CUSTODY AGREEMENT
THIS AGREEMENT made the -------- day of -----------, 19--, 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 000 Xxxx 00xx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and XXXXXXXX FRONTIER FUND,
INC. a Maryland corporation, having its principal office and place of business
at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company
as Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); 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. Fund hereby constitutes and appoints
Custodian as custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at
any time owned by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and
recordkeeping functions required of a duly registered
investment company in compliance with applicable
provisions of federal, state, and local laws, rules and
regulations including, as may be required:
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1. Providing information necessary for Fund and
each Portfolio to file required financial
reports; maintaining and preserving required
books, accounts and records as the basis for
such reports; and performing
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certain daily functions in connection with
such accounts and records, and
2. Calculating daily net asset value of each
Portfolio of the Fund, and
3. Acting as liaison with independent auditors.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver
to Custodian prior to the effective date of this Agreement, copies
of the following documents and all amendments or supplements
thereto, properly certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing
Custodian as custodian hereunder and approving the form
of this Agreement; and
B. Resolutions of the Board of Directors of Fund
designating certain persons to give instructions on
behalf of Fund to Custodian and authorizing Custodian to
rely upon such instructions.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. DELIVERY OF ASSETS
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 (except as permitted by the
Investment Company Act of 1940) 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. All
securities so delivered to Custodian (other than bearer
securities) shall be registered in the name of Fund or
its nominee, or of a nominee of Custodian, or shall be
properly endorsed and in form for transfer satisfactory
to Custodian.
B. DELIVERY OF ACCOUNTS AND RECORDS
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Fund shall turn over to Custodian all of the Fund's
relevant accounts and records previously maintained by
it. Custodian shall be entitled to rely conclusively on
the completeness and correctness of the accounts and
records turned over to it by Fund, and Fund shall
indemnify and hold Custodian 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 accounts and
records or in the failure of Fund to provide any portion
of such or to provide any information needed by the
Custodian knowledgeably to perform its function
hereunder.
C. DELIVERY OF ASSETS TO THIRD PARTIES
Custodian will receive delivery of and keep safely the
assets of Fund delivered to it from time to time and 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 Portfolio of the Fund. The Custodian is
responsible for the safekeeping of the securities and
monies of Fund 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 United Missouri Bank of Kansas
City, N.A. (UMBKC), United Missouri Trust Company of New
York (UMBTC), First National Bank of Chicago (FNBC) for
which Custodian remains responsible. Custodian shall
also be responsible for the monies and securities of
Fund(s) held by
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eligible foreign subcustodians to the extent the
domestic custodian with which the Custodian contracts is
responsible to Custodian. Custodian may participate
directly or indirectly through a subcustodian in the
Depository Trust Company, Treasury/Federal Reserve Book
Entry System, Participant Trust Company or other
depository approved by the Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)).
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D. REGISTRATION OF SECURITIES
Custodian will hold stocks and other registerable
portfolio securities of Fund registered in the name of
Fund or its nominee or in the name of any nominee of
Custodian for whose fidelity and liability Custodian
will be fully responsible, or in street certificate
form, so-called, with or without any indication of
fiduciary capacity. Unless otherwise instructed,
Custodian will register all such portfolio securities in
the name of its authorized nominee, as defined in the
Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder or in any
provision of any subsequent Federal tax law exempting
such transaction from liability for stock transfer
taxes. All securities, and the ownership thereof by a
Portfolio of the Fund, which are held by Custodian
hereunder, however, shall at all times be identifiable
on the records of the Custodian. The Fund agrees to hold
Custodian and its nominee harmless for any liability as
a record holder of 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 the applicable Portfolio of the 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 bonds or other securities held by
it at maturity
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or when advised of an earlier mandatory call for
redemption, except that Custodian shall receive
instructions prior to surrendering any convertible
security. Pursuant to this paragraph, the Custodian will
inform the Fund of such corporate actions and capital
changes when it is informed of them through the
publications it subscribes to.
F. PURCHASES OF INVESTMENTS OF THE FUND
Fund will, on each business day on which a purchase of
securities shall be made by it, deliver to Custodian
instructions which shall specify with respect to each
such purchase:
1. The name of the Portfolio making such
purchase;
2. The name of the issuer and description of
the security;
3. The number of shares or 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;
and
8. The name of the person from whom or the
broker or dealer through whom the purchase
was made.
In accordance with such instructions, Custodian will pay
for out of monies held for the account of such named
Portfolio, but only insofar as monies are available
therein for such purpose, and receive the portfolio
securities so purchased by such named Portfolio, 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. Such payment will be made
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only upon receipt by Custodian of the securities so
purchased in form for transfer satisfactory to
Custodian. Custodian agrees to promptly inform Fund of
any failures by sellers to make proper deliveries of
securities purchased by the Fund.
G. SALES AND DELIVERIES OF INVESTMENTS OF THE FUND - OTHER
THAN OPTIONS AND FUTURES
Fund will, on each business day on which a sale of
investment securities of Fund has been made, deliver to
Custodian instructions specifying with respect to each
such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of
the securities;
3. The number of shares or 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;
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 such Portfolio to
the broker or other person specified in the instructions
relating to such sale, such delivery to be made only
upon receipt of payment therefor in such form as is
satisfactory to Custodian, with the understanding that
Custodian may deliver or cause to be delivered
securities for payment in accordance with the
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customs prevailing among dealers in securities.
Custodian agrees to promptly inform Fund of any failures
of purchasers to make proper payment for securities sold
by Fund.
H. PURCHASES OR SALES OF SECURITY OPTIONS, OPTIONS ON
INDICES AND SECURITY INDEX FUTURES CONTRACTS
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. 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;
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;
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;
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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;
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;
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. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
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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 Portfolio of the Fund:
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
a Portfolio of the 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 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 Fund will retain the
right to any dividends, interest or
distribution on such loaned securities. Upon
receipt of instructions and the
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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 Fund
except as may be otherwise provided in this Agreement or
directed from time to time by the Board of Directors of
Fund.
K. DEPOSIT ACCOUNT
Custodian will open and maintain a special purpose
deposit account(s) in the name of Custodian on behalf of
each Portfolio (Accounts), subject only to draft or
order by Custodian upon receipt of instructions. All
monies received by Custodian from or for the account of
a Portfolio shall be deposited in said 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
Fund's Account, Custodian agrees to make Fed Funds
available to the appropriate Portfolio of the Fund in
the amount of the check. Deposits made by Federal
Reserve wire will be available to the Fund immediately
and ACH wires will be available to the Fund on the next
business day. Income earned on the portfolio securities
will be credited to the applicable Portfolio of the Fund
based on the schedule attached as Exhibit A, except that
income earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, Bank of New York
(previously Irving Trust
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Company and hereinafter referred to as BONY) and Xxxxxx
Guaranty and Trust Company (MGT) will be credited when
received. 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 applicable
Portfolio in that amount. Custodian may open and
maintain an Account in such other banks or trust
companies as may be designated by it and by properly
authorized resolution of the Board of Directors of Fund,
such Account, however, to be in the name of Custodian on
behalf of the applicable portfolio of the Fund and
subject only to its draft or order.
L. INCOME AND OTHER PAYMENTS TO FUND
Custodian will:
1. Collect, claim and receive and deposit for
the Account of each Portfolio of the 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 the applicable
Portfolio of the Fund in accordance with the
schedule attached hereto as Exhibit A,
except that income earned on portfolio
securities held by domestic subcustodians
other than UMBKC, UMBTC, BONY, and MGT will
be credited when received. Income from
foreign securities and assets held by
eligible foreign subcustodians shall be
credited by Custodian upon receipt of income
from the domestic subcustodian contracting
with the foreign eligible subcustodians. If,
for any reason, the Fund is credited with
income that is not subsequently collected,
Custodian may reverse that credited amount;
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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
2. 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 notice of which is contained
in publications of the type to
which a custodian for investment
companies normally subscribes
for such purpose; and
b. the endorsement for collection, in the
name of the applicable Portfolio of
the 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. Unless prior instructions
have been received to the contrary, Custodian will,
without further instructions, sell any rights held for
the account of
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Fund on the last trade date prior to the date of
expiration of such rights.
M. PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS
On the declaration of any dividend or other distribution
on the shares of Capital Stock of any Portfolio
("Portfolio Shares") by the Board of Directors of Fund,
Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of
said Board of Directors certified by the Secretary or an
Assistant Secretary of Fund wherein there shall be set
forth the record date as of which shareholders entitled
to receive such dividend or other distribution shall be
determined, the date of payment of such dividend or
distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date
and the reinvestment date of any dividend are the same,
in which case funds shall remain in the Custody Account,
on the date specified in such Resolution for the payment
of such dividend or other distribution, Custodian will
pay out of the monies held for the account of the
applicable Portfolio of the Fund, insofar as the same
shall be available for such purposes, and wire to the
account of the Dividend Disbursing Agent for Fund, such
amount as may be necessary to pay the amount per share
payable in cash on Portfolio Shares issued and
outstanding on the record date established by such
Resolution.
N. SHARES OF FUND PURCHASED BY FUND
Whenever any Portfolio Shares are repurchased or
redeemed by Fund, 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 Portfolio and
either deposit the same in the account maintained for
the purpose of paying
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for the repurchase or redemption of Portfolio 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 accounts or that the
proper number of such shares have been canceled and
removed from the shareholder records.
O. SHARES OF FUND PURCHASED FROM FUND
Whenever Portfolio Shares are purchased from Fund, 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
Portfolio Shares purchased from 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 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 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
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Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and
other obligations of Fund (including but not limited to
obligations in connection with the conversion, exchange
or surrender of securities owned by 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 Fund)
pursuant to instructions of Fund setting forth the name
of the 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 Fund
as of the close of business on each day, a detailed
statement of the amounts received or paid and of
securities received or delivered for the account of Fund
during said day. Custodian will, from time to time, upon
request by Fund, render a detailed statement of the
securities and monies held for Fund under this
Agreement, and Custodian will maintain such books and
records as are necessary to enable it to do so and will
permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such
records or confirmation of the contents of such records;
and if demanded, will permit federal and state
regulatory agencies to examine the securities, books and
records. Upon the written instructions of Fund or as
demanded by federal or state regulatory agencies,
Custodian will instruct any subcustodian to give such
persons as are authorized by Fund including Fund's
independent public accountants, access to such records
or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory
agencies to examine the books, records and securities
held by subcustodian
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which relate to Fund. Fund will be entitled to receive
reports produced by the Custodian's portfolio accounting
system, including without limitation, those listed on
Exhibit C hereof.
S. APPOINTMENT OF SUBCUSTODIANS
1. Notwithstanding any other provisions of this
Agreement, all of or any of the monies or
securities of Fund may be held in
Custodian's own custody or in the custody of
one or more other banks or trust companies
selected by Custodian and approved by the
Fund's Board of Directors. Any such
subcustodian must have the qualifications
required for custodian under the Investment
Company Act of 1940, as amended. The
subcustodian may participate directly or
indirectly in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System,
Participant Trust Company or other
depository approved by the Fund (as such
entities are defined at 17 CFR Sec.
270.17f-4(b)). The appointment of UMBKC or
any other subcustodian, depository or
clearing agency used by the Custodian and
approved by the Fund will not relieve
Custodian of any of its obligations
hereunder except as provided in Section 3.C
hereof. The Custodian will comply with
Section 17f-4 of the Investment Company Act
of 1940, as amended, as to depositories and
clearing agencies used by Custodian and
approved the Fund. The Custodian will not be
entitled to reimbursement by Fund for any
fees or expenses of any subcustodian,
depository or clearing agency.
2. Notwithstanding any other provisions of this
Agreement, Fund's foreign securities (as
defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's
cash or cash equivalents, in amounts
reasonably necessary to effect Fund's
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foreign securities transactions, may be held
in the custody of one or more banks or trust
companies acting as subcustodians, according
to Section 3.S.1; and thereafter, pursuant
to a written contract or contracts as
approved by Fund's Board of Directors, may
be transferred to an account maintained by
such subcustodian with an eligible foreign
custodian, as defined in Rule 17f-5(c)(2),
provided that any such arrangement involving
a foreign custodian shall be in accordance
with the provisions of Rule 17f-5 under the
Investment Company Act of 1940 as that Rule
may be amended from time to time.
T. ACCOUNTS AND RECORDS
Custodian, with the direction and as interpreted by the
Fund, Fund's accountants and/or other tax advisors, will
prepare and maintain as complete, accurate and current
all accounts and records required to be maintained by
Fund under the Internal Revenue Code of 1986 ("Code") as
amended and under the general Rules and Regulations
under the Investment Company Act of 1940 ("Rules") as
amended, and as agreed upon between the parties and will
preserve said records in the manner and for the periods
prescribed in said Code and Rules, or for such longer
period as is agreed upon by the parties. Custodian
relies upon Fund to furnish, in writing, accurate and
timely information to complete Fund's records and
perform daily calculation of the Fund's net asset value,
as provided in Section 3.W. below. Custodian shall incur
no liability and Fund shall indemnify and hold harmless
Custodian from and against any liability arising from
any failure of Fund to furnish such information in a
timely and accurate manner, even if Fund subsequently
provides accurate but untimely information. It shall be
the responsibility of Fund to furnish Custodian
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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 FUND
Custodian acknowledges that all of the accounts and
records maintained by Custodian pursuant to this
Agreement are the property of Fund, and will be made
available to Fund for inspection or reproduction within
a reasonable period of time, upon demand. Custodian will
assist Fund's independent auditors, or upon approval of
Fund, or upon demand, any regulatory body having
jurisdiction over the Fund or Custodian, in any
requested review of Fund's accounts and records but
shall be reimbursed for all expenses and employee time
invested in any such review outside of routine and
normal periodic reviews. Upon receipt from Fund of the
necessary information, Custodian will supply necessary
data for Fund's completion of any necessary tax returns,
questionnaires, periodic reports to Shareholders and
such other reports and information requests as Fund and
Custodian shall agree upon from time to time.
V. ADOPTION OF PROCEDURES
Custodian and Fund may from time to time adopt
procedures as they agree upon, and Custodian may
conclusively assume that no procedure approved by Fund,
or directed by Fund, conflicts with or violates any
requirements of its prospectus, "Articles of
Incorporation", Bylaws, or any rule or regulation of any
regulatory body or governmental agency. Fund will be
responsible to notify Custodian of any changes in
statutes, regulations, rules or policies
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which might necessitate changes in Custodian's
responsibilities or procedures.
W. CALCULATION OF NET ASSET VALUE
Custodian will calculate Fund's net asset value, in
accordance with Fund's prospectus, once daily. Custodian
will prepare and maintain a daily evaluation of
securities for which market quotations are available by
the use of outside services normally used and contracted
for this purpose; all other securities will be evaluated
in accordance with 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 Fund or upon instructions.
X. OVERDRAFTS
If Custodian shall in its sole discretion advance funds
to the account of the Fund which results in an overdraft
because the monies held by Custodian on behalf of the
Fund are insufficient to pay the total amount payable
upon a purchase of securities as specified in Fund's
instructions or for some other reason, the amount of the
overdraft shall be payable by the Fund to Custodian upon
demand and shall bear an interest rate determined by
Custodian from the date advanced until the date of
payment. Custodian shall have a lien on the assets of
the Fund in the amount of any outstanding overdraft.
21
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written
or facsimile instructions or advice to Custodian from
two designated representatives of Fund. Certified copies
of resolutions of the Board of Directors of Fund naming
two or more designated representatives to give
instructions in the name and on behalf of Fund, may be
received and accepted from time to time by Custodian as
conclusive evidence of the authority of any two
designated representatives to act for 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 the resolution delegating authority to any person
to give instructions specifically requires that the
approval of anyone else will first have been obtained,
Custodian will be under no obligation to inquire into
the right of the person giving such instructions to do
so. Notwithstanding any of the foregoing provisions of
this Section 4. no authorizations or instructions
received by Custodian from Fund, will be deemed to
authorize or permit any director, trustee, officer,
employee, or agent of Fund to withdraw any of the
securities or similar investments of Fund upon the mere
receipt of such authorization or instructions from such
director, trustee, officer, employee or agent.
Notwithstanding any other provision of this Agreement,
Custodian, upon receipt (and acknowledgement if required
at the discretion of Custodian) of the instructions of
any two designated representatives of Fund, will
undertake to deliver for Fund's account monies,
(provided such monies are on hand or available) in
connection with Fund's transactions and to wire transfer
such monies to such broker, dealer, subcustodian, bank
or other agent specified in such instructions.
22
B. If oral instructions are permitted pursuant to Section
4.A. hereunder, no later than the next business day
immediately following such oral instruction the 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 parties, the date and the time
of the beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from
and against any loss or liability arising out of
Custodian's failure to comply with the terms of this
Agreement or arising out of Custodian's negligence or
bad faith. Custodian may request and obtain the advice
and opinion of counsel for Fund, or of its own counsel
with respect to questions or matters of law, and it
shall be without liability to 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 the Fund or the Fund's counsel, it may in its
discretion, with notice to the Fund, not act according
to such instructions.
B. Custodian may rely upon the advice of Fund and upon
statements of Fund's public accountants 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 statements.
C. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the
payment of money by it, or which in Custodian's opinion
might make it or its nominee liable for payment of
monies or in any other way, Custodian, upon notice to
23
Fund given prior to such actions, shall be and be kept
indemnified by Fund in an amount and form satisfactory
to Custodian against any liability on account of such
action.
D. Custodian shall be protected in acting as custodian
hereunder upon any instructions, advice, notice,
request, consent, certificate or other instrument or
paper reasonably 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 Fund hereunder, a certificate signed by
the Fund's President, or other officer specifically
authorized for such purpose.
E. Without limiting the generality of the foregoing,
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 Fund, the legality of
the purchase thereof or evidence of
ownership required by 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
by or for Fund, or the propriety of the
amount for which the same are sold;
3. The legality of the issue or sale of any
shares of the Capital Stock of Fund, 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 Fund, or the legality of the
issue of any Fund Shares in payment of any
stock dividend.
24
F. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft,
wire transfer, clearing house funds, uncollected funds,
or instrument for the payment of money received by it on
behalf of Fund, until Custodian actually receives such
money, provided only that it shall advise Fund promptly
if it fails to receive any such money in the ordinary
course of business, and use its best efforts and
cooperate with Fund toward the end that such money shall
be received.
G. 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 in the absence of negligence, or
bad faith on the part of Custodian, except as provided
in Section 3.S.1 hereof.
H. Notwithstanding anything herein to the contrary,
Custodian may, and with respect to any foreign
subcustodian appointed under Section 3.S.2. must,
provide Fund for its approval, agreements with banks or
trust companies which will act as subcustodians for Fund
pursuant to Section 3.S of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is
stated in the Fee Schedule attached hereto as Exhibit B which may be
changed from time to time as agreed to in writing by Custodian and
Fund. Custodian may charge such compensation against monies held by
it for the account of Fund. Custodian will also be entitled,
notwithstanding the provisions of Sections 5.C. or 5.D. hereof, to
charge against any monies held by it for the account of Fund the
amount of any loss, damage, liability, advance, or expense for which
it shall be entitled to reimbursement under the provisions of this
Agreement including fees or expenses due to Custodian for other
services provided to the Fund by the Custodian.
25
Custodian will not be entitled to reimbursement by Fund for any loss
or expenses of any subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same
by notice in writing, delivered or mailed, postage prepaid, to the
other party hereto and received not less than ninety (90) days prior
to the date upon which such termination will take effect. If the
Custodian terminates this Agreement, the Fund may extend the
effective date of the termination ninety (90) days by written
request to the Custodian thirty (30) days prior to the end of the
initial ninety (90) days notice period unless the Custodian in good
faith could not perform the duties hereunder. Upon termination of
this Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to
such date and Fund will use its best efforts to obtain a successor
custodian. Unless the holders of a majority of the outstanding
shares of "Capital Stock" of Fund vote to have the securities, funds
and other properties held under this Agreement delivered and paid
over to some other person, firm or corporation specified in the
vote, having not less the Two Million Dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last
published report, and meeting such other qualifications for
custodian as set forth in the Bylaws of Fund, the Board of Directors
of Fund will, forthwith upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian a bank
or trust company having such qualifications. Custodian will, upon
termination of this Agreement, deliver to the successor custodian so
specified or appointed, at Custodian's office, all securities then
held by Custodian hereunder, duly endorsed and in form for transfer,
all funds and other properties of Fund deposited with or held by
Custodian hereunder, or will co-operate in effecting changes in
book-entries at the Depository Trust Company or in the
Treasury/Federal Reserve Book-Entry System pursuant to 31 CFR
26
Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor
custodian has been delivered to Custodian on or before the date when
such termination becomes effective, then Custodian will deliver the
securities, funds and properties of Fund to a bank or trust company
at the selection of Custodian and meeting the qualifications for
custodian, if any, set forth in the Bylaws of Fund and having not
less that Two Million Dollars ($2,000,000) aggregate capital,
surplus and undivided profits, as shown by its last published
report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the
successor custodian under this Agreement and will be entitled to
reasonable compensation for its services. In the event that no such
successor custodian can be found, Fund will submit to its
shareholders, before permitting delivery of the cash and securities
owned by Fund to anyone other than a successor custodian, the
question of whether Fund will be liquidated or function without a
custodian. Notwithstanding the foregoing requirement as to delivery
upon termination of this Agreement, Custodian may make any other
delivery of the securities, funds and property of Fund which is
permitted by the Investment Company Act of 1940, Fund's Certificate
of Incorporation and Bylaws then in effect or apply to a court of
competent jurisdiction for the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received
by Fund at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 such
other address as Fund may have designated to Custodian in writing,
will be deemed to have been properly given to Fund hereunder; and
notices, requests, instructions and other writings received by
Custodian at its offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, or to such
27
other address as it may have designated to Fund in writing, will be
deemed to have been properly given to Custodian hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified,
in any manner except by a written agreement properly
authorized and executed by both parties hereto.
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 become effective at the close of
business on the day of ------, 19--.
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. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
H. Custodian will not release the identity of Fund to an issuer
which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of
direct
28
communications between such issuer and Fund unless the Fund
directs the Custodian otherwise.
I. This Agreement may not be assigned by either party without
prior written consent of the other party.
J. If any provision of the Agreement, either in its present
form or as amended from time to time, limits, qualifies, or
conflicts with the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, such statutes,
rules and regulations shall be deemed to control and
supersede such provision without nullifying or terminating
the remainder of the provisions of this Agreement.
29
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
-----------------------------
Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
ATTEST:
-----------------
Xxxxxx X. Xxxxxxx
Assistant Secretary
XXXXXXXX FRONTIER FUND, INC.
By:
-----------------------------
Title:
--------------------------
ATTEST:
-----------------
Secretary
