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CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT dated July 23, 1986, between IDS Selective Fund, Inc.,
a Minnesota Corporation (hereinafter also called the "Corporation") and First
National Bank of Minneapolis, a corporation organized under the laws of the
United States of America with its principal place of business at Minneapolis,
Minnesota (hereinafter also called the "Custodian").
WHEREAS, the Corporation desires that its securities and cash be hereafter held
and administered by Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Corporation and the Custodian agree as follows:
Section l. Definitions
The word "securities" as used herein shall be construed to include, without
being limited to, shares, stocks, treasury stocks, including any stocks of this
Corporation, notes, bonds, debentures, evidences of indebtedness, options to buy
or sell stocks or stock indexes, certificates of interest or participation in
any profit-sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts, voting
trust certificates, certificates of deposit for a security, fractional or
undivided interests in oil, gas or other mineral rights, or any certificates of
interest or participation in, temporary or interim certificates for, receipts
for, guarantees of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of any right or
interest in or to any cash, property or assets and any interest or instrument
commonly known as a security. In addition, for the purpose of this Agreement,
the word "securities" also shall include other instruments in which the
Corporation may invest including currency forward contracts and commodities such
as interest rate or index futures contracts, margin deposits on such contracts
or options on such contracts.
The words "custodian order" shall mean a request or direction, including a
computer printout, directed to the Custodian and signed in the name of the
Corporation by any two individuals designated in the current certified list
referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.
Section 2. Names, Titles and Signatures of Authorized Persons
The Corporation will certify to the Custodian the names and signatures of its
present officers and other designated persons authorized on behalf of the
Corporation to direct the Custodian by custodian order as hereinbefore defined.
The Corporation agrees that whenever any change occurs in this list it will file
with the Custodian a copy of a resolution certified by the Secretary or an
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Assistant Secretary of the Corporation as having been duly adopted by the Board
of Directors or the Executive Committee of the Board of Directors of the
Corporation designating those persons currently authorized on behalf of the
Corporation to direct the Custodian by custodian order, as hereinbefore defined,
and upon such filing (to be accompanied by the filing of specimen signatures of
the designated persons) the persons so designated in said resolution shall
constitute the current certified list. The Custodian is authorized to rely and
act upon the names and signatures of the individuals as they appear in the most
recent certified list from the Corporation which has been delivered to the
Custodian as hereinabove provided.
Section 3. Use of Subcustodians
The Custodian may make arrangements, where appropriate, with other banks having
not less than two million dollars aggregate capital, surplus and undivided
profits for the custody of securities and cash.
The Custodian also may enter into arrangements for the custody of "Foreign
Securities" and cash entrusted to its care through "Eligible Foreign Custodian,"
as those terms are defined by Rule 17f-5 under the Investment Company Act of
1940 (the "Act"), or such other entity as permitted by the Securities and
Exchange Commission (the "SEC") (such Eligible Foreign Custodians, collectively,
"Foreign Custodial Agents") provided, if required by the SEC, that the Board has
given its prior approval to the use of, and Custodian's contract with, each
Foreign Custodial Agent by resolution, and a certified copy of such resolution
has been provided to the Custodian. To the extent the provisions of this
Agreement are consistent with the requirements of the Act, rules, orders or
no-action letters of the SEC, they shall apply to all such foreign
custodianships. To the extent such provisions are inconsistent with or
additional requirements are established by the Act or such rules, orders or
no-action letters, the requirements of the Act or such rules, orders or
no-action letters will prevail and the parties will adhere to such requirements;
provided, however, in the absence of notification from the Corporation of any
changes or additions to such requirements, the Custodian shall have no duty or
responsibility to inquire as to any such changes or additions.
All subcustodians of the Custodian (such subcustodians, collectively, the
"Subcustodians"), including all Foreign Custodial Agents, shall be subject to
the instructions of the Custodian and not to those of the Corporation and shall
act solely as agent of the Custodian.
Section 4. Receipt and Disbursement of Money
(1) The Custodian shall open and maintain a separate account or accounts in the
name of the Corporation and cause any Subcustodians to open and maintain such
account or accounts, subject only to checks, drafts or directives by the
Custodian or such Subcustodian pursuant to the terms of this Agreement. The
Custodian or such Subcustodian shall hold in such account or accounts, subject
to the
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provisions hereof, all cash received by it from or for the account of the
Corporation. The Custodian or such Subcustodian shall make payments of cash to
or for the account of the Corporation from such cash only:
(a) for the purchase of securities for the portfolio of the
Corporation upon the receipt of such securities by the
Custodian or such Subcustodian;
(b) for the purchase or redemption of shares of capital stock
of the Corporation;
(c) for the payment of interest, dividends, taxes, management fees, or
operating expenses (including, without limitation thereto, fees for
legal, accounting and auditing services);
(d) for payment of distribution fees, commissions, or
redemption fees, if any;
(e) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the
Corporation held by or to be delivered to the Custodian;
(f) for payments in connection with the return of securities loaned by the
Corporation upon receipt of such securities or the reduction of
collateral upon receipt of proper notice;
(g) for payments for other proper corporate purposes; or
(h) upon the termination of this Agreement.
Before making any such payment for the purposes permitted under the terms of
items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1) of this section, the
Custodian shall receive and may rely upon a custodian order directing such
payment and stating that the payment is for such a purpose permitted under these
items (a), (b), (c), (d), (e), (f) or (g) and that in respect to item (g), a
copy of a resolution of the Board of Directors or of the Executive Committee of
the Board of Directors of the Corporation signed by an officer of the
Corporation and certified by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose to be a proper corporate
purpose, and naming the person or persons to whom such payment is made.
Notwithstanding the above, for the purposes permitted under items (a) or (f) of
paragraph (1) of this section, the Custodian may rely upon a facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of the Corporation to
endorse and collect all checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Corporation and drawn on or to
the order of the Corporation and to deposit same to the account of the
Corporation pursuant to this Agreement.
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(3) Subject to the prior authorization provisions of Section 3 of this
Agreement, the Corporation authorizes the Custodian to establish and maintain in
each country or other jurisdiction in which the principal trading market for any
Foreign Securities is located, or in which any Foreign Securities are to be
presented for payment, an account or accounts which may include nostro accounts
with Custodian branches and omnibus accounts of Custodian at Foreign Custodial
Agents for receipt of cash in such currencies as directed by custodian order.
For purposes of this Agreement, cash so held in any such account shall be
evidenced by separate book entries maintained by Custodian and shall be deemed
to be cash held by Custodian. Cash received or credited by Custodian or any
Custodian branch or any Foreign Custodial Agent in a currency other than United
States dollars shall be maintained in such currency and shall not be converted
or remitted except in accordance with the custodian order, except as permitted
by Section 7.
Section 5. Receipt of Securities
Except as permitted by the second paragraph of this section, the Custodian
shall, and shall cause any Subcustodians to, hold in a separate account or
accounts, and physically segregated at all times from those of any other
persons, firms or corporations, pursuant to the provisions hereof, all
securities and cash received for the account of the Corporation. The Custodian
shall, and shall cause any Subcustodians to, record and maintain a record of all
certificate numbers. Securities so received shall be held in the name of the
Corporation, in the name of an exclusive nominee duly appointed by the Custodian
or such Subcustodian, or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the SEC may adopt, the
Custodian may deposit all or any part of the securities owned by the Corporation
in a securities depository which includes any system for the central handling of
securities established by a national securities exchange or a national
securities association registered with the SEC under the Securities Exchange Act
of 1934, or such other person as may be permitted by the SEC, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities.
All securities are to be held or disposed of by the Custodian for, and subject
at all times to the instructions of, the Corporation pursuant to the terms of
this Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities, except pursuant
to the directive of the Corporation and only for the account of the Corporation
as set forth in Section 6 of this Agreement.
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Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any securities of the
Corporation held by it pursuant to this Agreement. The Custodian agrees to
transfer, exchange or deliver securities held by it or any Subcustodian only:
(a) for sales of such securities for the account of the
Corporation, upon receipt of payment therefor;
(b) when such securities are called, redeemed, retired or
otherwise become payable;
(c) for examination upon the sale of any such securities in accordance with
"street delivery" custom which would include delivery against interim
receipts or other proper delivery receipts;
(d) in exchange for or upon conversion into other securities alone or other
securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
(e) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(f) upon conversion of such securities pursuant to their terms
into other securities;
(g) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(h) for loans of such securities by the Corporation upon receipt
of collateral; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a), (b), (c), (d),
(e), (f), (g) and (h), securities or cash received in exchange therefore shall
be delivered to the Custodian, a Subcustodian, or to a securities depository.
Before making any such transfer, exchange or delivery, the Custodian shall
receive a custodian order or a facsimile from the Corporation requesting such
transfer, exchange or delivery and stating that it is for a purpose permitted
under this section (whenever a facsimile is utilized, the Corporation will also
deliver an original signed custodian order) and, in respect to item (i), a copy
of a resolution of the Board of Directors or of the Executive Committee of the
Board of Directors of the Corporation signed by an officer of the Corporation
and certified by its Secretary or an Assistant Secretary, specifying the
securities, setting forth the purpose for which such payment, transfer, exchange
or delivery is to be made, declaring such
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purpose to be a proper corporate purpose, and naming the person or persons to
whom such transfer, exchange or delivery of such securities shall be made.
Section 7. Custodian's Acts Without Instructions
Unless and until the Custodian receives a contrary custodian order from the
Corporation, the Custodian shall or shall cause a Subcustodian to:
(a) present for payment all coupons and other income items held by the
Custodian or such Subcustodian for the account of the Corporation which
call for payment upon presentation and hold all cash received by it upon
such payment for the account of the Corporation;
(b) present for payment all securities held by it or such
Subcustodian which mature or when called, redeemed, retired or
otherwise become payable;
(c) ascertain all stock dividends, rights and similar securities
to be issued with respect to any securities other than Foreign
Securities;
(d) collect and hold for the account of the Corporation all stock
dividends, rights and similar securities issued with respect
to any securities;
(e) ascertain all interest and cash dividends to be paid to
security holders with respect to any securities other than
Foreign Securities;
(f) collect and hold all interest and cash dividends for the
account of the Corporation;
(g) present for exchange securities converted pursuant to their
terms into other securities;
(h) exchange interim receipts or temporary securities for
definitive securities;
(i) execute in the name of the Corporation such ownership and other
certificates as may be required to obtain payments in respect thereto,
provided that the Corporation shall have furnished to the Custodian or
such Subcustodian any information necessary in connection with such
certificates; and
(j) convert interest and dividends received with respect to Foreign
Securities into United States dollars whenever it is practicable to do
so through customary banking channels, including the Custodian's own
banking facilities.
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Section 8. Settlement Procedures
Settlement procedures for transactions in Foreign Securities, including receipts
and payments of cash held in any nostro account or omnibus account, shall be
carried out in accordance with instructions in the operational manual provided
by the Custodian (the "Operational Manual"). It is understood that such
settlement procedures may vary, as provided in the Operational Manual, from
securities market to securities market, to reflect particular settlement
practices in such markets.
With respect to any transaction involving Foreign Securities, the Custodian or
any Subcustodian in its discretion may cause the Corporation to be credited on
the contractual settlement date with proceeds of any sale or exchange of Foreign
Securities and to be debited on the contractual settlement date for the cost of
Foreign Securities purchased or acquired. The Custodian may reverse any such
credit or debit if the transaction with respect to which such credit or debit
was made fails to settle within a reasonable period, determined by the Custodian
in its discretion, after the contractual settlement date except that if any
Foreign Securities delivered pursuant to this section are returned by the
recipient thereof, the Custodian may cause any such credits and debits to be
reversed at any time. With respect to any transactions as to which the Custodian
does not determine so to credit or debit the Corporation, the proceeds from the
sale or exchange of Foreign Securities will be credited and the cost of such
Foreign Securities purchased or acquired will be debited on the date such
proceeds or Foreign Securities are received by the Custodian.
Notwithstanding the preceding paragraph, settlement, payment and delivery for
Foreign Securities may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering Foreign Securities to the purchaser thereof or to
a dealer therefor against a receipt with the exception of receiving later
payment for such Foreign Securities from such purchaser or dealer.
Section 9. Records
The Custodian hereby agrees that it shall create, maintain, and retain all
records relating to its activities and obligations under this Agreement in such
manner as will meet their obligations under this Agreement and the obligations
of the Corporation under the Act, particularly Section 31 thereof and Rules
31a-1 and 31a-2 thereunder and Section 17(f) thereof and the rules thereunder,
and applicable federal, state and foreign tax laws and other laws or
administrative rules or procedures, in each case as currently in effect, which
may be applicable to the Corporation. All records so maintained in connection
with the performance of its duties under this Agreement shall remain the
property of the Corporation and, in
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the event of termination of this Agreement, shall be delivered in accordance
with the provisions of this Agreement.
(a) With respect to securities and cash held by the Custodian's branches,
such securities and cash may be placed in an omnibus account for the
customers of the Custodian, and the Custodian shall maintain separate
book entry records for each such omnibus account.
(b) With respect to securities and cash deposited by the Custodian with a
Foreign Custodial Agent, the Custodian shall indemnify on its books as
belonging to the Corporation the securities and cash shown on the
Custodian's account on the books of such Foreign Custodial Agent.
(c) With respect to securities and cash deposited with a
securities depository or clearing agency, incorporated or
organized under the laws of a country other than the United
States, which operates the central system for handling of
securities or equivalent book-entries in that country or which
operates a transnational system for the central handling or
securities or equivalent book-entries (on "Eligible Foreign
Securities Depository"), the Custodian shall cause the
securities and cash shown on the account on the books of the
Eligible Foreign Securities Depository to be identified as
belonging to the Custodian as agent for the Corporation.
The Custodian hereby agrees that the books and records of the Custodian
(including any Custodian branch) pertaining to its actions under this Agreement
shall be open to the physical, on- premises inspection and audit by the
independent accountant (the "Accountant") employed by, or other representatives
of, the Corporation, and, upon the request of the Accountant, confirmation of
the contents of those records shall be provided by the Custodian. The Custodian
shall use its best efforts to cause any Foreign Custodial Agent to afford access
to the Accountant to the books and records of such Foreign Custodial Agent with
respect to securities and cash held by such Foreign Custodial Agent for the
Corporation. the Custodian also agrees to furnish the Accountant with such
reports of the Custodian's (including any Custodian branches') auditors as they
relate to the services provided under this Agreement and as are necessary for
the Accountant to conduct its examination of the books and records pertaining to
affairs of the Corporation, and the Custodian shall use its best efforts to
obtain and furnish similar reports of any Foreign Custodial Agent holding
securities and cash for the Corporation.
Section 10. Registration of Securities
Securities which are ordinarily held in registered form may be
registered in the name of the Custodian's nominee or, as to any
securities in the physical possession of an entity other than the
Custodian, in the name of such entity's nominee. The Corporation
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agrees to hold any such nominee harmless from any liability as a holder of
record of such securities. The Custodian may without notice to the Corporation
cause any such securities to cease to be registered in the name of any such
nominee and to be registered in the name of the Corporation. In the event that
any security registered in the name of the Custodian's nominee or held by any
Subcustodians and registered in the name of such Subcustodian's nominee is
called for partial redemption by the issuer of such security, the Custodian may
allot, or cause to be allotted, the called portion to the respective beneficial
holders of such class of security in any manner the Custodian deems to be fair
and equitable.
Section 11. Transfer Taxes
The Corporation shall pay or reimburse the Custodian and any Subcustodian for
any transfer taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this Agreement. The
Custodian shall, and shall use its best efforts to cause any Subcustodian to,
execute such certificates in connection with securities delivered to it under
this Agreement as may be required, under any applicable law or regulation, to
exempt from taxation any transfers and/or deliveries of any such securities
which may be entitled to such exemption.
Section 12. Voting and Other Action
Neither the Custodian or any Subcustodian nor any nominee of the Custodian or
such Subcustodian shall vote any of the securities held hereunder by or for the
account of the Corporation. The Custodian shall, and shall use its best efforts
to cause any Subcustodian to, promptly deliver to the Corporation all notices,
proxies and proxy soliciting materials with relation to such securities, such
proxies to be executed by the registered holder of such securities (if
registered otherwise than in the name of the Corporation), but without
indicating the manner in which such proxies are to be voted.
The Custodian shall, and shall use its best efforts to cause any Subcustodian
to, transmit promptly to the Corporation all written information (including,
without limitation, pendency of calls and maturities of securities and
expirations of rights in connection therewith) received by the Custodian or such
Subcustodian from issuers of the securities being held for the Corporation. With
respect to tender or exchange offers, the Custodian shall, and shall use its
best efforts to cause any Subcustodian to, transmit promptly to the Corporation
all written information received by the Custodian or such Subcustodian from
issuers of the securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer.
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Section 13. Custodian's Reports
The Custodian shall furnish the Corporation as of the close of business each day
a statement showing all transactions and entries for the account of the
Corporation. The books and records of the Custodian pertaining to its actions as
Custodian under this Agreement and securities held hereunder by the Custodian
shall be open to inspection and audit by officers of the Corporation, internal
auditors employed by the Corporation's investment adviser, and independent
auditors employed by the Corporation. The Custodian shall furnish the
Corporation in such form as may reasonably be requested by the Corporation a
report, including a list of the securities held by it in custody for the account
of the Corporation, identification of any subcustodian, and identification of
such securities held by such subcustodian, as of the close of business of the
last business day of each month, which shall be certified by a duly authorized
officer of the Custodian. It is further understood that additional reports may
from time to time be requested by the Corporation. Should any report ever be
filed with any governmental authority pertaining to lost or stolen securities,
the Custodian will concurrently provide the Corporation with a copy of that
report.
The Custodian also shall furnish such reports on its systems of internal
accounting control as the Corporation may reasonably request from time to time.
Section 14. Security Interest, Liens and Transfers of Beneficial
Ownership
The securities and cash held by the Custodian hereunder shall not be subject to
any right, change, security interest, lien or claim of any kind in favor of the
Custodian or its creditors, except a claim of payment for their safe custody or
administration, and beneficial ownership of such securities and cash shall be
freely transferable without the payment of money or value other than for safe
custody or administration. Any agreement the Custodian shall enter into with any
Subcustodian, including any Foreign Custodial Agent, shall contain a provision
which is substantially identical to the foregoing.
In the event that there shall be asserted any attachment or lien on or against
any securities or cash held in any omnibus account or nostro account referred to
in this Agreement which results from any claim against the Custodian (including
any branch) or any such account, which is not directly related to transactions
in securities or cash for the Corporation, the Custodian will use its best
efforts promptly to discharge such attachment or lien. If the Custodian shall
not have discharged such attachment or lien within five business days, it shall
notify the Corporation of the existence of the attachment or lien. If the
attachment or lien is not discharged on the date required for delivery or
payment with respect to any securities or cash in accordance with the provisions
of the Operation Manual:
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(a) in the case of such securities, at the option of the
Corporation, the Custodian shall either immediately transfer
to the Corporation a like amount of such securities (provided
the same shall be reasonably available) or immediately
transfer an amount in United States dollars equal to the
market value of such securities, valued in accordance with
such procedures as may be mutually agreed to by the parties
thereto;
(b) in the case of cash, the Custodian shall immediately transfer to the
Corporation an equal amount of cash in United States dollars.
Section 15. Compensation
For its services hereunder the Custodian shall be paid such compensation and
out-of-pocket or incidental expenses at such times as may from time to time be
agreed on in writing by the parties hereto in a Custodian Fee Agreement.
Section 16. Standard of Care
The Custodian shall not be liable for any action taken in good faith upon any
custodian order or facsimile herein described or certified copy of any
resolution of the Board of Directors or of the Executive Committee of the Board
of Directors of the Corporation, and may rely on the genuineness of any such
document which it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless the Custodian, any
Subcustodian, or any nominee thereof from all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees) incurred or
assessed against any such entity in connection with the performance of this
Agreement, except such as may arise from such entity's own negligent action,
negligent failure to act or willful misconduct. The Custodian is authorized to
charge any account of the Corporation for such items. In the event of any
advance of cash for any purpose made by the Custodian resulting from orders or
instructions of the Corporation, or in the event that the Custodian or any
nominee thereof shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement, except such as may arise from such entity's own negligent action,
negligent failure to act or willful misconduct, any property at any time held
for the account of the Corporation shall be security therefor.
The Custodian shall maintain a standard of care equivalent to that which would
be required of a bailee for hire and shall not be liable for any loss or damage
to the Corporation resulting from participation in a securities depository
unless such loss or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or from its
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failure to enforce effectively such rights as it may have against any securities
depository or from use of a Subcustodian, unless such loss or damage arises by
reason of any negligence, mis- feasance, or willful misconduct of officers or
employees of the Custodian, or from its failure to enforce effectively such
rights as it may have against such Subcustodian. Anything in the foregoing to
the contrary notwithstanding, the Custodian shall exercise, in the performance
of its obligations undertaken or reasonably assumed with respect to this
Agreement, including the recommendation to the Board of Foreign Custodial
Agents, reasonable care, for which the Custodian shall be responsible to the
same extent as if it were performing such duties directly and holding such
securities and cash in Minnesota, United States of America. The Custodian shall
be indemnified and held harmless by the Corporation from and against any loss or
liability for any action taken or omitted to be taken hereunder in good faith
upon custodian order and may rely on the genuineness of all such orders and
documents as it in good faith believes to have been validly executed. The
Custodian shall be responsible for the securities and cash held by or deposited
with any Subcustodian to the same extent as if such securities and cash were
directly held by or deposited with the Custodian. The Custodian hereby agrees
that it shall indemnify and hold the Corporation harmless from and against any
loss which shall occur as a result of the failure of a foreign Custodial Agent
holding the securities and cash to exercise reasonable care with respect to the
safekeeping of such securities and cash to the extent that the Custodian would
be required to indemnify and hold the Corporation harmless if the Custodian were
itself holding such securities and cash in Minnesota. It is also understood that
the Custodian shall not have liability for loss except by reason of the
Custodian's negligence, fraud or willful misconduct, or by reason of negligence,
fraud or willful misconduct of any Subcustodian holding such securities or cash
for the Corporation.
The Custodian warrants that the established procedures to be followed by any
Subcustodian, in the opinion of the Custodian after due inquiry, afford
protection for such securities and cash at least equal to that afforded by the
Custodian's established procedures with respect to similar securities and cash
held by the Custodian (including its securities depositories) in Minnesota.
However, the Custodian shall have no liability for any loss or liability
occasioned by delay in the actual receipt by it or any Subcustodian of notice of
any payment, redemption, or other transaction regarding securities unless such
delay is a result of its own negligence, fraud, or willful misconduct.
The Custodian shall not be responsible for any loss of the Corporation, or to
take any action with respect to any attachment or lien on any omnibus account or
nostro account, except as provided in Section 14 of this Agreement, in such
loss, attachment or lien arises by reason of any cause or circumstances beyond
the control of the Custodian, including acts of civil or military
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authority, expropriation, national emergency, acts of God, insurrection, war,
riots, or failure of transportation, communication or power supply, or the
failure of any person, firm or corporation (other than the Custodian or any
Subcustodian acting on behalf of the Custodian) to perform any obligation if
such failure results in any such loss.
Section 17. Insurance
The Custodian represents and warrants that it presently maintains and shall
maintain for the duration of this Agreement a bankers' blanket bond (the "Bond")
which provides standard fidelity and non- negligent loss coverage with respect
to securities and cash which may be held by the Custodian and securities and
cash which may be held by any Subcustodian which may be utilized by the
Custodian pursuant to this Agreement. The Custodian agrees that, if at any time
the Custodian for any reason discontinues such coverage, it shall immediately
notify the Corporation in writing. The Custodian represents that only the named
insured on the Bond, which includes the Custodian but not any of its customers,
is directly protected against loss. The Custodian represents that while it might
resist a claim of one of its customers to recover for a loss not covered by the
Bond, as a practical matter, where a claim is brought and a loss is possibly
covered by the Bond, the Custodian would give notice of the claim to its
insurer, and the insurer would normally determine whether to defend the claim
against the Custodian or to pay the claim on behalf of the Custodian.
The Custodian also represents that it does not intend to obtain any insurance
for the benefit of the Corporation which protects against the imposition of the
proceeds of sale of any securities or against confiscation, expropriation or
nationalization of any securities or the assets of the issuer of such securities
by a government or any foreign country in which the issuer of such securities is
organized or in which securities are held for safekeeping either by the
Custodian or any Subcustodian in such country. The Custodian represents that it
has discussed the availability of expropriation insurance with the Corporation.
The Custodian also represents that it has advised the Corporation as to its
understanding of the position of the Staff of the SEC that any investment
company investing in securities of foreign issuers has the responsibility for
reviewing the possibility of the imposition of exchange control restrictions
which would affect the liquidity of such investment company's assets and the
possibility of exposure to political risk, including the appropriateness of
insuring against such risk. The Custodian represents that the Corporation has
acknowledged that it has the responsibility to review the possibility of such
risks and what, if any, action should be taken.
PAGE 14
Section 18. Termination and Amendment of Agreement
The Corporation and the Custodian mutually may agree from time to time in
writing to amend, to add to, or to delete from any provision of this Agreement.
The Custodian may terminate this Agreement by giving the Corporation ninety
days' written notice of such termination by registered mail addressed to the
Corporation at its principal place of business.
The Corporation may terminate this Agreement at any time by written notice
thereof delivered, together with a copy of the resolution of the Board of
Directors authorizing such termination and certified by the Secretary of the
Corporation, by registered mail to the Custodian.
Upon such termination of this Agreement, assets of the Corporation held by the
Custodian shall be delivered by the Custodian to a successor custodian, if one
has been appointed by the Corporation, upon receipt by the Custodian of a copy
of the resolution of the Board of Directors of the Corporation certified by the
Secretary, showing appointment of the successor custodian, and provided that
such successor custodian is a bank or trust company, organized under the laws of
the United States or of any State of the United States, having not less than two
million dollars aggregate capital, surplus and undivided profits. Upon the
termination of this Agreement as a part of the transfer of assets, either to a
successor custodian or otherwise, the Custodian will deliver securities held by
it hereunder, when so authorized and directed by resolution of the Board of
Directors of the Corporation, to a duly appointed agent of the successor
custodian or to the appropriate transfer agents for transfer of registration and
delivery as directed. Delivery of assets on termination of this Agreement shall
be effected in a reasonable, expeditious and orderly manner; and in order to
accomplish an orderly transition from the Custodian to the successor custodian,
the Custodian shall continue to act as such under this Agreement as to assets in
its possession or control. Termination as to each security shall become
effective upon delivery to the successor custodian, its agent, or to a transfer
agent for a specific security for the account of the successor custodian, and
such delivery shall constitute effective delivery by the Custodian to the
successor under this Agreement.
In addition to the means of termination hereinbefore authorized, this Agreement
may be terminated at any time by the vote of a majority of the outstanding
shares of the Corporation and after written notice of such action to the
Custodian.
Section 19. General
Nothing expressed or mentioned in or to be implied from any provision of this
Agreement is intended to, or shall be construed to give any person or
corporation other than the parties hereto, any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and
PAGE 15
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns.
This Agreement shall be governed by the laws of the State of Minnesota.
Attest: IDS SELECTIVE FUND, INC.
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxx
Xxxxxxx X. Xxxxxx Xxxxxx X. Xxx
Secretary Vice President
FIRST NATIONAL BANK OF MINNEAPOLIS
By /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
By ________________________________
