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
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 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
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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").
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
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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 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 specified 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 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
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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;
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
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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;
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
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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. 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
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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
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 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,
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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
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
9
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 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
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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 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 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
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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
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
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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 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
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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.
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.
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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
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 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
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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 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
16
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.
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.
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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 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,
18
overdrafts and expenses of subcustodians only to the extent that (i)
Custodian would have been entitled to reimbursement hereunder if it 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 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
19
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 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
20
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. 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.
21
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.
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.
22
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:
23
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.
