EXHIBIT 8
CUSTODY AGREEMENT
THIS AGREEMENT made the 1st day of September, 1992 by and between INVESTORS
FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of the state
of Missouri, having its trust office located at 000 Xxxx 00xx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000 ("Custodian"), and COMPOSITE BOND AND STOCK FUND, INC., a
Washington corporation, having its principal office and place of business at 000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian of the securities and monies of Fund's investment portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutual covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints
Custodian as custodian of the securities and monies at any time owned
by the Fund.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto,
properly certified or authenticated:
A. Resolutions of the Board of Directors of the Fund appointing
Custodian as custodian hereunder and approving the form of this
Agreement; and
B. Resolutions of the Board of Directors of the Fund designating
certain persons to give instructions on behalf of the Fund to
Custodian and authorizing Custodian to rely upon written
instructions over their signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. DELIVERY OF ASSET. Fund will deliver or cause to be delivered to
Custodian on the effective date of this Agreement, or as soon
thereafter as practicable, and from time to time thereafter, all
portfolio securities acquired by it and monies then owned by it
except as permitted by the Investment Company Act of 1940 or from
time to time coming into its possession during the time this
Agreement shall continue in effect. Custodian shall have no
responsibility or liability whatsoever for or on account of
securities or monies not so delivered. All securities so
delivered to Custodian (other than bearer securities) shall be
registered in the name of Fund or its nominee, or of a nominee of
Custodian, or shall be properly endorsed and in form for transfer
satisfactory to Custodian.
B. DELIVERY OF ACCOUNTS AND RECORDS. Fund shall turn over to
Custodian all of the Fund's relevant custody accounts and records
previously maintained by it or a prior custodian in order to
perform its duties hereunder. Custodian shall be entitled to rely
conclusively on the completeness and correctness of the accounts
and records turned over to it by Fund, and Fund shall indemnify
and hold Custodian harmless of and from any and all expenses,
damages and losses whatsoever arising out of or in connection
with any error, omission, inaccuracy or other deficiency of such
accounts and records or in the failure of Fund to provide any
portion of such or to provide any information needed by the
Custodian knowledgeably to perform its function hereunder.
C. DELIVERY OF ASSETS TO THIRD PARTIES. Custodian will receive
delivery of and keep safely the assets of Fund delivered to it
from time to time and the assets of each Portfolio segregated in
a separate account. Custodian will not deliver, assign, pledge or
hypothecate any such assets to any person except as permitted by
the provisions of this Agreement or any agreement executed by it
according to the terms of Section 3.S. of this Agreement. Upon
delivery of any such assets to a subcustodian pursuant to Section
3.S. of this Agreement, Custodian will create and maintain
records identifying those assets which have been delivered to the
subcustodian as belonging to the applicable Portfolio of the
Fund. The Custodian is responsible for the safekeeping of the
securities and monies of Fund only until they have been
transmitted to and received by other persons as permitted under
the terms of this Agreement, except for securities and monies
transmitted to United Missouri Bank of Kansas City, N.A. (UMBKC),
United Missouri Trust Company of New York (UMBTC), and First
National Bank of Chicago (FNBC) for which Custodian remains
responsible. Custodian shall be responsible for the monies and
securities of Fund(s) held by eligible foreign subcustodians to
the extent the domestic subcustodian with which the Custodian
contracts is responsible to Custodian. Custodian may participate
directly or indirectly through a subcustodian in the Depository
Trust Company, Treasury/Federal Reserve Book Entry System,
Participant Trust Company, Treasury/Federal Reserve Book Entry
System, Participant Trust Company or other depository approved by
the Fund (as such entities are defined at 17 CFR Section
270.17f(b)).
D. REGISTRATION OF SECURITIES. Custodian will hold stocks and other
registerable portfolio securities of Fund registered in the name
of the Fund or in the name of any nominee of Custodian for whose
fidelity and liability Custodian will be fully responsible, or in
street certificate form, so-called, with or without any
indication of fiduciary capacity. Unless otherwise instructed,
Custodian will register all such portfolio securities in the name
of its authorized nominee. All securities, and the ownership
thereof by Fund, which are held by Custodian hereunder, however,
shall at all times be identifiable on the records of the
Custodian. The Fund agrees to hold Custodian and its nominee
harmless for any liability as a record holder of securities held
in custody.
E. EXCHANGE OF SECURITIES. Upon receipt of instructions as defined
herein in Section 4.A, Custodian will exchange, or cause to be
exchanged, portfolio securities held by it for the account of
Fund for other securities or cash issued or paid in connection
with any reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or otherwise,
and will deposit any such securities in accordance with the terms
of any reorganization or protective plan. Without instructions,
Custodian is authorized to exchange securities held by it in
temporary form for securities in definitive form, to effect an
exchange of shares when the par value of the stock is changed,
and upon receiving payment therefor, to surrender bonds or other
securities held by it at maturity or when advised of earlier call
for redemption, except that Custodian shall receive instructions
prior to surrendering any convertible security.
F. PURCHASES OF INVESTMENTS OF THE FUND. Fund will, on each business
day on which a purchase of securities shall be made by it,
deliver to Custodian instructions which shall specify with
respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer
through whom the purchase was made.
In accordance with such instructions, Custodian will pay for out
of monies held for the account of Fund, but only insofar as
monies are available therein for such purpose, and receive the
portfolio securities so purchased by or for the account of Fund
except that Custodian may in its sole discretion advance funds to
the Fund which may result in an overdraft because the monies held
by the Custodian on behalf of the Fund are insufficient to pay
the total amount payable upon such purchase. Such payment will be
made only upon receipt by Custodian of the securities so
purchased in form for transfer satisfactory to Custodian.
G. Sales and Deliveries of Investments of the Fund - Other than
Options and Futures Fund will, on each business day on which a
sale of investment securities of Fund has been made, deliver to
Custodian instructions specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be
delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes
or other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or
cause to be delivered the securities thus designated as sold for
the account of Fund to the broker or other person specified in
the instructions relating to such sale, such delivery to be made
only upon receipt of payment therefor in such form as is
satisfactory to Custodian, with the understanding that Custodian
may deliver or cause to be delivered securities for payment in
accordance with the customs prevailing among dealers in
securities.
H. Purchases or Sales of Security Options, Options on Indices and
Security Index Futures Contracts Fund will, on each business day
on which a purchase or sale of the following options and/or
futures shall be made by it, deliver to Custodian instructions
which shall specify with respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom
the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other
applicable settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and,
when available, the closing level, thereof;
b. The index level on the date the contract is entered
into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition
to instructions, and if not already in the
possession of Custodian, Fund shall deliver a
substantially complete and executed custodial
safekeeping account and procedural agreement which
shall be incorporated by reference into this Custody
Agreement); and
f. The name and address of the futures commission
merchant through whom the sale or purchase was made,
or other applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of Fund:
1. Upon receipt of instructions, Custodian will release or
cause to be released securities held in custody to the
pledgee designated in such instructions by way of pledge or
hypothecation to secure any loan incurred by Fund; provided,
however, that the securities shall be released only upon
payment to Custodian of the monies borrowed, except that in
cases where additional collateral is required to secure a
borrowing already made, further securities may be released
or caused to be released for that purpose upon receipt of
instructions. Upon receipt of instructions, Custodian will
pay, but only from funds available for such purpose, any
such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or
notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated in
such instructions; provided, however, that the securities
will be released only upon deposit with Custodian of full
cash collateral as specified in such instructions, and that
Fund will retain the right to any dividends, interest or
distribution on such loaned securities. Upon receipt of
instructions and the loaned securities, Custodian will
release the cash collateral to the borrower.
J. ROUTINE MATTERS.Custodian will, in general, attend to all routine
and mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of Fund except as may be otherwise
provided in this Agreement or directed from time to time by the
Board of Directors of Fund.
K. DEPOSIT ACCOUNT. Custodian will open and maintain a special
purpose deposit accounts in the name of Custodian ("Account"),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the
account of a portfolio shall be deposited in said Account,
barring events not in the control of the Custodian such as
strikes, lockouts or labor disputes, riots, war or equipment or
transmission failure or damage, fire, flood, earthquake or other
natural disaster, action or inaction of governmental authority or
other causes beyond its control, at 9:00 a.m., Kansas City time,
on the second business day after deposit of any check into Fund's
Account, Custodian agrees to make Fed Funds available to the Fund
in the amount of the check. Deposits made by Federal Reserve wire
will be available to the Fund immediately and ACH wires will be
available to the Fund on the next business day. Income earned on
the portfolio securities will be credited to the applicable
portfolio of the Fund based on the schedule attached as Exhibit
A. The Custodian will be entitled to reverse any credited amounts
where credits have been made and monies are not finally
collected. If monies are collected after such reversal, the
Custodian will credit the applicable portfolio in that amount.
Custodian may open and maintain an Account in such other banks or
trust companies as may be designated by it or by properly
authorized resolution of the Board of Directors of Fund, such
Account, however, to be in the name of custodian and subject only
to its draft or order.
L. INCOME AND OTHER PAYMENTS TO FUND
Custodian will:
1. Collect, claim and receive and deposit for the Account of
Fund all income and other payments which become due and
payable on or after the effective date of this Agreement with
respect to the securities deposited under this Agreemenet,
and credit the account of Fund in accordance with the
schedule attached hereto as Exhibit A. If for any reason,
the Fund is credited with income that is not subsequently
collected, Custodian may reverse that credited amount;
2. Execute ownership and other certificates and affidavits for
all federal, state and local tax purposes in connection with
the collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. The collection, receipt and deposit of such income and
other payments, including but not limited to the
presentation for payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be
called, redeemed, retired or otherwise become
payable and regarding which the Custodian has
actual knowledge, or notice of which is contained
in publications of the type to which it normally
subscribes for such purpose; and
b. the endorsement for collection, in the name of the
Fund, of all checks, drafts or other negotiable
instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights or other
similar items and will deal with the same pursuant to instructions.
Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights held for
the account of Fund on the last trade date prior to the date of
expiration of such rights.
M. PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS. On the declaration
of any dividend or other distribution on the shares of Capital
Stock of Fund ("Fund Shares") by the Board of Directors of Fund,
Fund shall deliver to Custodian instructions with respect
thereto, including a copy of the Resolution of said Board of
Directors certified by the Secretary or Assistant Secretary of
Fund wherein there shall be set forth the record date as of which
shareholders entitled to receive such dividend or other
distribution shall be determined, the date of payment of such
dividend or distribution, and the amount payable per share on
such dividend or distribution. Except if the ex-dividend date and
the reinvestment date of any dividend are the same, in which case
funds shall remain in the Custody Account, on the date specified
in such Resolution for the payment of such dividend or other
distribution, Custodian will pay out of the monies held for the
account of Fund, insofar as the same shall be available for such
purposes, and credit to the account of the Dividend Disbursing
Agent for Fund, such amount as may be necessary to pay the amount
per share payable in cash on Fund Shares issued and outstanding
on the record date established by such Resolution.
N. SHARES OF FUND PURCHASED BY FUND. Whenever any Fund Shares are
repurchased or redeemed by Fund, Fund or its agent shall advise
Custodian of the aggregate dollar amount to be paid for such
shares and shall confirm such advice in writing. Upon receipt of
such advice, Custodian shall charge such aggregate dollar amount
to the Account of Fund and either deposit the same in the account
maintained for the purpose of paying for the repurchase or
redemption of Fund Shares or deliver the same in accordance with
such advice. Custodian shall not have any duty or responsibility
to determine that Fund Shares have been removed from the proper
shareholder account or accounts or that the proper number of such
shares have been cancelled and removed from the shareholder
records.
O. SHARES OF FUND PURCHASED FROM FUND. Whenever Fund Shares are
purchased from Fund, Fund will deposit or cause to be deposited
with Custodian the amount received for such shares. Custodian
shall not have any duty or responsibility to determine that Fund
Shares purchased from Fund have been added to the proper
shareholder account or accounts or that the proper number of such
shares have been added to the shareholder records.
P. PROXIES AND NOTICES. Custodian will promptly deliver or mail or
have delivered or mailed to Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to securities
held by Custodian for Fund and will, upon receipt of
instructions, execute and deliver or cause its nominee to execute
and deliver or mail or have delivered or maield such proxies or
other authorizations as may be required. Except as provided by
this Agreement or pursuant to instructions hereafter received by
Custodian, neither it nor its nominee will exercise any power
inherent in any such securities, including any power to vote the
same, or execute any proxy, power of attorney, or other similar
instrument voting any of such securities, or give any consent,
approval or waiver with respect thereto, or take any other
similar action.
Q. DISBURSEMENTS. Custodian will pay or cause to be paid insofar as
funds are available for the purpose, bills, statements and other
obligations of Fund (including but not limited to obligations in
connection with the conversion, exchange or surrender of
securities owned by Fund, interest charges, dividend
disbursements, taxes, management fees, custodian fees, legal
fees, auditors' fees, transfer agents' fees, brokerage
commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth
the name of the person to whom payment is to be made, the amount
of the payment, and the purpose of the payment.
R. DAILY STATEMENT OF ACCOUNTS. Custodian will, within a reasonable
time, render to Fund as of the close of business on each day, a
detailed statement of the amounts received or paid and of
securities received or delivered for the account of Fund during
said day. Custodian will, from time to time, upon request by
Fund, render a detailed statement of the securities and monies
held for Fund under this Agreement, and Custodian will maintain
such books and records as are necessary to enable it to do so and
will permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded,
will permit federal or state regulatory agencies to examine the
securities, books and records. Upon the written instructions of
Fund or as demanded by federal or state regulatory agencies,
Custodian will instruct any subcustodian to give such persons as
are authorized by Fund including Fund's independent public
accountants, access to such records or confirmation of the
contents of such records; and if demanded, to permit federal and
state regulatory agencies to examine the books, records and
securities held by subcustodian which relate to Fund.
S. APPOINTMENT OF SUBCUSTODIANS.
1. Notwithstanding any other provisions of this Agreement, all
or any of the monies or securities if Fund may be held in
Custodian's own custody or in the custody of one or more
other banks or trust companies selected by Custodian. Any
such subcustodian selected by the Custodian must have the
qualifications required for custodian under the Investment
Company Act of 1940, as amended. The Custodian may
participate directly or indirectly in the Depository Trust
Company, Treasury/Federal Reserve Book Entry System,
Participant Trust Company (as such entities are defined at
17 CFR Sec. 270.17f-4(b)), or other depository approved by
the Fund and with which Custodian has a satisfactory direct
or indirect contractual relationship. Custodian will appoint
UMBKC and UMBNY as subcustodians and Custodian shall be
responsible for UMBKC and UMBNY to the same extent it is
responsible to the Fund under Section 5 of this Agreement.
Custodian is not responsible for DTC, the Treasury/Federal
Reserve Book Entry System, and PTC except to the extent such
entities are responsible to Custodian. Upon instruction of
the Fund, Custodian shall be willing to contract with such
entities as Bank of New York (BONY), Xxxxxx Guaranty and
Trust Company (MGTC), Chemical Bank (CB), and Bankers Trust
Company (BT) for variable rate securities and Custodian will
be responsible to the Fund to the same extent those entities
are responsible to Custodian. The Fund shall be entitled to
review Custodian's contracts with BONY, MGTC, CB, and BT.
T. ACCOUNTS AND RECORDS PROPERTY OF FUND. Custodian acknowledges
that all of the accounts and records maintained by Custodian
pursuant to this Agreement are the property of Fund, and will be
made available to Fund for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist
Fund's independent auditors, or upon approval of Fund, or upon
demand, any regulatory body having jurisdiction over the Fund or
Custodian, in any requested review of Fund's accounts and records
but shall be reimbursed for all expenses and employee time
invested in any such review outside of routine and normal
periodic reviews.
U. ADOPTION OF PROCEDURES. Custodian and Fund may from time to time
adopt procedures as they agree upon, and Custodian may
conclusively assume that no procedure approved by Fund, or
directed by Fund, conflicts with or violates any requirements of
its prospectus, "Articles of Incorporation," Bylaws, or any rule
or regulation of any regulatory body or governmental agency. Fund
will be responsible to notify Custodian of any changes in
statutes, regulations, rules or policies which might necessitate
changes in Custodian's responsibilities or procedures.
V. OVERDRAFTS. If Custodian shall in its sole discretion advance
funds to the account of the Fund which results in an overdraft
because the monies held by Custodian on behalf of the Fund are
insufficient to pay the total amount payable upon a purchase of
securities as specified in a Fund's instructions or for some
other reason, the amount of the overdraft shall be payable by the
Fund to Custodian upon demand and shall bear an interest rate
determined by Custodian from the date advanced until the date of
payment. Custodian shall have a lien on the assets of Fund in the
amount of any outstanding overdraft.
4. INSTRUCTIONS.
A. The term "instructions," as used herein, means written or
oral instructions to Custodian from a designated
representative of Fund. Certified copies of resolutions of
the Board of Directors of Fund naming one or more designated
representatives to give instructions in the name and on
behalf of Fund, may be received and accepted from time to
time by Custodian as conclusive evidence of the authority of
any designated representative to act for Fund and may be
considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until
receipt by Custodian of notice to the contrary. Unless the
resolution delegating authority to any person to give
instructions specifically requires that the approval of
anyone else will first have been obtained, Custodian will be
under no obligation to inquire into the right of the person
giving such instructions to do so. Notwithstanding any of
the foregoing provisions of this Section 4. no
authorizations or instructions received by Custodian from
Fund, will be deemed to authorize or permit any director,
trustee, officer, employee, or agent of Fund to withdraw any
of the securities or similar investments of Fund upon the
mere receipt of such authorization or instructions from such
director, trustee, officer, employee or agent.
B. No later than the next business day immediately following
each oral instruction, Fund will send Custodian written
confirmation of such oral instruction. At Custodian's sole
discretion, Custodian may record on tape, or otherwise, any
oral instruction whether given in person or via telephone,
each such recording identifying the parties, the date and
the time of the beginning and ending of such oral
instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from and
against any loss or liability arising out of Custodian's
negligence or bad faith. Custodian shall not be liable for
consequential damages, special, or punitive damages.
Custodian may request and obtain the advice and opinion of
counsel for Fund, or of its own counsel with respect to
questions or matters of law, and it shall be without
liability to Fund for any action taken or omitted by it in
good faith, in conformity with such advice or opinion. If
Custodian reasonably believes that it could not prudently
act according to the instructions of the Fund or the Fund's
counsel, it may in its discretion, with notice to the Fund,
not act according to such instructions.
B. Custodian may rely upon the advice of Fund and upon
statements of Fund's accountants and other persons believed
by, it in good faith, to be expert in matters upon which
they are consulted, and Custodian shall not be liable for
any actions taken, in good faith, upon such statements.
C. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the
payment of money by it, or which in Custodian's opinion
might make it or its nominee liable for payment of monies or
in any other way, Custodian, upon notice to Fund given prior
to such actions, shall be and be kept indemnified by Fund in
an amount and form satisfactory to Custodian against any
liability on account of such action.
D. Custodian shall be entitled to receive, and Fund agrees to
pay Custodian, on demand, reimbursement for such cash
disbursements, costs and expenses as may be agreed upon from
time to time by Custodian and Fund.
E. Custodian shall be protected in acting as custodian
hereunder upon any instructions, advice, notice, request,
consent, certificate or other instrument or paper reasonably
appearing to it to be genuine and to have been properly
executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from Fund
hereunder, a certificate signed by the Fund's President, or
other officer specifically authorized for such purpose.
F. Without limiting the generality of the foregoing, Custodian
shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any securities purchased by or
for Fund, the legality of the purchase thereof or evidence
of ownership required by Fund to be received by Custodian,
or the propriety of the decision to purchase or amount paid
therefor;
2. The legality of the sale of any securities by or for Fund,
or the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the
Capital Stock of Fund, or the sufficiency of the amount to
be received therefor;
4. The legality of the repurchase or redemption of any Fund
Shares, or the propriety of the amount to be paid therefor;
or
5. The legality of the declaration of any dividend by Fund, or
the legality of the issue of any Fund Shares in payment of
any stock dividend.
G. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft,
wire transfer, clearing house funds, uncollected funds, or
instrument for the payment of money received by it on behalf
of the Fund, until Custodian actually receives such money,
provided only that it shall advise Fund promptly if it fails
to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund
toward the end that such money shall be received.
H. Custodian shall not be responsible for loss occasioned by
the acts, neglects, defaults or insolvency of any broker,
bank, trust company, or any other person with whom Custodian
may deal in the absence of negligence, or bad faith on the
part of the Custodian.
I. Notwithstanding anything herein to the contrary, Custodian
may, and with respect to any foreign subcustodian appointed
under Section 3.S.2. must, provide the Fund for its
approval, agreements with banks or trust companies which
will act as subcustodians for Fund pursuant to Section 3.S
of this Agreement.
6. COMPENSATION. Fund will pay Custodian such compensation as is
stated in the Fee Schedule attached hereto as Exhibit B which may
be changed from time to time as agreed to in writing by Custodian
and Fund. Custodian may charge such compensation against monies
held by it for the account of Fund. Custodian will also be
entitled, notwithstanding the provisions of Sections 5.C. or 5.D.
hereof, to charge against any monies held by it for the account
of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement under the
provisions of this Agreement including fees or expenses due to
Custodian for other services provided to the Fund by the
Custodian.
7. TERMINATION. Either party to this Agreement may terminate the
same by notice in writing, delivered or mailed, postage prepaid,
to the other party hereto and received not less than ninety (90)
days prior to the date upon which such termination will take
effect. Upon termination of this Agreement, Fund will pay to
Custodian such compensation for its reimbursable disbursements,
costs and expenses paid or incurred to such date and Fund will
use its best efforts to obtain a successor custodian. Unless the
holders of a majority of the outstanding shares of "Capital
Stock" of Fund vote to have the securities, funds and other
properties held under this Agreement delivered and paid over to
some other person, firm or corporation specified in the vote,
having not less than Two Million Dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last
published report, and meeting such other qualifications for
custodian as set forth in the Bylaws of Fund, the Board of
Directors of Fund will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian
a bank or trust company having such qualifications. Custodian
will, upon termination of this Agreement, deliver to the
successor custodian so specified or appointed, at Custodian's
office, all securities then held by Custodian hereunder, duly
endorsed and in form for transfer, all funds and other properties
of Fund deposited with or held by Custodian hereunder, or will
cooperate in effecting changes in book-entries at the Depository
Trust Company or in the Treasury/Federal Reserve Book-Entry
System pursuant to 31 CFR Sec. 306.118. In the event no such vote
has been adopted by the stockholders of Fund and no written order
designating a successor custodian has been delivered to Custodian
on or before the date when such termination becomes effective,
then Custodian will deliver the securities, funds and properties
of Fund to a bank or trust company at the selection of Custodian
and meeting the qualifications for custodian, if any, set forth
in the Bylaws of Fund and having not less than Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report. Upon either such
delivery to a successor custodian, Custodian will have no further
obligations or liabilities under this Agreement. Thereafter such
bank or trust company will be the successor custodian under this
Agreement and will be entitled to reasonable compensation for its
services. In the event that no such successor custodian can be
found, Fund will submit to its shareholders, before permitting
delivery of the cash and securities owned by Fund to anyone other
than a successor custodian, the question of whether Fund will be
liequidated or function without a custodian. Notwithstanding the
foregoing requirement as to delivery upon termination of this
Agreement, Custodian may make any other delivery of the
securities, funds and property of Fund which is permitted by the
Investment Company Act of 1940, Fund's Certificate of
Incorporation and Bylaws then in effect or apply to a court of
competent jurisdiction for the appointment of a successor
custodian.
8. NOTICES. Notices, requests, instructions and other writings
received by Fund at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx, 00000 or at such other address as Fund may
have designated to Custodian in writing, will be deemed to have
been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its
offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or
to such other address as it may have designated to Fund in
writing, will be deemed to have been properly given to Custodian
hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified,
in any manner except by a written agreement properly
authorized and executed by both parties hereto.
D. The captions in this Agreement are included for convenience
of reference only, and in no way define or delimit any of
the provisions hereof or otherwise affect their construction
or effect.
E. This Agreement 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.
F. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
G. Custodian will not release the identity of Fund to an issuer
which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of
direct communications between such issuer and Fund unless
the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without
prior written consent of the other party.
I. If any provision of the Agreement, either in its present
form or as amended from time to time, limits, qualifies, or
conflicts with the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated
thereunder, such statutes, rules and regulations shall be
deemed to control and supercede such provision without
nullifying or terminating the remainder of the provisions of
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST
COMPANY
By: /s/ Xxxxx Xxxxxx
Title: Senior V.P.
COMPOSITE BOND & STOCK
FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
TRANSACTION DTC PHYSICAL FED
TYPE CR DATE FDS TYPE CR DATE FDS TYPE CR DATE FDS TYPE
Calls Puts As Received C of F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C or F* As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Paydate C Paydate C N/A
Int.
Floating Rate N/A As Rate C N/A
Int. (No Rate) Received
Mtg. Backed P&I Paydate C Paydate + 1 C Paydate F
Bus. Day
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
Legend
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
INVESTORS FIDUCIARY TRUST COMPANY
COMPOSITE GROUP OF FUNDS
FEE SCHEDULE
I. SECURITY CUSTODY
A. Domestic Securities
Asset-Based Fee on a total relationship basis:
1.0/100 of 1% (1 basis point) on the first $500 million in assets
.75/100 of 1% (.75 basis points) on the next $500 million in assets
.5/100 of 1% (.5 basis points) on all assets over $1 billion in assets
Transaction Fee, per transaction:
Physical Delivery - $20.00
Depository Eligible - $8.00
Participant Trust Company (PTC) Eligible - $12.00
PTC Asset-backed Security Paydown - $7.50
Other Asset-backed Security Paydown - $10.00
Overnight Sweeps - $5.00 (buy-side only)
Federal Funs Wire Received or Delivered - $6.00
B. Foreign Securities
See Appendix I for Global Fee Agreement.
C. Balance Credits
IFTC will offset fees with balance credits calculated at 75% of the
bank credit rate (see below) applied to average custody collected cash
balances for the month. Balance credits can be used to offset fees.
Any credits in excess of fees will be carried forward from month to
month through the end of the calendar year. For calculation purposes,
IFTC uses an actual/actual basis.
Note: The bank credit rate is the equivalent to the lesser of:
The average 91-day Treasury Xxxx discount rate for the month
or
The average Federal Funds rate for the month less 50 basis points.
II. NOTES TO THE ABOVE FEE SCHEDULE
A. Asset based fees will be billed monthly at 1/12th of the annual
stated rate based on monthly average net assets. Annual
maintenance fees are payable monthly at 1/12th of the annual
stated rate.
B. The above schedule does not include out-of-pocket expenses that
would be incurred by IFTC on the client's behalf. Examples of
out-of-pocket expenses include but are not limited to microfiche,
disaster recovery, pricing services, overnight mailing services,
FDIC insurance, foreign registration and script fees, etc. IFTC
bills out-of-pocket expenses separately from service fees.
C. The fees stated above are exclusive of terminal equipment
required in the client's location(s) and communication line
costs.
D. Any fees or out-of-pocket expenses not paid within 30 days of the
date of the original invoice will be charged a late payment fee
of 1% per month until payment of the fees are received by IFTC.
E. The above fee schedule is applicable for selections made and
communicated within 90 days of the date of this proposal. The
fees are guaranteed for a three year period commencing on the
effective date of the service agreement between IFTC and the
client. All changes to the fee schedule will be communicated in
writing at least 60 days prior to their effective date.
F. Overdrafts will be calculated at the Prime rate (as published in
the Wall Street Journal) and charged on a daily basis.
/s/ Xxxxxx X. Xxxxxx (lc) /s/ Xxxxx X. Xxxxxx, CFO
---------------------------------- ----------------------------------
Investors Fiduciary Trust Company Composite Group of Funds
1/1/96 January 1, 1996
-------------------------- -----------------------------
Date Date
November 30, 1995 Page 2 of 2
Appendix I
Xxxxxxx Xxxxx (Composite 9/95)
Global Custody Fees
I. Country Based Charges:
Market Asset Transaction Market Asset Transaction
Charge Charge Charge Charge
Argentina 40 $120 Malaysia 15 $20
Australia 15 $20 Mauritius 40 $120
Austria 14 $20 Mexico 15 $20
Bangladesh 40 $120 Morocco 40 $120
Belgium 15 $20 Namibia 40 $20
Belize 40 $120 Netherlands 15 $20
Botswana 40 $120 New Zealand 15 $20
Brazil 40 $120 Norway 15 $20
Canada 15 $20 Pakistan 40 $120
Euroclear 5 $25 Xxxx 00 x000
Xxxxx 40 $120 Philippines 15 $120
Colombia 40 $120 Xxxxxx 00 x000
Xxxxx Xxxxxxxx 40 $120 Portugal 15 $120
Denmark 15 $20 Shanghai (China) 35 $120
Egypt 40 $120 Shenzhen (China) 35 $120
ECU* 15 $20 Singapore 15 $20
Finland 15 $20 South Africa 15 $20
France 15 $20 South Korea 40 $120
Germany 15 $20 Spain 15 $20
Ghana 40 $120 Sri Lanka 35 $120
Greece 40 $120 Swaziland 40 $120
Hong Kong 15 $20 Sweden 15 $20
Hungary 40 $120 Switzerland 15 $20
India 40 $120 Taiwan 35 $120
Indonesia 15 $120 Thailand 15 $20
Ireland 15 $20 Turkey 40 $120
Israel 40 $120 United Kingdom 15 $20
Italy 15 $20 Uruguay 40 $120
Japan 10 $20 Venezuela 40 $120
Jordan 45 $120 Zimbabwe 40 $120
Luxembourg 15 $20
NOTE: Any country not listed above will be negotiated at time of investment.
Out of Pocket Expenses: As incurred (e.g. stamp taxes, registration costs,
script fees, special transportation costs, etc.). *ECU = European Currency Unit
