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CUSTODY AGREEMENT
DATED JANUARY 1, 1995
BETWEEN
UMB BANK, N.A.
AND
SECURITY MANAGEMENT COMPANY
FAMILY OF FUNDS
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TABLE OF CONTENTS
SECTION PAGE
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1. APPOINTMENT OF CUSTODIAN 1
2. DEFINITIONS 1
(a) Securities 1
(b) Assets 1
(c) Instructions and Special Instructions 1
3. DELIVERY OF CORPORATE DOCUMENTS 2
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN 3
(a) Safekeeping 3
(b) Manner of Holding Securities 4
(c) Free Delivery of Assets 6
(d) Exchange of Securities 6
(e) Purchases of Assets 6
(f) Sales of Assets 7
(g) Options 8
(h) Futures Contracts 8
(i) Segregated Accounts 9
(j) Depository Receipts 9
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 10
(l) Interest Bearing Deposits 10
(m) Foreign Exchange Transactions Other than as Principal 11
(n) Pledges or Loans of Securities 11
(o) Stock Dividends, Rights, Etc. 12
(p) Routine Dealings 12
(q) Collections 12
(r) Bank Accounts 13
(s) Dividends, Distributions and Redemptions 13
(t) Proceeds from Shares Sold 13
(u) Proxies and Notices; Compliance with the Shareholders Communication
Act of 1985 14
(v) Books and Records 14
(w) Opinion of Fund's Independent Certified Public Accountants 14
(x) Reports by Independent Certified Public Accountants 14
(y) Bills and Other Disbursements 15
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5. SUBCUSTODIANS 15
(a) Domestic Subcustodians 15
(b) Foreign Subcustodians 15
(c) Interim Subcustodians 16
(d) Special Subcustodians 17
(e) Termination of a Subcustodian 17
(f) Certification Regarding Foreign Subcustodians 17
6. STANDARD OF CARE 17
(a) General Standard of Care 17
(b) Actions Prohibited by Applicable Law, Events Beyond Custodian's
Control, Armed Conflict, Sovereign Risk, Etc. 18
(c) Liability for Past Records 18
(d) Advice of Counsel 18
(e) Advice of the Fund and Others 19
(f) Instructions Appearing to be Genuine 19
(g) Exceptions from Liability 19
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS 20
(a) Domestic Subcustodians 20
(b) Liability for Acts and Omissions of Foreign Subcustodians 20
(c) Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities Depositories and Clearing Agencies 20
(d) Defaults or Insolvencies of Brokers, Banks, Etc. 20
(e) Reimbursement of Expenses 20
8. INDEMNIFICATION 21
(a) Indemnification by Fund 21
(b) Indemnification by Custodian 21
9. ADVANCES 21
10. LIENS 22
11. COMPENSATION 22
12. POWERS OF ATTORNEY 22
13. TERMINATION AND ASSIGNMENT 23
14. ADDITIONAL FUNDS 23
15. NOTICES 23
16. MISCELLANEOUS 24
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CUSTODY AGREEMENT
This agreement made as of this 1st day of January, 1995, between UMB Bank,
n.a., a national banking association with its principal place of business
located at Kansas City, Missouri (hereinafter "Custodian"), and each of the
Funds which have executed the signature page hereof together with such
additional Funds which shall be made parties to this Agreement by the execution
of a separate signature page hereto (individually, a "Fund" and collectively,
the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as its custodian for the
custody of Assets (as hereinafter defined) owned by such Fund which Assets are
to be held in such accounts as such Fund may establish from time to time; and
WHEREAS, Custodian is willing to accept such appointment on the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto, intending to be legally bound, mutually covenant and agree as
follows:
1. APPOINTMENT OF CUSTODIAN.
Each Fund hereby constitutes and appoints the Custodian as custodian
of Assets belonging to each such Fund which have been or may be from
time to time deposited with the Custodian. Custodian accepts such
appointment as a custodian and agrees to perform the duties and
responsibilities of Custodian as set forth herein on the conditions
set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds, bills,
rights, script, warrants, interim certificates and all
negotiable or nonnegotiable paper commonly known as Securities
and other instruments or obligations.
(b) "Assets" shall mean Securities, monies and other property held
by the Custodian for the benefit of a Fund.
(c)(1) "Instructions", as used herein, shall mean: (i) a tested
telex, a written (including, without limitation, facsimile
transmission) request, direction, instruction or certification
signed or initialed by or on behalf of a Fund by an Authorized
Person; (ii) a telephonic or other oral communication from a
person the Custodian reasonably believes to be an Authorized
Person; or (iii) a communication effected
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directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) on
behalf of a Fund. Instructions in the form of oral
communications shall be confirmed by the appropriate Fund by
tested telex or in writing in the manner set forth in clause
(i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such
oral Instructions prior to the Custodian's receipt of such
confirmation. Each Fund authorizes the Custodian to record any
and all telephonic or other oral Instructions communicated to
the Custodian.
(c)(2) "Special Instructions", as used herein, shall mean
Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of a Fund or any other
person designated by the Treasurer of such Fund in writing,
which countersignature or confirmation shall be included on
the same instrument containing the Instructions or on a
separate instrument relating thereto.
(c)(3) Instructions and Special Instructions shall be delivered to
the Custodian at the address and/or telephone, facsimile
transmission or telex number agreed upon from time to time by
the Custodian and each Fund.
(c)(4) Where appropriate, Instructions and Special Instructions shall
be continuing instructions.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that its execution
does not violate any of the provisions of its respective charter,
articles of incorporation, articles of association or bylaws and all
required corporate action to authorize the execution and delivery of
this Agreement has been taken.
Each Fund has furnished the Custodian with copies, properly certified
or authenticated, with all amendments or supplements thereto, of the
following documents:
(a) Certificate of Incorporation (or equivalent document) of the
Fund as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing
the Custodian and approving the form of this Agreement; and
(d) The Fund's current prospectus and statements of additional
information.
Each Fund shall promptly furnish the Custodian with copies of any
updates, amendments or supplements to the foregoing documents.
In addition, each Fund has delivered or will promptly deliver to the
Custodian, copies of the Resolution(s) of its Board of Directors or
Trustees and all amendments or supplements thereto, properly certified
or authenticated, designating certain officers or employees of
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each such Fund who will have continuing authority to
certify to the Custodian: (a) the names, titles, signatures and
scope of authority of all persons authorized to give
Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of each Fund,
and (b) the names, titles and signatures of those persons
authorized to countersign or confirm Special Instructions on
behalf of each Fund (in both cases collectively, the
"Authorized Persons" and individually, an "Authorized Person").
Such Resolutions and certificates may be accepted and relied
upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and
effect until delivery to the Custodian of a similar Resolution
or certificate to the contrary. Upon delivery of a certificate
which deletes or does not include the name(s) of a person
previously authorized to give Instructions or to countersign or
confirm Special Instructions, such persons shall no longer be
considered an Authorized Person authorized to give Instructions
or to countersign or confirm Special Instructions. Unless the
certificate specifically requires that the approval of anyone
else will first have been obtained, the Custodian will be under
no obligation to inquire into the right of the person giving
such Instructions or Special Instructions to do so.
Notwithstanding any of the foregoing, no Instructions or
Special Instructions received by the Custodian from a Fund will
be deemed to authorize or permit any director, trustee,
officer, employee, or agent of such Fund to withdraw any of the
Assets of such Fund upon the mere receipt of such
authorization, Special Instructions or Instructions from such
director, trustee, officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.
Except for Assets held by any Subcustodian appointed pursuant to
Sections 5(b), (c), or (d) of this Agreement, the Custodian shall have
and perform the powers and duties hereinafter set forth in this
Section 4. For purposes of this Section 4 all references to powers
and duties of the "Custodian" shall also refer to any Domestic
Subcustodian appointed pursuant to Section 5(a).
(a) Safekeeping.
The Custodian will keep safely the Assets of each Fund which
are delivered to it from time to time. The Custodian shall
not be responsible for any property of a Fund held or received
by such Fund and not delivered to the Custodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold Securities of each
Fund either: (i) by physical possession of the share
certificates or other instruments representing such
Securities in registered or bearer form; or (ii) in
book-entry form by a Securities System (as hereinafter
defined) in accordance with the provisions of
sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio Securities
which have been delivered to it in physical form, by
registering the same in the name of the appropriate Fund
or its nominee, or in the name of the Custodian or its
nominee, for whose actions such Fund and Custodian,
respectively, shall be
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fully responsible. Upon the receipt of Instructions,
the Custodian shall hold such Securities in street certificate
form, so called, with or without any indication of fiduciary
capacity. However, unless it receives Instructions to the
contrary, the Custodian will register all such portfolio
Securities in the name of the Custodian's authorized nominee.
All such Securities shall be held in an account of the
Custodian containing only assets of the appropriate Fund or
only assets held by the Custodian as a fiduciary, provided that
the records of the Custodian shall indicate at all times the
Fund or other customer for which such Securities are held in
such accounts and the respective interests therein.
(3) The Custodian may deposit and/or maintain domestic
Securities owned by a Fund in, and each Fund hereby approves
use of: (a) The Depository Trust Company; (b) The Participants
Trust Company; and (c) any book-entry system as provided in (i)
Subpart 0 of Treasury Circular Xx. 000, 00 XXX 306.115, (ii)
Subpart B of Treasury Circular Public Debt Series Xx. 00-00,
00 XXX 350.2, or (iii) the book-entry regulations of federal
agencies substantially in the form of 31 CFR 306.115. Upon the
receipt of Special Instructions, the Custodian may deposit
and/or maintain domestic Securities owned by a Fund in any
other domestic clearing agency registered with the Securities
and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be
authorized by the SEC to serve in the capacity of depository or
clearing agent for the Securities or other assets of investment
companies) which acts as a Securities depository. Each of the
foregoing shall be referred to in this Agreement as a
"Securities System", and all such Securities Systems shall be
listed on the attached Appendix A. Use of a Securities System
shall be in accordance with applicable Federal Reserve Board
and SEC rules and regulations, if any, and subject to the
following provisions:
(i) The Custodian may deposit the Securities directly
or through one or more agents or Subcustodians
which are also qualified to act as custodians for
investment companies.
(ii) The Custodian shall deposit and/or maintain the
Securities in a Securities System, provided that
such Securities are represented in an account
("Account") of the Custodian in the Securities
System that includes only assets held by the
Custodian as a fiduciary, custodian or otherwise
for customers.
(iii) The books and records of the Custodian shall at
all times identify those Securities belonging to
any one or more Funds which are maintained in a
Securities System.
(iv) The Custodian shall pay for Securities purchased
for the account of a Fund only upon (a) receipt
of advice from the Securities System that such
Securities have been transferred to the Account
of the Custodian in accordance with the rules of
the Securities System, and (b) the
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making of an entry on the records of the
Custodian to reflect such payment and transfer for
the account of such Fund. The Custodian shall
transfer Securities sold for the account of a Fund
only upon (a) receipt of advice from the
Securities System that payment for such Securities
has been transferred to the Account of the
Custodian in accordance with the rules of the
Securities System, and (b) the making of an entry
on the records of the Custodian to reflect such
transfer and payment for the account of such
Fund. Copies of all advices from the Securities
System relating to transfers of Securities for the
account of a Fund shall be maintained for such
Fund by the Custodian. The Custodian shall
deliver to a Fund on the next succeeding business
day daily transaction reports which shall include
each day's transactions in the Securities System
for the account of such Fund. Such transaction
reports shall be delivered to such Fund or any
agent designated by such Fund pursuant to
Instructions, by computer or in such other manner
as such Fund and Custodian may agree.
(v) The Custodian shall, if requested by a Fund
pursuant to Instructions, provide such Fund with
reports obtained by the Custodian or any
Subcustodian with respect to a Securities
System's accounting system, internal accounting
control and procedures for safeguarding
Securities deposited in the Securities System.
(vi) Upon receipt of Special Instructions, the
Custodian shall terminate the use of any
Securities System on behalf of a Fund as promptly
as practicable and shall take all actions
reasonably practicable to safeguard the
Securities of such Fund maintained with such
Securities System.
(c) Free Delivery of Assets.
Notwithstanding any other provision of this Agreement and
except as provided in Section 3 hereof, the Custodian, upon
receipt of Special Instructions, will undertake to make free
delivery of Assets, provided such Assets are on hand and
available, in connection with a Fund's transactions and to
transfer such Assets to such broker, dealer, Subcustodian,
bank, agent, Securities System or otherwise as specified in
such Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will exchange
portfolio Securities held by it for a Fund for other
Securities or cash paid in connection with any reorganization,
recapitalization, merger, consolidation, or conversion of
convertible Securities, and will deposit any such Securities
in accordance with the terms of any reorganization or
protective plan.
Without Instructions, the Custodian is authorized to exchange
Securities held by it in temporary form for Securities in
definitive form, to surrender Securities for transfer into a
name or nominee name as permitted in Section 4(b)(2), to
effect an
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exchange of shares in a stock split or when the par
value of the stock is changed, to sell any fractional shares,
and, upon receiving payment therefor, to surrender bonds or
other Securities held by it at maturity or call.
(e) Purchase of Assets.
(1) Securities Purchases. In accordance with Instructions,
the Custodian shall, with respect to a purchase of
Securities, pay for such Securities out of monies held
for a Fund's account for which the purchase was made,
but only insofar as monies are available therein for
such purpose, and receive the portfolio Securities so
purchased. Unless the Custodian has received Special
Instructions to the contrary, such payment will be made
only upon receipt of Securities by the Custodian, a
clearing corporation of a national Securities exchange
of which the Custodian is a member, or a Securities
System in accordance with the provisions of Section
4(b)(3) hereof. Notwithstanding the foregoing, upon
receipt of Instructions: (i) in connection with a
repurchase agreement, the Custodian may release funds to
a Securities System prior to the receipt of advice from
the Securities System that the Securities underlying
such repurchase agreement have been transferred by
book-entry into the Account maintained with such
Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System
require that the Securities System may make payment of
such funds to the other party to the repurchase
agreement only upon transfer by book-entry of the
Securities underlying the repurchase agreement into such
Account; (ii) in the case of Interest Bearing Deposits,
currency deposits, and other deposits, foreign exchange
transactions, futures contracts or options, pursuant to
Sections 4(g), 4(h), 4(1), and 4(m) hereof, the
Custodian may make payment therefor before receipt of an
advice of transaction; and (iii) in the case of
Securities as to which payment for the Security and
receipt of the instrument evidencing the Security are
under generally accepted trade practice or the terms of
the instrument representing the Security expected to
take place in different locations or through separate
parties, such as commercial paper which is indexed to
foreign currency exchange rates, derivatives and similar
Securities, the Custodian may make payment for such
Securities prior to delivery thereof in accordance with
such generally accepted trade practice or the terms of
the instrument representing such Security.
(2) Other Assets Purchased. Upon receipt of Instructions
and except as otherwise provided herein, the Custodian
shall pay for and receive other Assets for the account
of a Fund as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with Instructions, the
Custodian will, with respect to a sale, deliver or cause
to be delivered the Securities thus designated as sold
to the broker or other person specified in the
Instructions relating to such sale. Unless the
Custodian has received Special Instructions
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to the contrary, such delivery shall be made only upon
receipt of payment therefor in the form of: (a) cash,
certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the Custodian with
a clearing corporation of a national Securities exchange of
which the Custodian is a member; or (c) credit to the Account
of the Custodian with a Securities System, in accordance with
the provisions of Section 4(b)(3) hereof. Notwithstanding the
foregoing, Securities held in physical form may be delivered
and paid for in accordance with "street delivery custom" to a
broker or its clearing agent, against delivery to the Custodian
of a receipt for such Securities, provided that the Custodian
shall have taken reasonable steps to ensure prompt collection
of the payment for, or return of, such Securities by the broker
or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or
inability to perform of such broker or its clearing agent or
for any related loss arising from delivery or custody of such
Securities prior to receiving payment therefor.
(2) Other Assets Sold. Upon receipt of Instructions
and except as otherwise provided herein, the Custodian shall
receive payment for and deliver other Assets for the account of
a Fund as provided in Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to the
purchase of an option or sale of a covered call option, the
Custodian shall: (a) receive and retain confirmations or other
documents, if any, evidencing the purchase or writing of the
option by a Fund; (b) if the transaction involves the sale of a
covered call option, deposit and maintain in a segregated
account the Securities (either physically or by book-entry in a
Securities System) subject to the covered call option written
on behalf of such Fund; and (c) pay, release and/or transfer
such Securities, cash or other Assets in accordance with any
notices or other communications evidencing the expiration,
termination or exercise of such options which are furnished to
the Custodian by the Options Clearing Corporation (the "OCC"),
the securities or options exchanges on which such options were
traded, or such other organization as may be responsible for
handling such option transactions.
(2) Upon receipt of Instructions relating to the sale
of a naked option (including stock index and commodity
options), the Custodian, the appropriate Fund and the
broker-dealer shall enter into an agreement to comply with the
rules of the OCC or of any registered national securities
exchange or similar organizations(s). Pursuant to that
agreement and such Fund's Instructions, the Custodian shall:
(a) receive and retain confirmations or other documents, if
any, evidencing the writing of the option; (b) deposit and
maintain in a segregated account, Securities (either physically
or by book-entry in a Securities System), cash and/or other
Assets; and (c) pay, release and/or transfer such Securities,
cash or other Assets in accordance with any such agreement and
with any notices or other communications evidencing the
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expiration, termination or exercise of such option which
are furnished to the Custodian by the OCC, the securities or
options exchanges on which such options were traded, or such
other organization as may be responsible for handling such
option transactions. The appropriate Fund and the
broker-dealer shall be responsible for determining the quality
and quantity of assets held in any segregated account
established in compliance with applicable margin maintenance
requirements and the performance of other terms of any option
contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall enter into a
futures margin procedural agreement among the appropriate
Fund, the Custodian and the designated futures commission
merchant (a "Procedural Agreement"). Under the Procedural
Agreement the Custodian shall: (a) receive and retain
confirmations, if any, evidencing the purchase or sale of a
futures contract or an option on a futures contract by such
Fund; (b) deposit and maintain in a segregated account cash,
Securities and/or other Assets designated as initial,
maintenance or variation "margin" deposits intended to secure
such Fund's performance of its obligations under any futures
contracts purchased or sold, or any options on futures
contracts written by such Fund, in accordance with the
provisions of any Procedural Agreement designed to comply with
the provisions of the Commodity Futures Trading Commission
and/or any commodity exchange or contract market (such as the
Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release Assets from
and/or transfer Assets into such margin accounts only in
accordance with any such Procedural Agreements. The
appropriate Fund and such futures commission merchant shall be
responsible for determining the type and amount of Assets held
in the segregated account or paid to the broker-dealer in
compliance with applicable margin maintenance requirements and
the performance of any futures contract or option on a futures
contract in accordance with its terms.
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall establish
and maintain on its books a segregated account or accounts for
and on behalf of a Fund, into which account or accounts may be
transferred Assets of such Fund, including Securities
maintained by the Custodian in a Securities System pursuant to
Paragraph (b)(3) of this Section 4, said account or accounts
to be maintained (i) for the purposes set forth in Sections
4(g), 4(h) and 4(n) and (ii) for the purpose of compliance by
such Fund with the procedures required by the SEC Investment
Company Act Release Number 10666 or any subsequent release or
releases relating to the maintenance of segregated accounts by
registered investment companies, or (iii) for such other
purposes as may be set forth, from time to time, in Special
Instructions. The Custodian shall not be responsible for the
determination of the type or amount of Assets to be held in
any segregated account referred to in this paragraph, or for
compliance by the Fund with required procedures noted in (ii)
above.
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(j) Depository Receipts.
Upon receipt of Instructions, the Custodian shall surrender or
cause to be surrendered Securities to the depositary used for
such Securities by an issuer of American Depositary Receipts
or International Depositary Receipts (hereinafter referred to,
collectively, as "ADRs"), against a written receipt therefor
adequately describing such Securities and written evidence
satisfactory to the organization surrendering the same that
the depositary has acknowledged receipt of instructions to
issue ADRs with respect to such Securities in the name of the
Custodian or a nominee of the Custodian, for delivery in
accordance with such instructions.
Upon receipt of Instructions, the Custodian shall surrender or
cause to be surrendered ADRs to the issuer thereof, against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the
organization surrendering the same that the issuer of the ADRs
has acknowledged receipt of instructions to cause its
depository to deliver the Securities underlying such ADRs in
accordance with such instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
Upon receipt of Instructions, the Custodian shall: (a)
deliver warrants, puts, calls, rights or similar Securities to
the issuer or trustee thereof (or to the agent of such issuer
or trustee) for the purpose of exercise or sale, provided that
the new Securities, cash or other Assets, if any, acquired as
a result of such actions are to be delivered to the Custodian;
and (b) deposit Securities upon invitations for tenders
thereof, provided that the consideration for such Securities
is to be paid or delivered to the Custodian, or the tendered
Securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary in Instructions, to
comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall notify the appropriate Fund of
such action in writing by facsimile transmission or in such
other manner as such Fund and Custodian may agree in writing.
The Fund agrees that if it gives an Instruction for the
performance of an act on the last permissible date of a period
established by any optional offer or on the last permissible
date for the performance of such act, the Fund shall hold the
Bank harmless from any adverse consequences in connection with
acting upon or failing to act upon such Instructions.
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the Custodian to
purchase interest bearing fixed term and call deposits
(hereinafter referred to, collectively, as "Interest Bearing
Deposits") for the account of a Fund, the Custodian shall
purchase such Interest Bearing Deposits in the name of such
Fund with such banks or trust
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companies, including the Custodian, any Subcustodian or
any subsidiary or affiliate of the Custodian (hereinafter
referred to as "Banking Institutions"), and in such amounts as
such Fund may direct pursuant to Instructions. Such Interest
Bearing Deposits may be denominated in U.S. dollars or other
currencies, as such Fund may determine and direct pursuant to
Instructions. The responsibilities of the Custodian to a Fund
for Interest Bearing Deposits issued by the Custodian shall be
that of a U.S. bank for a similar deposit. With respect to
Interest Bearing Deposits other than those issued by the
Custodian, (a) the Custodian shall be responsible for the
collection of income and the transmission of cash to and from
such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or for the
failure of such Banking Institution to pay upon demand.
(m) Foreign Exchange Transactions Other than as Principal.
(1) Upon receipt of Instructions, the Custodian shall settle
foreign exchange contracts or options to purchase and
sell foreign currencies for spot and future delivery on
behalf of and for the account of a Fund with such
currency brokers or Banking Institutions as such Fund
may determine and direct pursuant to Instructions. Each
Fund accepts full responsibility for its use of third
party foreign exchange brokers and for execution of said
foreign exchange contracts and understands that the Fund
shall be responsible for any and all costs and interest
charges which may be incurred as a result of the failure
or delay of its third party broker to deliver foreign
exchange. The Custodian shall have no responsibility
with respect to the selection of the currency brokers or
Banking Institutions with which a Fund deals or, so long
as the Custodian acts in accordance with Instructions,
for the failure of such brokers or Banking Institutions
to comply with the terms of any contract or option.
(2) Notwithstanding anything to the contrary contained
herein, upon receipt of Instructions the Custodian may,
in connection with a foreign exchange contract, make
free outgoing payments of cash in the form of U.S.
Dollars or foreign currency prior to receipt of
confirmation of such foreign exchange contract or
confirmation that the countervalue currency completing
such contract has been delivered or received.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from a Fund, the Custodian
will release or cause to be released Securities held in
custody to the pledgees designated in such Instructions
by way of pledge or hypothecation to secure loans
incurred by such Fund with various lenders including but
not limited to UMB Bank, n.a.; provided, however, that
the Securities shall be released only upon payment to
the Custodian of the monies borrowed, except that in
cases where additional collateral is required to secure
existing borrowings, further Securities may be released
or delivered, or caused to be released or delivered for
that purpose upon receipt of Instructions. Upon receipt
of Instructions, the Custodian will
14
pay, but only from funds available for such purpose, any
such loan upon re-delivery to it of the Securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing such loan. In lieu of delivering collateral to a
pledgee, the Custodian, on the receipt of Instructions, shall
transfer the pledged Securities to a segregated account for the
benefit of the pledgee.
(2) Upon receipt of Special Instructions, and
execution of a separate Securities Lending Agreement, the
Custodian will release Securities held in custody to the
borrower designated in such Instructions and may, except as
otherwise provided below, deliver such Securities prior to the
receipt of collateral, if any, for such borrowing, provided
that, in case of loans of Securities held by a Securities
System that are secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the
Securities System deliver the Securities of the appropriate
Fund to the borrower thereof only upon receipt of the
collateral for such borrowing. The Custodian shall have no
responsibility or liability for any loss arising from the
delivery of Securities prior to the receipt of collateral.
Upon receipt of Instructions and the loaned Securities, the
Custodian will release the collateral to the borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all stock dividends,
rights, and other items of like nature and, upon receipt of
Instructions, take action with respect to the same as directed
in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all routine and
mechanical matters in accordance with industry standards in
connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with Securities or other property
of each Fund except as may be otherwise provided in this
Agreement or directed from time to time by Instructions from
any particular Fund. The Custodian may also make payments to
itself or others from the Assets for disbursements and
out-of-pocket expenses incidental to handling Securities or
other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted
for to the appropriate Fund.
(q) Collections.
The Custodian shall (a) collect amounts due and payable to
each Fund with respect to portfolio Securities and other
Assets; (b) promptly credit to the account of each Fund all
income and other payments relating to portfolio Securities and
other Assets held by the Custodian hereunder upon Custodian's
receipt of such income or payments or as otherwise agreed in
writing by the Custodian and any particular Fund; (c) promptly
endorse and deliver any instruments required to effect such
collection; and (d) promptly execute ownership and other
certificates and affidavits
15
for all federal, state, local and foreign tax purposes
in connection with receipt of income or other payments with
respect to portfolio Securities and other Assets, or in
connection with the transfer of such Securities or other
Assets; provided, however, that with respect to portfolio
Securities registered in so-called street name, or physical
Securities with variable interest rates, the Custodian shall
use its best efforts to collect amounts due and payable to any
such Fund. The Custodian shall notify a Fund in writing by
facsimile transmission or in such other manner as such Fund and
Custodian may agree in writing if any amount payable with
respect to portfolio Securities or other Assets is not received
by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with
respect to portfolio Securities or other Assets that are in
default.
(r) Bank Accounts.
Upon Instructions, the Custodian shall open and operate a bank
account or accounts on the books of the Custodian; provided
that such bank account(s) shall be in the name of the
Custodian or a nominee thereof, for the account of one or more
Funds, and shall be subject only to draft or order of the
Custodian. The responsibilities of the Custodian to any one
or more such Funds for deposits accepted on the Custodian's
books shall be that of a U.S. bank for a similar deposit.
(s) Dividends, Distributions and Redemptions.
To enable each Fund to pay dividends or other distributions to
shareholders of each such Fund and to make payment to
shareholders who have requested repurchase or redemption of
their shares of each such Fund (collectively, the "Shares"),
the Custodian shall release cash or Securities insofar as
available. In the case of cash, the Custodian shall, upon the
receipt of Instructions, transfer such funds by check or wire
transfer to any account at any bank or trust company
designated by each such Fund in such Instructions. In the
case of Securities, the Custodian shall, upon the receipt of
Special Instructions, make such transfer to any entity or
account designated by each such Fund in such Special
Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments
received for shares issued or sold from time to time by each
Fund, and shall credit such funds to the account of the
appropriate Fund. The Custodian shall notify the appropriate
Fund of Custodian's receipt of cash in payment for shares
issued by such Fund by facsimile transmission or in such other
manner as such Fund and the Custodian shall agree. Upon
receipt of Instructions, the Custodian shall: (a) deliver all
federal funds received by the Custodian in payment for shares
as may be set forth in such Instructions and at a time agreed
upon between the Custodian and such Fund; and (b) make federal
funds available to a Fund as of specified times agreed upon
from time to time by such Fund and the Custodian, in the
amount of checks received in payment for shares which are
deposited to the accounts of such Fund.
16
(u) Proxies and Notices; Compliance with the Shareholders
Communication Act of 1985.
The Custodian shall deliver or cause to be delivered to the
appropriate Fund all forms of proxies, all notices of
meetings, and any other notices or announcements affecting or
relating to Securities owned by such Fund that are received by
the Custodian, any Subcustodian, or any nominee of either of
them, and, upon receipt of Instructions, the Custodian shall
execute and deliver, or cause such Subcustodian or nominee to
execute and deliver, such proxies or other authorizations as
may be required. Except as directed pursuant to Instructions,
neither the Custodian nor any Subcustodian or nominee shall
vote upon any such Securities, or execute any proxy to vote
thereon, or give any consent or take any other action with
respect thereto.
The Custodian will not release the identity of any Fund to an
issuer which requests such information pursuant to the
Shareholder Communications Act of 1985 for the specific
purpose of direct communications between such issuer and any
such Fund unless a particular Fund directs the Custodian
otherwise in writing.
(v) Books and Records.
The Custodian shall maintain such records relating to its
activities under this Agreement as are required to be
maintained by Rule 31a-1 under the Investment Company Act of
1940 ("xxx 0000 Xxx") and to preserve them for the periods
prescribed in Rule 31a-2 under the 1940 Act. These records
shall be open for inspection by duly authorized officers,
employees or agents (including independent public accountants)
of the appropriate Fund during normal business hours of the
Custodian.
The Custodian shall provide accountings relating to its
activities under this Agreement as shall be agreed upon by
each Fund and the Custodian.
(w) Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as each Fund
may request to obtain from year to year favorable opinions
from each such Fund's independent certified public accountants
with respect to the Custodian's activities hereunder and in
connection with the preparation of each such Fund's periodic
reports to the SEC and with respect to any other requirements
of the SEC.
(x) Reports by Independent Certified Public Accountants.
At the request of a Fund, the Custodian shall deliver to such
Fund a written report prepared by the Custodian's independent
certified public accountants with respect to the services
provided by the Custodian under this Agreement, including,
without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding
cash, Securities and other Assets, including cash, Securities
and other Assets deposited and/or maintained in a Securities
System or
17
with a Subcustodian. Such report shall be of sufficient
scope and in sufficient detail as may reasonably be required by
such Fund and as may reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall pay, or
cause to be paid, all bills, statements, or other obligations
of a Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the relevant provisions of this
Agreement, the Custodian may appoint one or more Domestic
Subcustodians, Foreign Subcustodians, Special Subcustodians, or
Interim Subcustodians (as each are hereinafter defined) to act on
behalf of any one or more Funds. A Domestic Subcustodian, in
accordance with the provisions of this Agreement, may also appoint a
Foreign Subcustodian, Special Subcustodian, or Interim Subcustodian to
act on behalf of any one or more Funds. For purposes of this
Agreement, all Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians and Interim Subcustodians shall be referred to
collectively as "Subcustodians".
(a) Domestic Subcustodians.
The Custodian may, at any time and from time to time, appoint
any bank as defined in Section 2(a)(5) of the 1940 Act or any
trust company or other entity, any of which meet the
requirements of a custodian under Section 17(f) of the 1940
Act and the rules and regulations thereunder, to act for the
Custodian on behalf of any one or more Funds as a subcustodian
for purposes of holding Assets of such Fund(s) and performing
other functions of the Custodian within the United States (a
"Domestic Subcustodian"). Each Fund shall approve in writing
the appointment of the proposed Domestic Subcustodian; and the
Custodian's appointment of any such Domestic Subcustodian
shall not be effective without such prior written approval of
the Fund(s). Each such duly approved Domestic Subcustodian
shall be listed on Appendix A attached hereto, as it may be
amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a Domestic
Subcustodian to appoint, any bank, trust company or other
entity meeting the requirements of an "eligible foreign
custodian" under Section 17(f) of the 1940 Act and the rules
and regulations thereunder to act for the Custodian on behalf
of any one or more Funds as a subcustodian or sub-subcustodian
(if appointed by a Domestic Subcustodian) for purposes of
holding Assets of the Fund(s) and performing other functions
of the Custodian in countries other than the United States of
America (hereinafter referred to as a "Foreign Subcustodian"
in the context of either a subcustodian or a
sub-subcustodian); provided that the Custodian shall have
obtained written confirmation from each Fund of the approval
of the Board of Directors or other governing body of each such
Fund (which approval may be withheld in the sole
18
discretion of such Board of Directors or other governing
body or entity) with respect to (i) the identity of any
proposed Foreign Subcustodian (including branch designation),
(ii) the country or countries in which, and the securities
depositories or clearing agencies (hereinafter "Securities
Depositories and Clearing Agencies"), if any, through which,
the Custodian or any proposed Foreign Subcustodian is
authorized to hold Securities and other Assets of each such
Fund, and (iii) the form and terms of the subcustodian
agreement to be entered into with such proposed Foreign
Subcustodian. Each such duly approved Foreign Subcustodian and
the countries where and the Securities Depositories and
Clearing Agencies through which they may hold Securities and
other Assets of the Fund(s) shall be listed on Appendix A
attached hereto, as it may be amended, from time to time. Each
Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be
held in a country in which no Foreign Subcustodian is
authorized to act, in order that there shall be sufficient time
for the Custodian, or any Domestic Subcustodian, to effect the
appropriate arrangements with a proposed Foreign Subcustodian,
including obtaining approval as provided in this Section 5(b).
In connection with the appointment of any Foreign Subcustodian,
the Custodian shall, or shall cause the Domestic Subcustodian
to, enter into a subcustodian agreement with the Foreign
Subcustodian in form and substance approved by each such Fund.
The Custodian shall not consent to the amendment of, and shall
cause any Domestic Subcustodian not to consent to the amendment
of, any agreement entered into with a Foreign Subcustodian,
which materially affects any Fund's rights under such
agreement, except upon prior written approval of such Fund
pursuant to Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that a Fund shall
invest in an Asset to be held in a country in which no Foreign
Subcustodian is authorized to act, the Custodian shall notify
such Fund in writing by facsimile transmission or in such
other manner as such Fund and the Custodian shall agree in
writing of the unavailability of an approved Foreign
Subcustodian in such country; and upon the receipt of Special
Instructions from such Fund, the Custodian shall, or shall
cause its Domestic Subcustodian to, appoint or approve an
entity (referred to herein as an "Interim Subcustodian")
designated in such Special Instructions to hold such Security
or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the Custodian shall on
behalf of a Fund, appoint one or more banks, trust companies
or other entities designated in such Special Instructions to
act for the Custodian on behalf of such Fund as a subcustodian
for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities
through the use of a common custodian or subcustodian; (ii)
providing depository and clearing agency services with respect
to certain variable rate demand note Securities, (iii)
providing depository and clearing agency services with respect
to dollar denominated Securities, and (iv) effecting any other
transactions designated by such Fund in such Special
19
Instructions. Each such designated subcustodian
(hereinafter referred to as a "Special Subcustodian") shall be
listed on Appendix A attached hereto, as it may be amended from
time to time. In connection with the appointment of any
Special Subcustodian, the Custodian shall enter into a
subcustodian agreement with the Special Subcustodian in form
and substance approved by the appropriate Fund in Special
Instructions. The Custodian shall not amend any subcustodian
agreement entered into with a Special Subcustodian, or waive
any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion upon
notification to the appropriate Fund(s), terminate any
Subcustodian of such Fund(s) in accordance with the
termination provisions under the applicable subcustodian
agreement, and upon the receipt of Special Instructions, the
Custodian will terminate any Subcustodian in accordance with
the termination provisions under the applicable subcustodian
agreement.
(f) Certification Regarding Foreign Subcustodians.
Upon request of a Fund, the Custodian shall deliver to such
Fund a certificate stating: (i) the identity of each Foreign
Subcustodian then acting on behalf of the Custodian; (ii) the
countries in which and the Securities Depositories and
Clearing Agencies through which each such Foreign Subcustodian
is then holding cash, Securities and other Assets of such
Fund; and (iii) such other information as may be requested by
such Fund, and as the Custodian shall be reasonably able to
obtain, to evidence compliance with rules and regulations
under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to a Fund for all losses,
damages and reasonable costs and expenses suffered or incurred
by such Fund resulting from the gross negligence or willful
misfeasance of the Custodian; provided, however, in no event
shall the Custodian be liable for special, indirect or
consequential damages arising under or in connection with this
Agreement.
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Sovereign Risk, Etc.
In no event shall the Custodian or any Domestic Subcustodian
incur liability hereunder if the Custodian or any Subcustodian
or Securities System, or any subcustodian, Securities System,
Securities Depository or Clearing Agency utilized by the
Custodian or any such Subcustodian, or any nominee of the
Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to
perform, any act or thing which this Agreement provides shall
be performed or omitted to be performed, by reason of: (i)
any
20
provision of any present or future law or regulation or
order of the United States of America, or any state thereof, or
of any foreign country, or political subdivision thereof or of
any court of competent jurisdiction (and neither the Custodian
nor any other Person shall be obligated to take any action
contrary thereto); or (ii) any event beyond the control of the
Custodian or other Person such as armed conflict, riots,
strikes, lockouts, labor disputes, equipment or transmission
failures, natural disasters, or failure of the mails,
transportation, communications or power supply; or (iii) any
"Sovereign Risk." A "Sovereign Risk" shall mean
nationalization, expropriation, devaluation, revaluation,
confiscation, seizure, cancellation, destruction or similar
action by any governmental authority, de facto or de jure; or
enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange
controls, taxes, levies or other charges affecting a Fund's
Assets; or acts of armed conflict, terrorism, insurrection or
revolution; or any other act or event beyond the Custodian's or
such other Person's control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic Subcustodian shall have
any liability in respect of any loss, damage or expense
suffered by a Fund, insofar as such loss, damage or expense
arises from the performance of the Custodian or any Domestic
Subcustodian in reliance upon records that were maintained for
such Fund by entities other than the Custodian or any Domestic
Subcustodian prior to the Custodian's employment hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians shall be entitled
to receive and act upon advice of counsel of its own choosing
on all matters. The Custodian and all Domestic Subcustodians
shall be without liability for any actions taken or omitted in
good faith pursuant to the advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may rely upon the
advice of any Fund and upon statements of such Fund's
accountants and other persons believed by it in good faith to
be expert in matters upon which they are consulted, and
neither the Custodian nor any Domestic Subcustodian shall be
liable for any actions taken or omitted, in good faith,
pursuant to such advice or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall be fully
protected and indemnified in acting as a custodian hereunder
upon any Resolutions of the Board of Directors or Trustees,
Instructions, Special Instructions, advice, notice, request,
consent, certificate, instrument or paper appearing to it to
be genuine and to have been properly executed and shall,
unless otherwise specifically provided herein, be entitled to
receive as conclusive proof of any fact or matter required to
be
21
ascertained from any Fund hereunder a certificate signed
by any officer of such Fund authorized to countersign or
confirm Special Instructions.
(g) Exceptions from Liability.
Without limiting the generality of any other provisions
hereof, neither the Custodian nor any Domestic Subcustodian
shall be under any duty or obligation to inquire into, nor be
liable for:
(i) the validity of the issue of any Securities purchased by
or for any Fund, the legality of the purchase thereof or
evidence of ownership required to be received by any
such Fund, or the propriety of the decision to purchase
or amount paid therefor;
(ii) the legality of the sale of any Securities by or for any
Fund, or the propriety of the amount for which the same
were sold; or
(iii) any other expenditures, encumbrances of Securities,
borrowings or similar actions with respect to any
Fund's Assets;
and may, until notified to the contrary, presume that all
Instructions or Special Instructions received by it are not in
conflict with or in any way contrary to any provisions of any
such Fund's Declaration of Trust, Partnership Agreement,
Articles of Incorporation or By-Laws or votes or proceedings
of the shareholders, trustees, partners or directors of any
such Fund, or any such Fund's currently effective Registration
Statement on file with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic Subcustodians
The Custodian shall be liable for the acts or omissions of any
Domestic Subcustodian to the same extent as if such actions or
omissions were performed by the Custodian itself.
(b) Liability for Acts and Omissions of Foreign Subcustodians.
The Custodian shall be liable to a Fund for any loss or damage
to such Fund caused by or resulting from the acts or omissions
of any Foreign Subcustodian to the extent that, under the
terms set forth in the subcustodian agreement between the
Custodian or a Domestic Subcustodian and such Foreign
Subcustodian, the Foreign Subcustodian has failed to perform
in accordance with the standard of conduct imposed under such
subcustodian agreement and the Custodian or Domestic
Subcustodian recovers from the Foreign Subcustodian under the
applicable subcustodian agreement.
22
(c) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities Depositories and Clearing Agencies.
The Custodian shall not be liable to any Fund for any loss,
damage or expense suffered or incurred by such Fund resulting
from or occasioned by the actions or omissions of a Securities
System, Interim Subcustodian, Special Subcustodian, or
Securities Depository and Clearing Agency unless such loss,
damage or expense is caused by, or results from, the gross
negligence or willful misfeasance of the Custodian.
(d) Defaults or Insolvencies of Brokers, Banks, Etc.
The Custodian shall not be liable for any loss, damage or
expense suffered or incurred by any Fund resulting from or
occasioned by the actions, omissions, neglects, defaults or
insolvency of any broker, bank, trust company or any other
person with whom the Custodian may deal (other than any of
such entities acting as a Subcustodian, Securities System or
Securities Depository and Clearing Agency, for whose actions
the liability of the Custodian is set out elsewhere in this
Agreement) unless such loss, damage or expense is caused by,
or results from, the gross negligence or willful misfeasance
of the Custodian.
(e) Reimbursement of Expenses.
Each Fund agrees to reimburse the Custodian for all
out-of-pocket expenses incurred by the Custodian in connection
with this Agreement, but excluding salaries and usual overhead
expenses.
8. INDEMNIFICATION.
(a) Indemnification by Fund.
Subject to the limitations set forth in this Agreement, each
Fund agrees to indemnify and hold harmless the Custodian and
its nominees from all losses, damages and expenses (including
attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the
Custodian, its employees or agents in the performance of its
duties and obligations under this Agreement, including, but
not limited to, any indemnification obligations undertaken by
the Custodian under any relevant subcustodian agreement;
provided, however, that such indemnity shall not apply to the
extent the Custodian is liable under Sections 6 or 7 hereof.
If any Fund requires the Custodian to take any action with
respect to Securities, which action involves the payment of
money or which may, in the opinion of the Custodian, result in
the Custodian or its nominee assigned to such Fund being
liable for the payment of money or incurring liability of some
other form, such Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form satisfactory to it.
23
(b) Indemnification by Custodian.
Subject to the limitations set forth in this Agreement and in
addition to the obligations provided in Sections 6 and 7, the
Custodian agrees to indemnify and hold harmless each Fund from
all losses, damages and expenses suffered or incurred by each
such Fund caused by the gross negligence or willful
misfeasance of the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian or any
Subcustodian, Securities System, or Securities Depository or Clearing
Agency acting either directly or indirectly under agreement with the
Custodian (each of which for purposes of this Section 9 shall be
referred to as "Custodian"), makes any payment or transfer of funds on
behalf of any Fund as to which there would be, at the close of
business on the date of such payment or transfer, insufficient funds
held by the Custodian on behalf of any such Fund, the Custodian may,
in its discretion without further Instructions, provide an advance
("Advance") to any such Fund in an amount sufficient to allow the
completion of the transaction by reason of which such payment or
transfer of funds is to be made. In addition, in the event the
Custodian is directed by Instructions to make any payment or transfer
of funds on behalf of any Fund as to which it is subsequently
determined that such Fund has overdrawn its cash account with the
Custodian as of the close of business on the date of such payment or
transfer, said overdraft shall constitute an Advance. Any Advance
shall be payable by the Fund on behalf of which the Advance was made
on demand by Custodian, unless otherwise agreed by such Fund and the
Custodian, and shall accrue interest from the date of the Advance to
the date of payment by such Fund to the Custodian at a rate agreed
upon in writing from time to time by the Custodian and such Fund. It
is understood that any transaction in respect of which the Custodian
shall have made an Advance, including but not limited to a foreign
exchange contract or transaction in respect of which the Custodian is
not acting as a principal, is for the account of and at the risk of
the Fund on behalf of which the Advance was made, and not, by reason
of such Advance, deemed to be a transaction undertaken by the
Custodian for its own account and risk. The Custodian and each of the
Funds which are parties to this Agreement acknowledge that the purpose
of Advances is to finance temporarily the purchase or sale of
Securities for prompt delivery in accordance with the settlement terms
of such transactions or to meet emergency expenses not reasonably
foreseeable by a Fund. The Custodian shall promptly notify the
appropriate Fund of any Advance. Such notification shall be sent by
facsimile transmission or in such other manner as such Fund and the
Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the Custody Account to
secure payment of fees and expenses for the services rendered under
this Agreement. If the Bank advances cash or securities to the Fund
for any purpose or in the event that the Bank or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims
or liabilities in connection with the performance of its duties
hereunder, except such as may arise from its or its nominee's
negligent action, negligent failure to act or willful misconduct, any
24
Property at any time held for the Custody Account shall
be security therefor and the Fund hereby grants a security
interest therein to the Bank. The Fund shall promptly
reimburse the Bank for any such advance of cash or securities
or any such taxes, charges, expenses, assessments, claims or
liabilities upon request for payment, but should the Fund fail
to so reimburse the Bank, the Bank shall be entitled to dispose
of such Property to the extent necessary to obtain
reimbursement. The Bank shall be entitled to debit any account
of the Fund with the Bank including, without limitation, the
Custody Account, in connection with any such advance and any
interest on such advance as the Bank deems reasonable.
11. COMPENSATION.
Each Fund will pay to the Custodian such compensation as
is agreed to in writing by the Custodian and each such Fund
from time to time. Such compensation, together with all amounts
for which the Custodian is to be reimbursed in accordance with
Section 7(e), shall be billed to each such Fund and paid in
cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the Custodian
such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the
performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable
subcustodian agreement.
13. TERMINATION AND ASSIGNMENT.
Any Fund or the Custodian may terminate this Agreement
by notice in writing, delivered or mailed, postage prepaid
(certified mail, return receipt requested) to the other not
less than 90 days prior to the date upon which such termination
shall take effect. Upon termination of this Agreement, the
appropriate Fund shall pay to the Custodian such fees as may be
due the Custodian hereunder as well as its reimbursable
disbursements, costs and expenses paid or incurred. Upon
termination of this Agreement, the Custodian shall deliver, at
the terminating party's expense, all Assets held by it
hereunder to the appropriate Fund or as otherwise designated by
such Fund by Special Instructions. Upon such delivery, the
Custodian shall have no further obligations or liabilities
under this Agreement except as to the final resolution of
matters relating to activity occurring prior to the effective
date of termination.
This Agreement may not be assigned by the Custodian or
any Fund without the respective consent of the other, duly
authorized by a resolution by its Board of Directors or
Trustees.
14. ADDITIONAL FUNDS.
An additional Fund or Funds may become a party to this
Agreement after the date hereof by an instrument in writing to
such effect signed by such Fund or Funds and the Custodian. If
this Agreement is terminated as to one or more of the Funds
(but less than all of the Funds) or if an additional Fund or
Funds shall become a party to this Agreement, there shall be
delivered to each party an Appendix B or an amended Appendix B,
signed by each of the additional Funds (if any) and each of the
remaining Funds as well as the
25
Custodian, deleting or adding such Fund or Funds, as the
case may be. The termination of this Agreement as to less than
all of the Funds shall not affect the obligations of the
Custodian and the remaining Funds hereunder as set forth on the
signature page hereto and in Appendix B as revised from time to
time.
15. NOTICES.
As to each Fund, notices, requests, instructions and
other writings delivered to The Security Benefit Group of
Companies, 000 Xxxxxxxx, Xxxxxx, XX 00000-0000 , postage
prepaid, or to such other address as any particular Fund may
have designated to the Custodian in writing, shall be deemed to
have been properly delivered or given to a Fund.
Notices, requests, instructions and other writings
delivered to the Securities Administration Department of the
Custodian at its office at 000 Xxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx, or mailed postage prepaid, to the Custodian's
Securities Xxxxxxxxxxxxxx Xxxxxxxxxx, Xxxx Xxxxxx Xxx 000,
Xxxxxx Xxxx, Xxxxxxxx 00000, or to such other addresses as the
Custodian may have designated to each Fund in writing, shall be
deemed to have been properly delivered or given to the
Custodian hereunder; provided, however, that procedures for the
delivery of Instructions and Special Instructions shall be
governed by Section 2(c) hereof.
16. MISCELLANEOUS.
(a) This Agreement is executed and delivered in the
State of Missouri and shall be governed by the laws
of such state.
(b) All of the terms and provisions of this
Agreement shall be binding upon, and inure to
the benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be amended,
modified or waived, in any manner except in
writing, properly executed by both parties hereto;
provided, however, Appendix A may be amended from time
to time as Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians, and Securities
Depositories and Clearing Agencies are approved or
terminated according to the terms of this Agreement.
(d) The captions in this Agreement are included for
convenience of reference only, and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(e) This Agreement shall be effective as of the date
of execution hereof.
(f) This Agreement may be executed simultaneously in
two or more counterparts, each of which will be
deemed an original, but all of which together will
constitute one and the same instrument.
26
(g) The following terms are defined terms within the
meaning of this Agreement, and the definitions
thereof are found in the following sections of the
Agreement:
Term Section
---- -------
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2
Authorized Person 3
Banking Institution 4(l)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(l)
Liability 10
OCC 4(g)(2)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2
Securities Depositories and Clearing Agencies 5(b)
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2
Special Subcustodian 5(c)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law
or otherwise invalid by any court of competent
jurisdiction, the remaining portion or portions shall
be considered severable and shall not be affected, and
the rights and obligations of the parties shall be
construed and enforced as if this Agreement did not
contain the particular part, term or provision held to
be illegal or invalid.
(i) This Agreement constitutes the entire
understanding and agreement of the parties
hereto with respect to the subject matter hereof, and
accordingly supersedes, as of the effective date of
this Agreement, any custodian agreement heretofore in
effect between the Fund and the Custodian.
27
IN WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to be
executed by their respective duly authorized officers.
ATTEST: Security Ultra Fund
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Equity Fund
Equity Series
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Growth and Income Fund
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Income Fund
Corporate Bond Series
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Income Series
Limited Maturity Bond Series
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Income Fund
U. S. Government Series
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
28
ATTEST: Security Tax-Exempt Fund
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Cash Fund
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: SBL Fund
Series A, B, C, E, S and J
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
ATTEST: UMB BANK, N.A.
R. Xxxxxxx Xxxxx By: Xxxxx Xxxx
Title: Senior Vice President
January 11, 1995
29
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
--------- --------------------- -----------------
Euroclear
Security Income Fund
Security Ultra Fund Limited Maturity Bond Series
By: Xxxx X. Xxxxxxx By: Xxxx X. Xxxxxxx
Title: President Title: President
Security Equity Fund Security Income Fund
Equity Series U. S. Government Series
By: Xxxx X. Xxxxxxx By: Xxxx X. Xxxxxxx
Title: President Title: President
Security Growth and Income Fund SBL Fund
By: Xxxx X. Xxxxxxx By: Xxxx X. Xxxxxxx
Title: President Title: President
Security Income Fund
Corporate Bond Series UMB BANK, N.A.
By: Xxxx X. Xxxxxxx By: Xxxxx Xxxx
Title: President Title: Senior Vice President
January 11, 1995
30
AMENDMENT TO APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
--------- --------------------- -----------------
Euroclear
Security Income Fund
High Yield Series
By: XXXXX X. XXXXXXX
Title: Vice President & Treasurer
SBL Fund
Series B
Series E
Series P
By: XXXXX X. XXXXXXX
Title: Vice President & Treasurer
UMB BANK, N.A.
By: XXXXX XXXXXXX
Title: Vice President
Date: August 15, 1996
31
Amendment to Custody Agreement
The following open-end management investment companies ("Funds") are hereby
made parties to the Custody Agreement dated January 1, 1995, with UMB Bank,
n.a. ("Custodian"), and agrees to be bound by all the terms and conditions
contained in said Agreement:
List of Funds
Security Income Fund, High Yield Series
SBL Fund, Series P
ATTEST: Security Income Fund
High Yield Series
Xxx X. Xxx
By: Xxxx X. Xxxxxxx
Title: President
ATTEST: SBL Fund
Series P
Xxx X. Xxx By: Xxxx X. Xxxxxxx
Title: President
Date: August 15, 1996
ATTEST: By: Xxxxx Xxxx
Title: Senior Vice President
X. X. Xxxxx Date: April 29, 1996
32
Amendment to Custody Agreement
The following open-end management investment company ("Fund") is hereby made a
party to the Custody Agreement dated January 1, 1995, with UMB Bank, n.a.
("Custodian"), and agrees to be bound by all the terms and conditions contained
in said Agreement:
Security Equity Fund
Social Awareness Series
ATTEST: Security Equity Fund
Social Awareness Series
Xxxxx Xxxxxxxx
By: Xxxxx X. Xxxxxxx
Title: Vice President and Treasurer
ATTEST: UMB BANK, N.A.
Xxxxxxx Xxxxxxxx By: Xxxxx Xxxxxxx
Title: Vice President
Date: August 15, 1996
33
UMB Financial Corporation
CUSTODY FEE SCHEDULE
Security Management Group of Mutual Funds
Net Asset Value Charges
A fee to be computed as of month-end and payable on the last day of
each month of the portfolios' fiscal year, at the annual rate of:
0.275 basis points on the combined net assets of all portfolios,
subject to a $100.00 per month minimum per portfolio.
Portfolio Transaction Charges
DTC Book-Entry Transactions* $ 5.00
PTC Book-Entry Transactions* 11.50
Federal Book-Entry Transactions* 7.50
Physical Transactions* 18.00
Third Party (Bank Book-Entry) Transactions 15.00
Principal & Interest Paydowns 3.00
Options/Futures 25.00
Corporate Actions/Calls/Reorgs 30.00
*A transaction includes buys, sells, maturities, and free
security movements.
Out of Pocket Expenses
Including, but not limited to, security transfer fees, certificate
fees, shipping/courier fees or charges, FDIC insurance premiums, and
remote system access charges.
UMB Bank, N.A. agrees that the foregoing fees and charges will be in effect for
a period of three years beginning December 1, 1996, unless otherwise agreed by
the parties.
IN WITNESS WHEREOF, the parties hereto have executed this amendment
to the Custody Agreement dated January 1, 1995, this 26th day of November, 1996.
ATTEST: Security Ultra Fund
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Equity Fund
Equity Series
Social Awareness Series
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
34
ATTEST: Security Growth and Income Fund
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Income Fund
Corporate Bond Series
Limited Maturity Bond Series
U.S. Government Bond Series
High Yield Series
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Tax-Exempt Fund
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: Security Cash Fund
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: SBL Fund
Series A, B, C, E, S, J and P
XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -----------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ATTEST: UMB Bank, N.A.
R. WM. BLOOM By: XXXXXXXX X. XXXXXXXX
---------------------------- -----------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Senior Vice President
35
AMENDMENT TO APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
--------- --------------------- -----------------
Euroclear
Security Equity Fund
Value Series
By: XXX X. XXX
----------------
Title: Secretary
----------------
SBL Fund
Series V
By: XXX X. XXX
----------------
Title: Secretary
----------------
UMB BANK, N.A.
By: XXXXX XXXXXXX
----------------
Title: Vice President
----------------
Date: April 23, 1997
----------------
36
Amendment to Custody Agreement
The following open-end management investment company ("Funds") is hereby made
party to the Custody Agreement dated January 1, 1995, with UMB Bank, n.a.
("Custodian"), and agree to be bound by all the terms and conditions contained
in said Agreement:
List of Funds:
Security Equity Fund, Value Series
SBL Fund, Series V
Security Equity Fund
ATTEST: Value Series
XXXXX XXXXXXXX By: XXX X. XXX
-------------------------- --------------------------
Title: Secretary
SBL Fund
ATTEST: Series V
XXXXX XXXXXXXX By: XXX X. XXX
-------------------------- --------------------------
Title: Secretary
ATTEST: UMB BANK, N.A.
XXXXX XXXXXXXX By: Xxxxx Xxxxxxx
-------------------------- --------------------------
Title: Vice President
-----------------------
Date: February 14, 1997
-----------------------
37
AMENDMENT to APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
--------- --------------------- -----------------
Euroclear
Security Equity Fund
Small Company Series
By: XXXXX X. XXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Vice President and Treasurer
--------------------------------
Date: October 7, 1997
--------------------------------
SBL Fund
Series X
By: XXXXX X. XXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Vice President and Treasurer
--------------------------------
Date: October 7, 1997
--------------------------------
UMB BANK, N.A.
By: XXXXX XXXXXXX
--------------------------------
Title: Vice President
--------------------------------
Date: 9/26/97
--------------------------------
38
Amendment to Custody Agreement
The following open-end management investment company ("Fund") is hereby made
party to the Custody Agreement dated January 1, 1995, with UMB Bank, n.a.
("Custodian"), and agrees to be bound by all the terms and conditions contained
in said Agreement:
Security Equity Fund, Small Company Series
SBL Fund, Series X
Security Equity Fund
ATTEST: Small Company Series
XXX X. XXX By: XXXXX X. XXXXXXX
---------------------------- -------------------------------
Title: Vice President and Treasurer
SBL Fund
ATTEST: Series X
XXX X. XXX By: XXXXX X. XXXXXXX
---------------------------- -------------------------------
Title: Vice President and Treasurer
ATTEST: UMB BANK, N.A.
By: XXXXX XXXXXXX
---------------------------- -------------------------------
Title: Vice President
-------------------------------
Date: 9/26/97
-------------------------------
