CUSTODIAN CONTRACT
Between
SAFECO TAXABLE BOND TRUST
and
STATE STREET BANK AND TRUST COMPANY
Trust/Series
TABLE OF CONTENTS
PAGE
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1. Employment of Custodian and Property to be Held
By It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties of the Custodian with Respect to Property
of the Trust Held by the Custodian. . . . . . . . . . . . . . . . . . . . 1
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . . . . . . . . . 3
2.4 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Payments for Shares. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 Collection of Income . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Payment of Trust Monies. . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased. . . . . . . . . . . . . . . . . . . 5
2.9 Payments for Repurchases or Redemptions
of Shares of the Trust . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Appointment of Agents. . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Deposit of Trust Assets in Securities System . . . . . . . . . . . . 6
2.12 Trust Assets Held in the Custodian's Direct
Paper System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Ownership Certificates for Tax Purposes. . . . . . . . . . . . . . . 8
2.14 Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.15 Communications Relating to Portfolio
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.16 Proper Instructions. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.17 Actions Permitted Without Express Authority. . . . . . . . . . . . . 9
2.18 Evidence of Authority. . . . . . . . . . . . . . . . . . . . . . . . 9
3. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5. Reports to Trust by Independent Public Accountants. . . . . . . . . . . .10
6. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . . . . .10
7. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . . . . .10
8. Effective Period, Termination and Amendment . . . . . . . . . . . . . . .11
9. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . .12
10. Interpretive and Additional Provisions. . . . . . . . . . . . . . . . . .12
11. Additional Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
12. Massachusetts Law to Apply. . . . . . . . . . . . . . . . . . . . . . . .13
13. Custodian Representation. . . . . . . . . . . . . . . . . . . . . . . . .13
14. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . .13
15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
16. Shareholder Communications. . . . . . . . . . . . . . . . . . . . . . . .14
CUSTODIAN CONTRACT
This Contract between SAFECO Taxable Bond Trust , a business trust
organized and existing under the laws of Delaware, having its principal place
of business at XXXXXX Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 hereinafter called the
"Trust", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust currently offers shares in three series, the
Intermediate-Term U.S. Treasury Fund, GNMA Fund and High-Yield Bond Fund
(such series together with all other series subsequently established by the
Trust and made subject to this Contract in accordance with paragraph 11,
being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Trust pursuant to the provisions of the Trust
Instrument of the Trust and the Trust's Bylaws. The Trust on behalf of the
Portfolio(s) agrees to deliver to the Custodian all securities and cash of
the Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for
such new or treasury shares of capital stock of the Trust representing
interests in the Portfolios, ("Shares") as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.16), the Custodian shall on behalf of the applicable Portfolio(s) from time
to time employ one or more sub-custodians, but only in accordance with an
applicable vote by the Board of Trustees of the Trust on behalf of the
applicable Portfolio(s). The Custodian covenants with the Trust that each
agreement whereby the Custodian employs any such sub-custodian shall provide
that the sub-custodian will be liable to the Custodian for losses and
liabilities caused by the negligence or willful misconduct of the
sub-custodian. The Trust, on behalf of the Portfolio(s), agrees that, so
long as the Custodian has complied with its obligation set forth in the
preceding sentence, the Custodian shall have no more or less responsibility
or liability to the Trust on account of any actions or omissions of any
sub-custodian so employed by it on behalf of the Trust than any such
sub-custodian has to the Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST HELD BY THE
CUSTODIAN
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, including all
securities owned by such Portfolio, other than (a) securities which are
maintained pursuant to Section 2.11 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein as
"Securities System" and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.12.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("Direct Paper System
Account") only upon receipt of Proper Instructions from the Trust
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.11 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed,retired or otherwise become payable; provided that,
in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.10 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; PROVIDED that, in any such case, the new securities
are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street
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delivery" custom; provided that in any such case, the Custodian
shall have no responsibility or liability for any loss
arising from the delivery of such securities prior to
receiving payment for such securities except as may
arise from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian;
10) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Trust, for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to
time in the currently effective prospectus and statement of
additional information of the Trust, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
11) For any other proper Trust purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Trust on behalf
of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees signed by an officer
of the Trust and certified by the Secretary or an
Assistant Secretary, specifying the securities of the Portfolio to
be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper Trust purpose, and naming the person or persons to
whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Trust on behalf of
the Portfolio or of any nominee of the Custodian which nominee
shall be assigned exclusively to the Portfolio. All securities
accepted by the Custodian on behalf of the Portfolio under the
terms of this Contract shall be in "street name" or other good delivery
form. If, however, the Trust directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its best
efforts only to timely collect income due the Trust on such
securities and to notify the Trust on a best efforts basis only of
relevant corporate actions including, without limitation, pendency
of calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Portfolio of the Trust,
subject only order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts,
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subject to the provisions hereof, all cash received by it from or for
the account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Trusts held
by the Custodian for a Portfolio may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion
deem necessary or desirable; PROVIDED, however, that every such bank or
trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Trustees of the Trust. Such
funds shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian only in that
capacity.
2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
for the Shares or from the Transfer Agent of the Trust and deposit
into the account of the appropriate Portfolio such payments as are
received for Shares of that Portfolio issued or sold from time to
time by the Trust. The Custodian will provide timely notification
to the Trust on behalf of each such Portfolio and the Transfer
Agent of any receipt by it of payments for Shares of such Portfolio.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to
which each Portfolio shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities are
held by the Custodian or its agent thereof and shall credit such
income, as collected, to such Portfolio's custodian account.
Without limiting the generality of the foregoing, the Custodian
shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall
collect interest when due on securities held hereunder.
2.7 PAYMENT OF TRUST MONIES. Upon receipt of Proper Instructions from the
Trust on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of a Portfolio in the following
cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or any
bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Portfolio or
in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.11 hereof; (c) in the
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case of a purchase involving the Direct Paper System, in accordance
with the conditions set forth in Section 2.12; (d) in the
case of repurchase agreements entered into between the
Trust on behalf of the Portfolio and the Custodian, or
another bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities
or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the Custodian
to repurchase such securities from the Portfolio or (e)
for transfer to a time deposit account of the Trust in
any bank, whether domestic or foreign; such transfer may
be effected prior to receipt of a confirmation from a
broker and/or the applicable bank pursuant to Proper Instructions
from the Trust as defined in Section 2.16;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Section 2.9 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest,
taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Trust whether or not such
expenses are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends or capital gain distributions on
Shares of the Portfolio declared pursuant to the
governing documents of the Trust;
6) For any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions from the Trust on behalf of the
Portfolio, a certified copy of a resolution of the Board
of Trustees of the Trust signed by an officer of the
Trust and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring
such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any
and every case where payment for purchase of securities for the
account of a Portfolio is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific
written instructions from the Trust on behalf of such Portfolio to
so pay in advance, the Custodian shall be absolutely liable to the Trust
for such securities to the same extent as if the securities had
been received by the Custodian.
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2.9 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE TRUST. From
such funds as may be available for the purpose but subject to the
limitations of the Trust Instrument and Trust's Bylaws and any
applicable votes of the Board of Trustees of the Trust pursuant
thereto, the Custodian shall, upon receipt of instructions from the
Transfer Agent, make funds available for payment to holders of
Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares.
2.10 APPOINTMENT OF AGENTS. The Custodian may with the approval of an
officer of the Trust appoint (and may at any time remove) any other
bank or trust company which is itself qualified under the
Investment Company Act of 1940, as amended, to act as a custodian,
as its agent to carry out such of the provisions of this Article 2
as the Custodian may from time to time direct; PROVIDED, however,
that the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder. Neither the Custodian
nor the subcustodian shall be entitled to reimbursement by the
Trust or any Portfolios for any fees or expenses of any agent.
2.11 DEPOSIT OF TRUST ASSETS IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian
in the Securities System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a Securities System shall
identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the account
of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolio. The
Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities
System that payment for such securities has been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
transfer and payment for the account of the Portfolio.
Copies of all advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify
the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Trust at its request.
Upon request, the
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Custodian shall furnish the Trust on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and
shall furnish to the Trust on behalf of the Portfolio
copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of
the Portfolio.
4) The Custodian shall provide the Trust for the Portfolio with any
report obtained by the Custodian on the Securities
System's accounting system, internal accounting control
and procedures for safeguarding securities deposited in
the Securities System;
5) The Custodian shall have received from the Trust on behalf of the
Portfolio the initial or annual certificate, as the case
may be, required by Article 8 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent
to enforce effectively such rights as it may have against the
Securities System; at the election of the Trust, it shall
be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the
Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made
whole for any such loss or damage.
2.12 TRUST ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will
be effected in the absence of Proper Instructions from the Trust on
behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making of an entry
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on the records of the Custodian to reflect such transfer and receipt
of payment for the account of the Portfolio;
5) The Custodian shall furnish the Trust on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct Paper
on the next business day following such transfer and shall furnish
to the Trust on behalf of the Portfolio copies of daily transaction
sheets reflecting each day's transaction in the Securities System for
the account of the Portfolio;
6) The Custodian shall provide the Trust on behalf of the Portfolio with
any report on its system of internal accounting control as the Trust
may reasonably request from time to time.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of each Portfolio held by it and in connection with
transfers of securities.
2.14 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name
of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Trust for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of securities and expirations
of rights in connection therewith and notices of exercise of call and put
options written by the Trust on behalf of the Portfolio and the maturity
of futures contracts purchased or sold by the Portfolio) received by the
Custodian from issuers of the securities being held for the Portfolio.
With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Portfolio
shall notify the Custodian at least three business days prior to the date
on which the Custodian is to take such action.
2.16 PROPER INSTRUCTIONS. Proper Instructions as used throughout this Article
2 means a writing signed by two persons as the Board of Trustees shall
have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian
reasonably believes
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them to have been given by a person authorized to give such instructions
with respect to the transaction involved. The Trust shall cause all oral
instructions to be confirmed in writing. The Custodian shall confirm all
oral instructions with an officer of the Trust if written instructions are
not received within a week after the instructions are given. Upon receipt
of a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Trust accompanied by a
detailed description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford
adequate safeguards for the Portfolios' assets.
2.17 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust on behalf of each
applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, PROVIDED that all such payments shall be approved by an
officer of the Trust on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board of Trustees of the Trust.
2.18 EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly
executed by or on behalf of the Trust. The Custodian may receive and
accept a certified copy of a vote of the Board of Trustees of the Trust
as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by
the Board of Trustees pursuant to the Trust Bylaws as described in such
vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION
OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Trust to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio.
4. RECORDS
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The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Trust under the Investment Company
Act of 1940, with particular attention to Section 31 thereof and Rules 31a-1
and 31a-2 thereunder. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents of the Trust
and employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Trust's request, supply the Trust with a tabulation of
securities owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Trust and for such compensation as shall be agreed
upon between the Trust and the Custodian, include certificate numbers in such
tabulations.
5. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the Portfolios
at such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Trust to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.
6. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Trust on behalf of each applicable Portfolio and the Custodian.
7. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Trust for any action taken or omitted by it in good
faith without negligence, misfeasance, or misconduct of the Custodian or any
of its subcustodians or agents, or any of the Custodian's or any agent's
employees in the performance of the Custodian's duties under this agreement.
It shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted in good faith pursuant to such advice.
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If the Trust on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in the Custodian
or its nominee assigned to the Trust or the Portfolio being liable for the
payment of money or incurring liability of some other form, the Trust on behalf
of the Portfolio, as a prerequisite to requiring the Custodian to take such
action, shall agree to indemnify the Custodian in an amount and form
satisfactory to it.
If the Trust requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) for the benefit of a Portfolio, any property at any time held for
the account of the applicable Portfolio shall be security therefor and should
the Trust fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of such Portfolio's assets to the
extent necessary to obtain reimbursement.
8. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; PROVIDED,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.11 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Trust has
approved the initial use of a particular Securities System by such Portfolio,
as required by Rule 17f-4 under the Investment Company Act of 1940, as amended
and that the Custodian shall not with respect to a Portfolio act under Section
2.12 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has approved the
initial use of the Direct Paper System by such Portfolio; PROVIDED FURTHER,
however, that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Trust Bylaws, and further provided, that the Trust on behalf of one or
more of the Portfolios may at any time by action of its Board of Trustees (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Contract
in the event of the appointment of a conservator or receiver for the Custodian
by the Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
9. SUCCESSOR CUSTODIAN
If a successor custodian for the Trust, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Trust, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all cash,
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securities and any earned income associated with those securities (as received)
of each applicable Portfolio then held by it hereunder and shall transfer to
an account of the successor custodian all of the securities of each such
Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to
transfer to an account of such successor custodian all of the securities of
each such Portfolio held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
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 the Trust to procure the certified copy of the vote referred to or
of the Board of Trustees to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
10. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Trust on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract
as may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal
or state regulations or any provision of the Trust Instrument or the Trust's
Bylaws. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
11. ADDITIONAL FUNDS
In the event that the Trust establishes one or more series of Shares in
addition to the Intermediate-Term U.S. Treasury Fund, GNMA Fund and High-Yield
Bond Fund with respect to which it desires to have the Custodian render
services as custodian under the terms hereof, it shall so notify the Custodian
in writing, and if the Custodian agrees in writing to provide such services,
such series of Shares shall become a Portfolio hereunder.
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12. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
13. CUSTODIAN REPRESENTATION
The Custodian represents that it does meet, and will continue to meet at
all times that this Contract is in effect, the requirements of the rules and
regulations promulgated pursuant to Section 17(f) of the Investment Company Act
of 1940, as amended.
14. LIMITATION OF LIABILITY
The Custodian is hereby expressly put on notice of (i) the limitation of
shareholder, officer and trustee liability as set forth in the Trust Instrument
of the Trust and (ii) of the provisions in the Trust Instrument permitting the
establishment of separate Series and limiting the liability of each Series to
obligations of that Series. The Custodian hereby agrees that obligations
assumed by the Trust pursuant to this Contract are in all cases assumed on
behalf of a particular Series and each such obligation shall be limited in all
cases to that Series and its assets. The Custodian agrees that it shall not
seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Trust nor from the officers or trustees or any
individual officer or trustee of the Trust.
15. MISCELLANEOUS
This Agreement shall be binding on and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
the written consent of the Custodian or by the Custodian without the written
consent of the Trust. 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. This
Agreement may be executed in counterparts, each of which taken together shall
constitute one and the same instrument.
16. SHAREHOLDER COMMUNICATIONS
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Trust to indicate whether it authorizes the
Custodian to provide the Trust's name, address, and share position to
requesting companies whose stock the Trust own. If the Trust tells the
Custodian "no", the Custodian will not provide this information to requesting
companies. If the Trust tells the Custodian "yes" or do not check either "yes"
or "no" below, the Custodian is
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required by the rule to treat the Trust as consenting to disclosure of this
information for all securities owned by the Trust or any funds or accounts
established by the Trust. For the Trust's protection, the Rule prohibits the
requesting company from using the Trust's name and address for any purpose
other than corporate communications. Please indicate below whether the Trust
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Trust's name,
address, and share positions.
NO [X] The Custodian is not authorized to release the Trust's name,
address, and share positions.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 31st day of March , 1997.
ATTEST SAFECO TAXABLE BOND TRUST
/s/Xxxxx X. Xxxxxxxxx By /s/ Xxxx X. Xxxxxx
------------------------------- -------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Xxxxxxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxx
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Executive Vice President
