authorizations as may be required. Except as
directed pursuant to Instructions, neither the Custodian nor
any Subcustodian or nominee shall vote upon any such
Securities, or execute any proxy to vote thereon, or give
any consent or take any other action with respect thereto.
The Custodian will not release the identity of the
Fund to an issuer which requests such information pursuant
to the Shareholder Communications Act of 1985 for the
specific purpose of direct communications between such
issuer and the Fund unless the Fund directs the Custodian
otherwise in writing.
(v) Books and Records.
The Custodian shall maintain such records relating
to its activities under this Agreement as are required to be
maintained by Rule 31a-1 under the Investment Company Act of
1940 ("xxx 0000 Xxx") and to preserve them for the periods
prescribed in Rule 31a-2 under the 1940 Act. These records
shall be open for inspection by duly
15
authorized officers, employees or agents (including
independent public accountants) of the Fund during normal
business hours of the Custodian.
The Custodian shall provide accountings relating
to its activities under this Agreement as shall be agreed
upon by the Fund and the Custodian.
(w) Opinion of Fund's Independent Certified Public
Accountants.
The Custodian shall take all reasonable action as
the Fund may request to obtain from year to year favorable
opinions from the Fund's independent certified public
accountants with respect to the Custodian's activities
hereunder and in connection with the preparation of the
Fund's periodic reports to the SEC and with respect to any
other requirements of the SEC.
(x) Reports by Independent Certified Public
Accountants.
At the request of the Fund, the Custodian shall
deliver to the Fund a written report prepared by the
Custodian's independent certified public accountants with
respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's
accounting system, internal accounting control and
procedures for safeguarding cash, Securities and other
Assets, including cash, Securities and other Assets
deposited and/or maintained in a Securities System or with a
Subcustodian. Such report shall be of sufficient scope and
in sufficient detail as may reasonably be required by the
Fund and as may reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall
pay, or cause to be paid, all bills, statements, or other
obligations of the Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the relevant
provisions of this Agreement, the Custodian may appoint one
or more Domestic Subcustodians, Foreign Subcustodians,
Special Subcustodians, or Interim Subcustodians (as each are
hereinafter defined) to act on behalf of the Fund. A
Domestic Subcustodian, in accordance with the provisions of
this Agreement, may also appoint a Foreign Subcustodian,
Special Subcustodian, or Interim Subcustodian to act on
behalf of the Fund. For purposes of this Agreement, all
Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians and Interim Subcustodians shall be referred to
collectively as "Subcustodians".
16
(a) Domestic Subcustodians.
The Custodian may, at any time and from time to
time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act or any trust company or other entity, any of which
meet the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to
act for the Custodian on behalf of the Fund as a
subcustodian for purposes of holding Assets of the Fund and
performing other functions of the Custodian within the
United States (a "Domestic Subcustodian"). The Fund shall
approve in writing the appointment of the proposed Domestic
Subcustodian; and the Custodian's appointment of any such
Domestic Subcustodian shall not be effective without such
prior written approval of the Fund. Each such duly approved
Domestic Subcustodian shall be listed on Appendix A attached
hereto, as it may be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a
Domestic Subcustodian to appoint, any bank, trust company or
other entity meeting the requirements of an "eligible
foreign custodian" under Section 17(f) of the 1940 Act and
the rules and regulations thereunder to act for the
Custodian on behalf of the Fund as a subcustodian or
sub-subcustodian (if appointed by a Domestic Subcustodian)
for purposes of holding Assets of the Fund and performing
other functions of the Custodian in countries other than the
United States of America (hereinafter referred to as a
"Foreign Subcustodian" in the context of either a
subcustodian or a sub-subcustodian); provided that the
Custodian shall have obtained written confirmation from the
Fund of the approval of the Board of Directors or other
governing body of the Fund (which approval may be withheld
in the sole discretion of such Board of Directors or other
governing body or entity) with respect to (i) the identity
of any proposed Foreign Subcustodian (including branch
designation), (ii) the country or countries in which, and
the securities depositories or clearing agencies
(hereinafter "Securities Depositories and Clearing
Agencies"), if any, through which, the Custodian or any
proposed Foreign Subcustodian is authorized to hold
Securities and other Assets of the Fund, and (iii) the form
and terms of the subcustodian agreement to be entered into
with such proposed Foreign Subcustodian. Each such duly
approved Foreign Subcustodian and the countries where and
the Securities Depositories and Clearing Agencies through
which they may hold Securities and other Assets of the Fund
shall be listed on Appendix A attached hereto, as it may be
amended, from time to time. 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 Foreign Subcustodian is authorized to act, in order
that there shall be sufficient time for the Custodian, or
any Domestic Subcustodian, to effect the appropriate
arrangements with a proposed Foreign Subcustodian, including
obtaining approval as provided in this Section 5(b). In
connection with the appointment of any Foreign Subcustodian,
the Custodian shall, or
17
shall cause the Domestic Subcustodian to, enter into a
subcustodian agreement with the Foreign Subcustodian in form
and substance approved by the Fund. The Custodian shall not
consent to the amendment of, and shall cause any Domestic
Subcustodian not to consent to the amendment of, any
agreement entered into with a Foreign Subcustodian, which
materially affects the Fund's rights under such agreement,
except upon prior written approval of the Fund pursuant to
Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that
the Fund shall invest in an Asset to be held in a country in
which no Foreign Subcustodian is authorized to act, the
Custodian shall notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and
Custodian shall agree in writing of the unavailability of an
approved Foreign Subcustodian in such country; and upon the
receipt of Special Instructions from the Fund, the Custodian
shall, or shall cause its Domestic Subcustodian to, appoint
or approve an entity (referred to herein as an "Interim
Subcustodian") designated in such Special Instructions to
hold such Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the
Custodian shall, on behalf of the Fund, appoint one or more
banks, trust companies or other entities designated in such
Special Instructions to act for the Custodian on behalf of
the Fund as a subcustodian for purposes of: (i) effecting
third-party repurchase transactions with banks, brokers,
dealers or other entities through the use of a common
custodian or subcustodian; (ii) providing depository and
clearing agency services with respect to certain variable
rate demand note Securities, (iii) providing depository and
clearing agency services with respect to dollar denominated
Securities, and (iv) effecting any other transactions
designated by the Fund in such Special Instructions. Each
such designated subcustodian (hereinafter referred to as a
"Special Subcustodian") shall be listed on Appendix A
attached hereto, as it may be amended from time to time. In
connection with the appointment of any Special Subcustodian,
the Custodian shall enter into a subcustodian agreement with
the Special Subcustodian in form and substance approved by
the Fund in Special Instructions. The Custodian shall not
amend any subcustodian agreement entered into with a Special
Subcustodian, or waive any rights under such agreement,
except upon prior approval pursuant to Special Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion
upon notification to the Fund, terminate any Subcustodian of
the Fund in accordance with the termination provisions under
the applicable subcustodian agreement, and upon the receipt
of Special
18
Instructions, the Custodian will terminate any Subcustodian
in accordance with the termination provisions under the
applicable subcustodian agreement.
(f) Certification Regarding Foreign Subcustodians.
Upon request of the Fund, the Custodian shall
deliver to the Fund a certificate stating: (i) the identity
of each Foreign Subcustodian then acting on behalf of the
Custodian; (ii) the countries in which and the Securities
Depositories and Clearing Agencies through which each such
Foreign Subcustodian is then holding cash, Securities and
other Assets of the Fund; and (iii) such other information
as may be requested by the Fund, and as the Custodian shall
be reasonably able to obtain, to evidence compliance with
rules and regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to the Fund for all
losses, damages and reasonable costs and expenses suffered
or incurred by the Fund resulting from the gross negligence
or willful misfeasance of the Custodian; provided, however,
in no event shall the Custodian be liable for special,
indirect or consequential damages arising under or in
connection with this Agreement.
(b) Actions Prohibited by Applicable Law, Events
Beyond Custodian's Control, Sovereign Risk, Etc.
In no event shall the Custodian or any Domestic
Subcustodian incur liability hereunder if the Custodian or
any Subcustodian or Securities System, or any subcustodian,
Securities System, Securities Depository or Clearing Agency
utilized by the Custodian or any such Subcustodian, or any
nominee of the Custodian or any Subcustodian (individually,
a "Person") is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be
performed, by reason of: (i) any provision of any present or
future law or regulation or order of the United States of
America, or any state thereof, or of any foreign country, or
political subdivision thereof or of any court of competent
jurisdiction (and neither the Custodian nor any other Person
shall be obligated to take any action contrary thereto); or
(ii) any event beyond the control of the Custodian or other
Person such as armed conflict, riots, strikes, lockouts,
labor disputes, equipment or transmission failures, natural
disasters, or failure of the mails, transportation,
communications or power supply; or (iii) any "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
19
authority of currency restrictions, exchange controls,
taxes, levies or other charges affecting the Fund's Assets;
or acts of armed conflict, terrorism, insurrection or
revolution; or any other act or event beyond the Custodian's
or such other Person's control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic
Subcustodian shall have any liability in respect of any
loss, damage or expense suffered by the Fund, insofar as
such loss, damage or expense arises from the performance of
the Custodian or any Domestic Subcustodian in reliance upon
records that were maintained for the Fund by entities other
than the Custodian or any Domestic Subcustodian prior to the
Custodian's employment hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians shall
be entitled to receive and act upon advice of counsel of its
own choosing on all matters. The Custodian and all Domestic
Subcustodians shall be without liability for any actions
taken or omitted in good faith pursuant to the advice of
counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may
rely upon the advice of the Fund and upon statements of the
Fund's accountants and other persons believed by it in good
faith to be expert in matters upon which they are consulted,
and neither the Custodian nor any Domestic Subcustodian
shall be liable for any actions taken or omitted, in good
faith, pursuant to such advice or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall
be fully protected and indemnified in acting as a custodian
hereunder upon any Resolutions of the Board of Directors or
Trustees, Instructions, Special Instructions, advice,
notice, request,
consent, certificate, instrument or paper appearing to it to
be genuine and to have been properly executed and shall,
unless otherwise specifically provided herein, be entitled
to receive as conclusive proof of any fact or matter
required to be ascertained from the Fund hereunder a
certificate signed by any officer of the Fund authorized to
countersign or confirm Special Instructions.
20
(g) Exceptions from Liability.
Without limiting the generality of any other
provisions hereof, neither the Custodian nor any Domestic
Subcustodian shall be under any duty or obligation to
inquire into, nor be liable for:
(i) the validity of the issue of any
Securities purchased by or for the Fund, the legality of the
purchase thereof or evidence of ownership required to be
received by the Fund, or the propriety of the decision to
purchase or amount paid therefor;
(ii) the legality of the sale of any
Securities by or for the Fund, or the propriety of the
amount for which the same were sold; or
(iii) any other expenditures,
encumbrances of Securities, borrowings or similar actions
with respect to the Fund's Assets; and may, until notified
to the contrary, presume that all Instructions or Special
Instructions received by it are not in conflict with or in
any way contrary to any provisions of the Fund's Declaration
of Trust, Partnership Agreement, Articles of Incorporation
or By-Laws or votes or proceedings of the shareholders,
trustees, partners or directors of the Fund, or the Fund's
currently effective Registration Statement on file with the
SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic Subcustodians
The Custodian shall be liable for the acts or
omissions of any Domestic Subcustodian to the same extent as
if such actions or omissions were performed by the Custodian
itself.
(b) Liability for Acts and Omissions of Foreign
Subcustodians.
The Custodian shall be liable to the Fund for any
loss or damage to the Fund caused by or resulting from the
acts or omissions of any Foreign Subcustodian to the extent
that, under the terms set forth in the subcustodian
agreement between the Custodian or a Domestic Subcustodian
and such Foreign Subcustodian, the Foreign Subcustodian has
failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement and the Custodian
or Domestic Subcustodian recovers from the Foreign
Subcustodian under the applicable subcustodian agreement.
(c) Securities Systems, Interim Subcustodians,
Special Subcustodians, Securities Depositories and Clearing
Agencies.
21
The Custodian shall not be liable to the Fund for
any loss, damage or expense suffered or incurred by the Fund
resulting from or occasioned by the actions or omissions of
a Securities System, Interim Subcustodian, Special
Subcustodian, or Securities Depository and Clearing Agency
unless such loss, damage or expense is caused by, or results
from, the gross negligence or willful misfeasance of the
Custodian.
(d) Defaults or Insolvencies of Brokers, Banks,
Etc.
The Custodian shall not be liable for any loss,
damage or expense suffered or incurred by the Fund resulting
from or occasioned by the actions, omissions, neglects,
defaults or insolvency of any broker, bank, trust company
or any other person with whom the Custodian may deal (other
than any of such entities acting as a Subcustodian,
Securities System or Securities Depository and Clearing
Agency, for whose actions the liability of the Custodian is
set out elsewhere in this Agreement) unless such loss,
damage or expense is caused by, or results from, the gross
negligence or willful misfeasance of the Custodian.
(e) Reimbursement of Expenses.
The Fund agrees to reimburse the Custodian for all
out-of-pocket expenses incurred by the Custodian in
connection with this Agreement, but excluding salaries and
usual overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by Fund.
Subject to the limitations set forth in this
Agreement, the Fund agrees to indemnify and hold harmless
the Custodian and its nominees from all losses, damages and
expenses (including attorneys' fees) suffered or incurred by
the Custodian or its nominee caused by or arising from
actions taken by the Custodian, its employees or agents in
the performance of its duties and obligations under this
Agreement, including, but not limited to, any
indemnification obligations undertaken by the Custodian
under any relevant subcustodian agreement; provided,
however, that such indemnity shall not apply to the extent
the Custodian is liable under Sections 6 or 7 hereof.
If the Fund requires the Custodian to take any
action with respect to Securities, which action involves the
payment of money or which may, in the opinion of the
Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or
incurring liability of some other form, the Fund, as a
prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and
form satisfactory to it.
22
(b) Indemnification by Custodian.
Subject to the limitations set forth in this
Agreement and in addition to the obligations provided in
Sections 6 and 7, the Custodian agrees to indemnify and hold
harmless the Fund from all losses, damages and expenses
suffered or incurred by the Fund caused by the gross
negligence or willful misfeasance of the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions, the
Custodian or any Subcustodian, Securities System, or
Securities Depository or Clearing Agency acting either
directly or indirectly under agreement with the Custodian
(each of which for purposes of this Section 9 shall be
referred to as "Custodian"), makes any payment or transfer
of funds on behalf of the Fund as to which there would be,
at the close of business on the date of such payment or
transfer, insufficient funds held by the Custodian on behalf
of the Fund, the Custodian may, in its discretion without
further Instructions, provide an advance ("Advance") to the
Fund in an amount sufficient to allow the completion of the
transaction by reason of which such payment or transfer of
funds is to be made. In addition, in the event the
Custodian is directed by Instructions to make any payment or
transfer of funds on behalf of the Fund as to which it is
subsequently determined that the Fund has overdrawn its cash
account with the Custodian as of the close of business on
the date of such payment or transfer, said overdraft shall
constitute an Advance. Any Advance shall be payable by the
Fund on demand by Custodian, unless otherwise agreed by the
Fund and the Custodian, and shall accrue interest from the
date of the Advance to the date of payment by the Fund to
the Custodian at a rate agreed upon in writing from time to
time by the Custodian and the Fund. It is understood that
any transaction in respect of which the Custodian shall have
made an Advance, including but not limited to a foreign
exchange contract or transaction in respect of which the
Custodian is not acting as a principal, is for the account
of and at the risk of the Fund, and not, by reason of such
Advance, deemed to be a transaction undertaken by the
Custodian for its own account and risk. The Custodian and
the Fund acknowledge that the purpose of Advances is to
finance temporarily the purchase or sale of Securities for
prompt delivery in accordance with the settlement terms of
such transactions or to meet emergency expenses not
reasonably foreseeable by the Fund. The Custodian shall
promptly notify the Fund of any Advance. Such notification
shall be sent by facsimile transmission or in such other
manner as the Fund and the Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the
Custody Account to secure payment of fees and expenses for
the services rendered under this Agreement. If the Bank
advances cash or securities to the Fund for any purpose or
in the event that the
23
Bank or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in
connection with the performance of its duties hereunder,
except such as may arise from its or its nominee's negligent
action, negligent failure to act or willful misconduct, any
Property at any time held for the Custody Account shall be
security therefor and the Fund hereby grants a security
interest therein to the Bank. The Fund shall promptly
reimburse the Bank for any such advance of cash or
securities or any such taxes, charges, expenses,
assessments, claims or liabilities upon request for payment,
but should the Fund fail to so reimburse the Bank, the Bank
shall be entitled to dispose of such Property to the extent
necessary to obtain reimbursement. The Bank shall be
entitled to debit any account of the Fund with the Bank
including, without limitation, the Custody Account, in
connection with any such advance and any interest on such
advance as the Bank deems reasonable.
11. COMPENSATION.
Payment for the Bank's compensation for services
rendered hereunder shall be the responsibility of the Fund.
The Fund represents that by separate agreement it has
appointed Fund/Plan as its agent, and that Fund/Plan, as
agent for the Fund, has agreed to pay the compensation
payable in respect of such services promptly upon receipt of
statements therefore. The Fund shall pay to Fund/Plan fees
for services (including the Bank's custodian services) in
accordance with the terms of an agreement between Fund/Plan
and the Fund. The Fund hereby directs the Bank to (i) send
all statements for compensation to its attention care of
Fund/Plan at the following address: Fund/Plan Services,
Inc., 0 X. Xxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention:
Xx. Xxxxx Xxxxxxx, Senior Vice President, and (ii) accept
all payments made by Fund/Plan in the Fund's name as if such
payments were made directly by the Fund. The Custodian's
compensation for services rendered hereunder is set forth in
an agreement between the Bank and Fund/Plan. Should
Fun/Plan fail to pay or remit such compensation to the Bank,
the Bank will be entitled to debit the Custody Account
directly for such compensation. In the absence of
sufficient cash in the Custody Account to cover
compensation, the Fund shall promptly pay the bank for the
unpaid compensation due hereunder. In the absence of prompt
payments for the Fund of the unpaid compensation, the Bank
shall be entitled to exercise, in addition to all other
rights existing in law or equity, the rights set forth in
Section 10 hereof.
12. POWERS OF ATTORNEY.
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.
24
13. TERMINATION AND ASSIGNMENT.
The Fund or the Custodian may terminate this
Agreement by notice in writing, delivered or mailed, postage
prepaid (certified mail, return receipt requested) to the
other not less than 90 days prior to the date upon which
such termination shall take effect. Upon termination of
this Agreement, the Fund shall pay to the Custodian such
fees as may be due the Custodian hereunder as well as its
reimbursable disbursements, costs and expenses paid or
incurred. Upon termination of this Agreement, the Custodian
shall deliver, at the terminating party's expense, all
Assets held by it hereunder to the Fund or as otherwise
designated by the Fund by Special Instructions. Upon such
delivery, the Custodian shall have no further obligations or
liabilities under this Agreement except as to the final
resolution of matters relating to activity occurring prior
to the effective date of termination.
This Agreement may not be assigned by the
Custodian or the Fund without the respective consent of the
other, duly authorized by a resolution by its Board of
Directors or Trustees.
14. NOTICES.
Notices, requests, instructions and other writings
delivered to the Fund at The World Trade Center-Baltimore,
000 X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
postage prepaid, or to such other address as the Fund may
have designated to the Custodian in writing, shall be deemed
to have been properly delivered or given to the Fund.
The Fund shall give prior notice to the Bank of
any change in its place of incorporation or organization,
mailing address, or sponsors, any significant change in
management, investment objectives, fees or redemption rights
and any change to the appointment of Fund/Plan as its agent.
Notices, requests, instructions and other writings
delivered to the Securities Administration Department of the
Custodian at its office at 000 Xxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx, or mailed postage prepaid, to the Custodian's
Securities Xxxxxxxxxxxxxx Xxxxxxxxxx, Xxxx Xxxxxx Xxx 000,
Xxxxxx Xxxx, Xxxxxxxx 00000, or to such other addresses as
the Custodian may have designated to the Fund in writing,
shall be deemed to have been properly delivered or given to
the Custodian hereunder; provided, however, that procedures
for the delivery of Instructions and Special Instructions
shall be governed by Section 2(c) hereof.
25
15. MISCELLANEOUS.
(a) This Agreement is executed and delivered in
the State of Missouri and shall be governed by the laws of
such state.
(b) All of the terms and provisions of this
Agreement shall be binding upon, and inure to the benefit
of, and be enforceable by the respective successors and
assigns of the parties hereto.
(c) No provisions of this Agreement may be
amended, modified or waived, in any manner except in
writing, properly executed by both parties hereto; provided,
however, Appendix A may be amended from time to time as
Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians, and Securities Depositories and Clearing
Agencies are approved or terminated according to the terms
of this Agreement.
(d) The captions in this Agreement are included
for convenience of reference only, and in no way define or
delimit any of the provisions hereof or otherwise affect
their construction or effect.
(e) This Agreement shall be effective as of the
date of execution hereof.
(f) This Agreement may be executed simultaneously
in two or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and
the same instrument.
(g) The following terms are defined terms within
the meaning of this Agreement, and the definitions thereof
are found in the following sections of the Agreement:
Term Section
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2(b)
Authorized Person 3(d) (b)
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2(c)(1)
Interim Subcustodian 5(c)
26
Interest Bearing Deposit 4(1)
Liens 10
OCC 4(g)(2)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2(a)
Securities Depositories and 5(b)
Clearing Agencies
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)(iii)
Special Instruction 2(c)(2)
Special Subcustodian 5(d)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this
Agreement is held to be illegal, in conflict with any law or
otherwise invalid by any court of competent jurisdiction,
the remaining portion or portions shall be considered
severable and shall not be affected, and the rights and
obligations of the parties shall be construed and enforced
as if this Agreement did not contain the particular part,
term or provision held to be illegal or invalid.
(i) This Agreement constitutes the entire
understanding and agreement of the parties hereto with
respect to the subject matter hereof, and accordingly
supersedes, as of the effective date of this Agreement, any
custodian agreement heretofore in effect between the Fund
and the Custodian.
27
IN WITNESS WHEREOF, the parties hereto have caused this
Custody Agreement to be executed by their duly respective
authorized officers.
DEM, Inc. UMB Bank, n.a.
By: /s/ XXXXXX X. XXXXXXX, XX. By: /s/ XXXXX X.
XXXXXXX
Name: Xxxxxx X. Xxxxxxx, Xx. Name: Xxxxx X.
Xxxxxxx
Title: President Title:
Vice President
Date: December 1, 1995 Date:
November 30, 1995
28
APPENDIX A
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
Xxxxxx Xxxxxxx Trust Company (Foreign Securities Only)
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS AND CLEARING AGENCIES
Euroclear
DEM, Inc. UMB Bank, n.a.
By: /s/ XXXXXX X. XXXXXXX, XX. By: /s/ XXXXX X.
XXXXXXX
Name: Xxxxxx X. Xxxxxxx, Xx. Name: Xxxxx X.
Xxxxxxx
Title: President Title:
Vice President
Date: December 1, 1995 Date:
November 30, 1995
29
