CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT made the 25th day of April, 1996, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of
the state of Missouri, having its trust office located at x00 Xxxx 00xx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and each registered investment
company listed on Exhibit A hereto, as it may be amended from time to time, each
a having its principal office and place of business at 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 (each a "Fund" and collectively the "Funds").
WITNESSETH:
WHEREAS, each Fund desires to appoint Investors Fiduciary Trust Company
as custodian of the securities and monies of such Fund's investment portfolio
and as its agent to perform certain investment accounting and recordkeeping
functions; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment; NOW THEREFORE, for and 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. Each Fund hereby constitutes and appoints
Custodian as:
A. Custodian of the securities and monies at any time owned by the Fund; and
B. Agent to perform certain accounting and recordkeeping functions relating to
portfolio transactions required of a duly registered investment company under
Rule 31a of the Investment Company Act of 1940 (the "1940 Act") and to calculate
the net asset value of the Fund.
2. REPRESENTATIONS AND WARRANTIES.
A. Each Fund hereby represents, warrants and acknowledges to Custodian:
1. That it is a corporation duly organized and existing and in good standing
under the laws of its state of organization, and that it is registered under the
1940 Act; and
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2. That it has the requisite power and authority under
applicable law, its articles of incorporation and its
bylaws to enter into this Agreement; that it has
taken all requisite action necessary to appoint
Custodian as custodian and investment accounting and
recordkeeping agent for the Fund; that this Agreement
has been duly executed and delivered by Fund; and
that this Agreement constitutes a legal, valid and
binding obligation of Fund, enforceable in accordance
with its terms.
B. Custodian hereby represents, warrants and acknowledges to the Funds:
1. That it is a trust company duly organized and existing and in good standing
under the laws of the State of Missouri; and
2. That it has the requisite power and authority under
applicable law, its charter and its bylaws to enter
into and perform this Agreement; that this Agreement
has been duly executed and delivered by Custodian;
and that this Agreement constitutes a legal, valid
and binding obligation of Custodian, enforceable in
accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Except as permitted by the 1940 Act, each Fund will deliver or
cause to be delivered to Custodian on the effective date of
this Agreement, or as soon thereafter as practicable, and from
time to time thereafter, all portfolio securities acquired by
it and monies then owned by it or from time to time coming
into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies
not so delivered.
B. Delivery of Accounts and Records
Each Fund shall turn over or cause to be turned over to
Custodian all of the Fund's relevant accounts and records
previously maintained. Custodian shall be entitled to rely
conclusively on the completeness and correctness of the
accounts and records turned over to it, and each Fund shall
indemnify and hold Custodian
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harmless of and from any and all expenses, damages and losses
whatsoever arising out of or in connection with any error,
omission, inaccuracy or other deficiency of such Fund's
accounts and records or in the failure of such Fund to
provide, or to provide in a timely manner, any accounts,
records or information needed by the Custodian to perform its
functions hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets
of each Fund delivered to it from time to time segregated in a
separate account, and if any Fund is comprised of more than
one portfolio of investment securities (each a "Portfolio")
Custodian shall keep the assets of each Portfolio segregated
in a separate account. Custodian will not deliver, assign,
pledge or hypothecate any such assets to any person except as
permitted by the provisions of this Agreement or any agreement
executed by it according to the terms of Section 3.S. of this
Agreement. Upon delivery of any such assets to a subcustodian
pursuant to Section 3.S. of this Agreement, Custodian will
create and maintain records identifying those assets which
have been delivered to the subcustodian as belonging to the
applicable Fund, by Portfolio if applicable. The Custodian is
responsible for the safekeeping of the securities and monies
of the Funds only until they have been transmitted to and
received by other persons as permitted under the terms of this
Agreement, except for securities and monies transmitted to
subcustodians appointed under Section 3.S. of this Agreement,
for which Custodian remains responsible to the extent provided
in Section 3.S. hereof. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust
Company (DTC), Treasury/Federal Reserve Book Entry System (Fed
System), Participant Trust Company (PTC) or other depository
approved by the Funds (as such entities are defined at 17 CFR
Section 270.17f-4(b)) (each a "Depository" and collectively,
the "Depositories").
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D. Registration of Securities
The Custodian shall at all times hold registered securities of
the Funds in the name of the Custodian, the applicable Fund,
or a nominee of either of them, unless specifically directed
by instructions to hold such registered securities in
so-called "street name," provided that, in any event, all such
securities and other assets shall be held in an account of the
Custodian containing only assets of the applicable Fund, or
only assets held by the Custodian as a fiduciary or custodian
for customers, and provided further, that the records of the
Custodian at all times shall indicate the Fund or other
customer for which such securities and other assets are held
in such account and the respective interests therein. If,
however, any Fund directs the Custodian to maintain securities
in "street name", notwithstanding anything contained herein to
the contrary, the Custodian shall be obligated only to utilize
its best efforts to timely collect income due the Fund on such
securities and to notify the Fund of relevant corporate
actions including, without limitation, pendency of calls,
maturities, tender or exchange offers. All securities, and the
ownership thereof by the applicable Fund, which are held by
Custodian hereunder, however, shall at all times be
identifiable on the records of the Custodian. Each Fund agrees
to hold Custodian and its nominee harmless for any liability
as a shareholder of record of its securities held in custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of a Fund for other
securities or cash issued or paid in connection with any
reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or
otherwise, and will deposit any such securities in accordance
with the terms of any reorganization or protective plan.
Without instructions, Custodian is authorized to exchange
securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par
value of the stock is changed, and, upon receiving payment
therefor, to surrender
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bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that Custodian
shall receive instructions prior to surrendering any
convertible security.
F. Purchases of Investments of a Fund - Other Than Options and Futures Each Fund
will, on each business day on which a purchase of securities (other than options
and futures) shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares and the principal amount purchased, and accrued
interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes and other
expenses payable in connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer through whom
the purchase was made; and
9. Whether the security is to be received in certificated form or via a specifie
Depository.
In accordance with such instructions, Custodian will pay for
out of monies held for the account of the applicable Fund, but
only insofar as such monies are available for such purpose,
and receive the portfolio securities so purchased by or for
the account of the applicable Fund, except that Custodian may
in its sole discretion advance funds to the Fund which may
result in an overdraft because the monies held by the
Custodian on behalf of the Fund are insufficient to pay the
total amount payable upon such purchase. Except as otherwise
instructed by the applicable Fund, such payment shall be made
by the Custodian only upon receipt of securities: (a) by the
Custodian; (b) by a clearing corporation of a national
exchange of which
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the Custodian is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) in the case of a repurchase
agreement, the Custodian may release funds to a Depository
prior to the receipt of advice from the Depository that the
securities underlying such repurchase agreement have been
transferred by book-entry into the account maintained with
such Depository by the Custodian, on behalf of its customers,
provided that the Custodian's instructions to the Depository
require that the Depository make payment of such funds only
upon transfer by book-entry of the securities underlying the
repurchase agreement in such account; (ii) in the case of time
deposits, call account deposits, currency deposits and other
deposits, foreign exchange transactions, futures contracts or
options, the Custodian may make payment therefor before
receipt of an advice or confirmation evidencing said deposit
or entry into such transaction; and (iii) in the case of the
purchase of securities, the settlement of which occurs outside
of the United States of America, the Custodian may make, or
cause a subcustodian appointed pursuant to Section 3.S.2. of
this Agreement to make, payment therefor in accordance with
generally accepted local custom and market practice.
G. Sales and Deliveries of Investments of a Fund - Other Than Options and
Futures
Each Fund will, on each business day on which a sale of investment securities
other than options and futures) of such Fund has been made, deliver to Custodian
instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares and principal amount sold, and accrued interest, if
any;
4. The date on which the securities sold were purchased or other information
identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
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7. The sale price per unit and the brokerage commission, taxes or other
expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or person to
whom the sale was made.
In accordance with such instructions, Custodian will deliver
or cause to be delivered the securities thus designated as
sold for the account of the applicable Fund to the broker or
other person specified in the instructions relating to such
sale. Except as otherwise instructed by the applicable Fund,
such delivery shall be made upon receipt of: (a) payment
therefor in such form as is satisfactory to the Custodian; (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, on behalf of its customers, with a Depository.
Notwithstanding the foregoing: (i) in the case of securities
held in physical form, such securities shall be delivered in
accordance with "street delivery custom" to a broker or its
clearing agent; or (ii) in the case of the sale of securities,
the settlement of which occurs outside of the United States of
America, the Custodian may make, or cause a subcustodian
appointed pursuant to Section 3.S.2. of this Agreement to
make, such delivery upon payment therefor in accordance with
generally accepted local custom and market practice.
H. Purchases or Sales of Options and Futures Each Fund will, on each business
day on which a purchase or sale of the following options and/or futures shall be
made by it, deliver to Custodian instructions which shall specify with respect
to each such purchase or sale:
1. If applicable, the name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
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d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring or
closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom the sale or
purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring or
closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through whom the
sale or purchase was made, or other applicable settlement
instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and, when available,
the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
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e. The need for a segregated margin account (in
addition to instructions, and if not already
in the possession of Custodian, Fund shall
deliver a substantially complete and
executed custodial safekeeping account and
procedural agreement which shall be
incorporated by reference into this Custody
Agreement); and
f. The name and address of the futures commission merchant through whom the sale
or purchase was made, or other applicable settlement instructions.
5. Options on Index Future Contracts
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of the applicable Fund, and
subject to such additional terms and conditions as Custodian may require:
1. Upon receipt of instructions, Custodian will release or cause to be released
securities held in custody to the pledgee designated
in such instructions by way of pledge or
hypothecation to secure any loan incurred by such
Fund; provided, however, that the securities shall be
released only upon payment to Custodian of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made, further securities may be released or caused to
be released for that purpose upon receipt of
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instructions. Upon receipt of instructions, Custodian
will pay, but only from funds available for such
purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated
in such instructions; provided, however, that the
securities will be released only upon deposit with
Custodian of full cash collateral as specified in
such instructions, and that such Fund will retain the
right to any dividends, interest or distribution on
such loaned securities. Upon receipt of instructions
and the loaned securities, Custodian will release the
cash collateral to the borrower.
J. Routine Matters
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of the Funds except as may be
otherwise provided in this Agreement or directed from time to
time by the applicable Fund in writing.
K. Deposit Accounts
Custodian will open and maintain one or more special purpose
deposit accounts for each Fund in the name of Custodian
("Accounts"), subject only to draft or order by Custodian upon
receipt of instructions. All monies received by Custodian from
or for the account of any Fund shall be deposited in the
appropriate Accounts. Barring events not in the control of the
Custodian such as strikes, lockouts or labor disputes, riots,
war or equipment or transmission failure or damage, fire,
flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its
control, at 9:00 a.m., Kansas City time, on the second
business day after deposit of any check into an Account,
Custodian agrees to make Fed Funds available to the applicable
Fund in the amount of the check. Deposits made by Federal
Reserve wire will be available to the Fund immediately and ACH
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wires will be available to the Fund on the next business day.
Income earned on the portfolio securities will be credited to
the Fund based on the schedule attached as Exhibit A. The
Custodian will be entitled to reverse any credited amounts
where credits have been made and monies are not finally
collected. If monies are collected after such reversal, the
Custodian will credit the Fund in that amount. Custodian may
open and maintain Accounts in such banks or trust companies as
may be designated by it or by the applicable Fund in writing,
all such Accounts, however, to be in the name of Custodian and
subject only to its draft or order. Funds received and held
for the account of different Portfolios shall be maintained in
separate Accounts established for each Portfolio.
L. Income and Other Payments to the Funds
Custodian will:
1. Collect, claim and receive and deposit for the
account of the applicable Fund all income and other
payments which become due and payable on or after the
effective date of this Agreement with respect to the
securities deposited under this Agreement, and credit
the account of such Fund in accordance with the
schedule attached hereto as Exhibit A. If, for any
reason, the Fund is credited with income that is not
subsequently collected, Custodian may reverse that
credited amount.
2. Execute ownership and other certificates and affidavits for all federal,
state and local tax purposes in connection with the collection of bond and note
coupons; and
3. Take such other action as may be necessary or proper in connection with:
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for payment
of:
1. all coupons and other income items requiring presentation;
and
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2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
should reasonably be expected to have knowledge; and
b. the endorsement for collection, in the name of the applicable Fund,
of all checks, drafts or other negotiable instruments.
Custodian, however, will not be required to institute suit or
take other extraordinary action to enforce collection except
upon receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or
other actions. Custodian will receive, claim and collect all
stock dividends, rights and other similar items and will deal
with the same pursuant to instructions.
M. Payment of Dividends and Other Distributions
On the declaration of any dividend or other distribution on
the shares of capital stock of any Fund ("Fund Shares") by the
Board of Directors of such Fund, such Fund shall deliver to
Custodian instructions with respect thereto. On the date
specified in such instructions for the payment of such
dividend or other distribution, Custodian will pay out of the
monies held for the account of such Fund, insofar as the same
shall be available for such purposes, and credit to the
account of the Dividend Disbursing Agent for such Fund, such
amount as may be specified in such instructions.
N. Shares of a Fund Purchased by Such Fund
Whenever any Fund Shares are repurchased or redeemed by a
Fund, such Fund or its agent shall advise Custodian of the
aggregate dollar amount to be paid for such shares and shall
confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the
account of such Fund and either deposit the same in the
account maintained for the purpose of paying for the
repurchase or redemption of Fund Shares or deliver the same in
accordance with such advice. Custodian shall not have any duty
or responsibility to determine that Fund Shares have been
removed from the proper shareholder account or
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accounts or that the proper number of Fund Shares have been
canceled and removed from the shareholder records.
O. Shares of a Fund Purchased from Such Fund
Whenever Fund Shares are purchased from any Fund, such Fund
will deposit or cause to be deposited with Custodian the
amount received for such shares. Custodian shall not have any
duty or responsibility to determine that Fund Shares purchased
from any Fund have been added to the proper shareholder
account or accounts or that the proper number of such shares
have been added to the shareholder records.
P. Proxies and Notices
Custodian will promptly deliver or mail or have delivered or
mailed to the applicable Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to securities
held by Custodian for such Fund and will, upon receipt of
instructions, execute and deliver or cause its nominee to
execute and deliver or mail or have delivered or mailed such
proxies or other authorizations as may be required. Except as
provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee
will exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver with
respect thereto, or take any other similar action.
Q. Disbursements
Custodian will pay or cause to be paid, insofar as funds are
available for the purpose, bills, statements and other
obligations of each Fund (including but not limited to
obligations in connection with the conversion, exchange or
surrender of securities owned by such Fund, interest charges,
dividend disbursements, taxes, management fees, custodian
fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other
operating expenses of such Fund) pursuant to instructions of
such Fund setting forth the name of the
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person to whom payment is to be made, the amount of the payment,
and the purpose of the payment.
R. Daily Statement of Accounts
Custodian will, within a reasonable time, render to each Fund
a detailed statement of the amounts received or paid and of
securities received or delivered for the account of the Fund
during each business day. Custodian will, from time to time,
upon request by any Fund, render a detailed statement of the
securities and monies held for such Fund under this Agreement,
and Custodian will maintain such books and records as are
necessary to enable it to do so. Custodian will permit such
persons as are authorized by any Fund, including such Fund's
independent public accountants, reasonable access to such
records or will provide reasonable confirmation of the
contents of such records, and if demanded, Custodian will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written instructions
of any Fund or as demanded by federal or state regulatory
agencies, Custodian will instruct any subcustodian to permit
such persons as are authorized by such Fund, including such
Fund's independent public accountants, reasonable access to
such records or to provide reasonable confirmation of the
contents of such records, and to permit such agencies to
examine the books, records and securities held by such
subcustodian which relate to such Fund.
S. Appointment of Subcustodians
1. Notwithstanding any other provisions of this Agreement, all or any of the
monies or securities of the Funds may be held in Custodian's own custody
or in the custody of one or more other banks or trust companies acting as
subcustodians as may be selected by Custodian. Any such subcustodian
selected by the Custodian must have the qualifications required for a
custodian under the 1940 Act, as amended. Custodian shall be responsible
to the applicable Fund for any loss, damage or expense suffered or incurred
by the Fund resulting from the actions or omissions of any subcustodians
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selected and appointed by Custodian (except
subcustodians appointed at the request of the Fund
and as provided in Subsection 2 below) to the same
extent Custodian would be responsible to the Fund
under Section 5. of this Agreement if it committed
the act or omission itself. Upon request of any Fund,
Custodian shall be willing to contract with other
subcustodians reasonably acceptable to the Custodian
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, or (ii) providing depository and
clearing agency services with respect to certain
variable rate demand note securities, or (iii) for
other reasonable purposes specified by such Fund;
provided, however, that the Custodian shall be
responsible to the Fund for any loss, damage or
expense suffered or incurred by the Fund resulting
from the actions or omissions of any such
subcustodian only to the same extent such
subcustodian is responsible to the Custodian. The
Fund shall be entitled to review the Custodian's
contracts with any such subcustodians appointed at
its request. Custodian shall be responsible to the
applicable Fund for any loss, damage or expense
suffered or incurred by the Fund resulting from the
actions or omissions of any Depository only to the
same extent such Depository is responsible to
Custodian.
2. Notwithstanding any other provisions of this Agreement, each Fund's foreign
securities (as defined in Rule 17f-5(c)(1) under the 0000 Xxx) and each Fund's
cash or cash equivalents, in amounts deemed by the Fund to be reasonably
necessary to effect Fund's foreign securities transactions, may be held in the
custody of one or more banks or trust companies acting as subcustodians, and
thereafter, pursuant to a written contract or contracts as approved by such
Fund's Board of Directors, may be transferred to accounts maintained by any such
subcustodian with eligible foreign custodians, as defined in Rule 17f-5(c)(2).
Custodian shall be responsible to the Fund for any loss, damage or expense
suffered or incurred by the
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Fund resulting from the actions or omissions of any
foreign subcustodian only to the same extent the
foreign subcustodian is liable to the domestic
subcustodian with which the Custodian contracts for
foreign subcustody purposes.
T. Accounts and Records
Custodian will prepare and maintain, with the direction and as
interpreted by each Fund, its accountants and/or other
advisors, in complete, accurate and current form all accounts
and records (i) required to be maintained by such Fund with
respect to portfolio transactions under Rule 31a of the 1940
Act, (ii) required to be maintained as a basis for calculation
of such Fund's net asset value, and (iii) as otherwise agreed
upon between the parties. Custodian will preserve said records
in the manner and for the periods prescribed in the 1940 Act
or for such longer period as is agreed upon by the parties.
Custodian relies upon each Fund to furnish, in writing or its
electronic or digital equivalent, accurate and timely
information needed by Custodian to complete such Fund's
records and perform daily calculation of such Fund's net asset
value. Custodian shall incur no liability and each Fund shall
indemnify and hold harmless Custodian from and against any
liability arising from any failure of such Fund to furnish
such information in a timely and accurate manner, even if such
Fund subsequently provides accurate but untimely information.
It shall be the responsibility of each Fund to furnish
Custodian with the declaration, record and payment dates and
amounts of any dividends or income and any other special
actions required concerning each of its securities when such
information is not readily available from generally accepted
securities industry services or publications.
U. Accounts and Records Property of the Funds
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the
property of the applicable Fund, and will be made available to
such Fund for inspection or reproduction within a reasonable
period of time, upon demand. Custodian will assist any Fund's
16
independent auditors, or upon approval of the Fund, or upon
demand, any regulatory body, in any requested review of the
Fund's accounts and records but shall be reimbursed by the
Fund for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon
receipt from any Fund of the necessary information or
instructions, Custodian will supply information from the books
and records it maintains for such Fund that the Fund needs for
tax returns, questionnaires, periodic reports to shareholders
and such other reports and information requests as such Fund
and Custodian shall agree upon from time to time.
V. Adoption of Procedures
Custodian and each Fund may from time to time adopt procedures
as they agree upon, and Custodian may conclusively assume that
no procedure approved or directed by a Fund or its accountants
or other advisors conflicts with or violates any requirements
of its prospectus, articles of incorporation, bylaws, any
applicable law, rule or regulation, or any order, decree or
agreement by which such Fund may be bound. Each Fund will be
responsible to notify Custodian of any changes in statutes,
regulations, rules, requirements or policies which might
necessitate changes in Custodian's responsibilities or
procedures.
W. Calculation of Net Asset Value
Custodian will calculate each Fund's net asset value, in
accordance with such Fund's prospectus. Custodian will price
the securities and foreign currency holdings of each Fund for
which market quotations are available by the use of outside
services designated by such Fund which are normally used and
contracted with for this purpose; all other securities and
foreign currency holdings will be priced in accordance with
such Fund's instructions. Custodian will have no
responsibility for the accuracy of the prices quoted by these
outside services or for the information supplied by any Fund
or for acting upon such instructions.
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X. Advances
In the event Custodian or any subcustodian shall, in its sole
discretion, advance cash or securities for any purpose
(including but not limited to securities settlements, purchase
or sale of foreign exchange or foreign exchange contracts and
assumed settlement) for the benefit of any Fund or Portfolio
thereof, the advance shall be payable by the applicable Fund
or Portfolio on demand. Any such cash advance shall be subject
to an overdraft charge at the rate set forth in the
then-current fee schedule from the date advanced until the
date repaid. As security for each such advance, each Fund
hereby grants Custodian and such subcustodian a lien on and
security interest in all property at any time held for the
account of the Fund or applicable Portfolio, including without
limitation all assets acquired with the amount advanced.
Should the Fund fail to promptly repay the advance, the
Custodian and such subcustodian shall be entitled to utilize
available cash and to dispose of such Fund's or Portfolio's
assets pursuant to applicable law to the extent necessary to
obtain reimbursement of the amount advanced and any related
overdraft charges.
Y. Exercise of Rights; Tender Offers
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, 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.
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written
(including telecopied or telexed) or oral instructions which
Custodian reasonably believes were given by a designated
representative of any Fund. Each Fund shall deliver to
Custodian, prior to delivery of any assets to Custodian and
thereafter from time to time as changes
18
therein are necessary, written instructions naming one or more
designated representatives to give instructions in the name
and on behalf of such Fund, which instructions may be received
and accepted by Custodian as conclusive evidence of the
authority of any designated representative to act for such
Fund and may be considered to be in full force and effect (and
Custodian will be fully protected in acting in reliance
thereon) until receipt by Custodian of notice to the contrary.
Unless such written instructions delegating authority to any
person to give instructions specifically limit such authority
to specific matters or require that the approval of anyone
else will first have been obtained, Custodian will be under no
obligation to inquire into the right of such person, acting
alone, to give any instructions whatsoever which Custodian may
receive from such person. If any Fund fails to provide
Custodian any such instructions naming designated
representatives, any instructions received by Custodian from a
person reasonably believed to be an appropriate representative
of such Fund shall constitute valid and proper instructions
hereunder. "Designated representatives" of a Fund may include
its employees and agents, including investment managers and
their employees.
B. No later than the next business day immediately following each
oral instruction, the applicable Fund will send Custodian
written confirmation of such oral instruction. At Custodian's
sole discretion, Custodian may record on tape, or otherwise,
any oral instruction whether given in person or via telephone,
each such recording identifying the date and the time of the
beginning and ending of such oral instruction.
C. If Custodian shall provide any Fund any direct access to any
computerized recordkeeping and reporting system used hereunder
or if Custodian and any Fund shall agree to utilize any
electronic system of communication, such Fund shall be fully
responsible for any and all consequences of the use or misuse
of the terminal device, passwords, access instructions and
other means of access to such system(s) which are utilized by,
assigned to or otherwise made available to the Fund. Each Fund
agrees to implement and enforce appropriate security policies
and procedures
19
to prevent unauthorized or improper access to or use of such
system(s). Custodian shall be fully protected in acting
hereunder upon any instructions, communications, data or other
information received by Custodian by such means as fully and
to the same effect as if delivered to Custodian by written
instrument signed by the requisite authorized
representative(s) of the applicable Fund. Each Fund shall
indemnify and hold Custodian harmless from and against any and
all losses, damages, costs, charges, counsel fees, payments,
expenses and liability which may be suffered or incurred by
Custodian as a result of the use or misuse, whether authorized
or unauthorized, of any such system(s) by such Fund or by any
person who acquires access to such system(s) through the
terminal device, passwords, access instructions or other means
of access to such system(s) which are utilized by, assigned to
or otherwise made available to the Fund, except to the extent
attributable to any negligence or willful misconduct by
Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall at all times use reasonable care and due diligence and act in
good faith in performing its duties under this Agreement. Custodian shall not be
responsible for, and the applicable Fund shall indemnify and hold Custodian
harmless from and against, any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability which may be asserted against Custodian,
incurred by Custodian or for which Custodian may be held to be liable, arising
out of or attributable to:
1. All actions taken by Custodian pursuant to this Agreement or any
instructions provided to it hereunder, provided that Custodian has acted in
good faith and with due diligence and reasonable care; and
2. The Fund's refusal or failure to comply with the
terms of this Agreement (including without limitation
the Fund's failure to pay or reimburse Custodian
under this indemnification provision), the Fund's
negligence or willful misconduct, or the failure of
any representation or warranty of the
20
Fund hereunder to be and remain true and correct in
all respects at all times.
B. Custodian may request and obtain at the expense of the
applicable Fund the advice and opinion of counsel for such
Fund or of its own counsel with respect to questions or
matters of law, and it shall be without liability to such Fund
for any action taken or omitted by it in good faith, in
conformity with such advice or opinion. If Custodian
reasonably believes that it could not prudently act according
to the instructions of any Fund or the Fund's accountants or
counsel, it may in its discretion, with notice to the Fund,
not act according to such instructions.
C. Custodian may rely upon the advice and statements of any Fund,
its accountants and officers or other authorized individuals,
and other persons believed by it in good faith to be expert in
matters upon which they are consulted, and Custodian shall not
be liable for any actions taken, in good faith, upon such
advice and statements.
D. If any Fund requests Custodian in any capacity to take any
action which involves the payment of money by Custodian, or
which might make it or its nominee liable for payment of
monies or in any other way, Custodian shall be indemnified and
held harmless by such Fund against any liability on account of
such action; provided, however, that nothing herein shall
obligate Custodian to take any such action except in its sole
discretion.
E. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been properly
executed. Custodian shall be entitled to receive upon request as conclusive
proof of any fact or matter required to be ascertained from any Fund
hereunder a certificate signed by an officer or designated representative
of the Fund. Each Fund shall also provide Custodian instructions with
respect to any matter concerning this Agreement requested by Custodian.
21
F. Custodian shall be under no duty or obligation to inquire into, and shall not
be liable for:
1. The validity of the issue of any securities purchased by or for any Fund, the
legality of the purchase of any securities or foreign currency positions or
evidence of ownership required by any Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;
2. The legality of the sale of any securities or foreign currency positions by
or for any Fund, or the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Fund Shares, or the sufficiency of
the amount to be received therefor;
4. The legality of the repurchase or redemption of any Fund Shares, or the
propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by any Fund, or the legality
of the issue of any Fund Shares in payment of any stock dividend.
G. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft, wire
transfer, clearinghouse funds, uncollected funds, or
instrument for the payment of money to be received by it on
behalf of the applicable Fund until Custodian actually
receives such money; provided, however, that it shall advise
such Fund promptly if it fails to receive any such money in
the ordinary course of business and shall cooperate with the
Fund toward the end that such money shall be received.
H. Except as provided in Section 3.S., Custodian shall not be
responsible for loss occasioned by the acts, neglects,
defaults or insolvency of any broker, bank, trust company, or
any other person with whom Custodian may deal.
I. Custodian shall not be responsible or liable for the failure
or delay in performance of its obligations under this
Agreement, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly,
by circumstances beyond the affected entity's reasonable
control, including, without limitation: any interruption, loss
or malfunction of any utility, transportation, or
22
communication service or computer (hardware or software)
services of third parties unrelated to Custodian; inability to
obtain labor, material, equipment or transportation, or a
delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike,
riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornados,
acts of God or public enemy, revolutions, or insurrection.
J. EXCEPT FOR VIOLATIONS OF SECTION 9, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE
TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY,
FOR CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR
FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF
ADVISED OF THIS POSSIBILITY THEREOF.
6. COMPENSATION. In consideration for its services hereunder as Custodian and
------------
investment accounting and recordkeeping agent, each Fund will pay to Custodian
such compensation as shall be set forth in a separate fee schedule to be agreed
to by the Funds and Custodian from time to time. A copy of the initial fee
schedule is attached hereto and incorporated herein by reference. Custodian
shall also be entitled to receive, and each Fund agrees to pay to Custodian, on
demand, reimbursement for Custodian's cash disbursements and reasonable
out-of-pocket costs and expenses, including attorney's fees, incurred by
Custodian in connection with the performance of services hereunder. Custodian
may charge such compensation against monies held by it for the account of the
applicable Fund. Custodian will also be entitled to charge against any monies
held by it for the account of the applicable Fund the amount of any loss,
damage, liability, advance, overdraft or expense for which it shall be entitled
to reimbursement from such Fund, including but not limited to fees and expenses
due to Custodian for other services provided to the Fund by Custodian. Custodian
will be entitled to reimbursement by the Fund for the losses, damages,
liabilities, advances, overdrafts and expenses of subcustodians only to the
extent that (i) Custodian would have been entitled to reimbursement hereunder if
it
23
had incurred the same itself directly, and (ii) Custodian is obligated
to reimburse the subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement shall be for a
period --------------------
of one year. Thereafter, each Fund and Custodian may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other and
received not less than ninety (90) days prior to the date upon which such
termination will take effect. Upon termination of this Agreement, each
applicable Fund will pay Custodian its fees and compensation due hereunder and
its reimbursable disbursements, costs and expenses paid or incurred to such date
and each applicable Fund shall designate a successor custodian by notice in
writing to Custodian by the termination date. In the event no written order
designating a successor custodian has been delivered to Custodian on or before
the date when such termination becomes effective, then Custodian may, at its
option, deliver the securities, funds and properties of the Fund to a bank or
trust company at the selection of Custodian, and meeting the qualifications for
custodian set forth in the 1940 Act and having not less that Two Million Dollars
($2,000,000) aggregate capital, surplus and undivided profits, as shown by its
last published report, or apply to a court of competent jurisdiction for the
appointment of a successor custodian or other proper relief, or take any other
lawful action under the circumstances; provided, however, that the applicable
Fund shall reimburse Custodian for its costs and expenses, including reasonable
attorney's fees, incurred in connection therewith. Custodian will, upon
termination of this Agreement and payment of all sums due to Custodian from each
applicable Fund hereunder or otherwise, deliver to the successor custodian so
specified or appointed, or as specified by the court, at Custodian's office, all
securities then held by Custodian hereunder, duly endorsed and in form for
transfer, and all funds and other properties of each applicable Fund deposited
with or held by Custodian hereunder, and Custodian will co-operate in effecting
changes in book-entries at all Depositories. Upon delivery to a successor
custodian or as specified by the court, Custodian will have no further
obligations or liabilities under this Agreement. Thereafter such successor will
be the successor custodian under this Agreement and will be entitled to
reasonable compensation for its services. In the event that securities, funds
24
and other properties remain in the possession of the Custodian after
the date of termination hereof owing to failure of any Fund to appoint
a successor custodian, the Custodian shall be entitled to compensation
as provided in the then-current fee schedule hereunder for its services
during such period as the Custodian retains possession of such
securities, funds and other properties, and the provisions of this
Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed
to any Fund at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other
address as the Funds may have designated to Custodian in writing, will
be deemed to have been properly given to such Fund hereunder; and
notices, requests, instructions and other writings addressed to
Custodian at its offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: Custody Department, or to such other address as it
may have designated to the Funds in writing, will be deemed to have
been properly given to Custodian hereunder.
9. CONFIDENTIALITY.
A. Each Fund shall preserve the confidentiality of the computerized investment
portfolio and custody recordkeeping and accounting systems used by Custodian
(the "Systems") and the tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other materials relevant to, the
Systems and the business of Custodian ("Confidential Information"). Each Fund
agrees that it will not voluntarily disclose any such Confidential Information
to any other person other than its own employees who reasonably have a need to
know such information pursuant to this Agreement. Each Fund shall return all
such Confidential Information to Custodian upon termination or expiration of
this Agreement.
B. Each Fund has been informed that the Systems are licensed for use by
Custodian from third parties ("Licensors"), and each Fund acknowledges that
Custodian and the Licensors have proprietary rights in and to the Systems and
all other Custodian or Licensor programs, code, techniques, know-how, data
bases, supporting documentation, data formats, and procedures, including without
limitation any
25
changes or modifications made at the request or expense or
both of any Fund (collectively, the "Protected Information").
Each Fund acknowledges that the Protected Information
constitutes confidential material and trade secrets of
Custodian and the Licensors. Each Fund shall preserve the
confidentiality of the Protected Information, and each Fund
hereby acknowledges that any unauthorized use, misuse,
disclosure or taking of Protected Information, residing or
existing internal or external to a computer, computer system,
or computer network, or the knowing and unauthorized accessing
or causing to be accessed of any computer, computer system, or
computer network, may be subject to civil liabilities and
criminal penalties under applicable law. Each Fund shall so
inform employees and agents who have access to the Protected
Information or to any computer equipment capable of accessing
the same. The Licensors are intended to be and shall be third
party beneficiaries of the Funds' obligations and undertakings
contained in this paragraph.
10. MULTIPLE FUNDS AND PORTFOLIOS.
A. Each Fund, and as to any Fund which is comprised of more than one Portfolio,
each Portfolio, shall be regarded for all purposes hereunder as a separate party
apart from each other. Unless the context otherwise requires, with respect to
every transaction covered by this Agreement, every reference herein to a Fund
shall be deemed to relate solely to the particular Fund, and, if applicable,
Portfolio thereof to which such transaction relates. Under no circumstances
shall the rights, obligations or remedies with respect to a particular Fund or
Portfolio constitute a right, obligation or remedy applicable to any other. The
use of this single document to memorialize the separate agreement of each Fund
is understood to be for clerical convenience only and shall not constitute any
basis for joining the Funds for any reason.
B. Additional Funds and Portfolios may be added to this Agreement, provided that
Custodian consents to such addition. Rates or charges for each additional Fund
or Portfolio shall be as agreed upon by Custodian and the applicable Fund in
writing.
26
Additional Funds may be added hereto by execution of
instruments amending Exhibit A to add such Funds thereto.
11. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
Missouri, without reference to the choice of laws principles thereof.
B. All terms and provisions of this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
C. The representations and warranties, the indemnifications extended hereunder,
and the provisions of Section 9. hereof are intended to and shall continue after
and survive the expiration, termination or cancellation of this Agreement.
D. No provisions of the Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by each party
hereto.
E. The failure of any party to insist upon the performance of any terms or
conditions of this Agreement or to enforce any rights resulting from any breach
of any of the terms or conditions of this Agreement, including the payment of
damages, shall not be construed as a continuing or permanent waiver of any such
terms, conditions, rights or privileges, but the same shall continue and remain
in full force and effect as if no such forbearance or waiver had occurred. No
waiver, release or discharge of any party's rights hereunder shall be effective
unless contained in a written instrument signed by the party sought to be
charged.
F. The captions in the Agreement are included for convenience of reference only,
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
G. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
27
H. If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall not be affected
thereby, and every provision of this Agreement shall remain in full force and
effect and shall remain enforceable to the fullest extent permitted by
applicable law.
I. This Agreement may not be assigned by any Fund or Custodian without the prior
written consent of the other.
J. Neither the execution nor performance of this Agreement shall be deemed to
create a partnership or joint venture by and between Custodian and any Fund or
Funds.
K. Except as specifically provided herein, this Agreement does not in any way
affect any other agreements entered into among the parties hereto and any
actions taken or omitted by either party hereunder shall not affect any rights
or obligations of the other party hereunder. IN WITNESS WHEREOF, the parties
have caused this Agreement to be executed by their respective duly authorized
officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
Title:
EACH REGISTERED INVESTMENT
COMPANY LISTED ON EXHIBIT A HERETO
By:
Title:
28
EXHIBIT A
LIST OF FUNDS
Bull & Bear Funds I, Inc.:
Bull & Bear U.S. and Overseas Fund
Bull & Bear Funds II, Inc.:
Bull & Bear Dollar Reserves
Bull & Bear Global Income Fund, Inc.
Bull & Bear U.S. Government Securities Fund, Inc.
Bull & Bear Special Equities Fund, Inc.
Bull & Bear Gold Investors Ltd.
Bull & Bear Municipal Income Fund, Inc.
Midas Fund, Inc.
Rockwood Fund, Inc.
29
EXHIBIT B
INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE
TRANSACTION DTC PHYSICAL FED
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
---- ----------- ---------- ----------- ---------- ----------- ----------
=================== =============== ============= =================== ============= =============== ==========================
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Int. Paydate C Paydate C N/A
Floating Rate Int. N/A As Rate Received C N/A
(No Rate)
Mtg. Backed P&I Paydate C Paydate + 1 Bus. C Paydate F
Day
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
=================== =============== ============= =================== ============= =============== ==========================
Legend
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
30
