CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into this 10 day of November, 2005,
by and between each corporation and business trust listed on Exhibit A (the"
"Registrant"), on behalf of each series of stock it issues that is shown on
Exhibit A, each of which is a separate mutual fund ( the "Fund") and U.S. BANK
NATIONAL ASSOCIATION, a national banking association organized and existing
under the laws of the United States of America with its principal place of
business at Cincinnati, Ohio (the "Custodian").
WHEREAS, the Registrant is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company, and is authorized to issue shares of beneficial interest in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets, and is referred to herein as the Fund;
WHEREAS, the Custodian is a bank having the qualifications prescribed
in Section 26(a)(1) of the 1940 Act;
WHEREAS, the Registrant desires to retain the Custodian to act as
custodian of the cash and securities of each Fund; and
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
Article I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings set forth below unless the context otherwise requires:
1.1 "Authorized Person" means any Officer or other person duly authorized
by resolution of the Board to give Oral Instructions and Written
Instructions on behalf of the Fund and named in such resolutions of the
Board, certified by an Officer, as may be received by the Custodian
from time to time.
1.2 "Board" shall mean the directors or trustees from time to time serving
under the corporation's articles of incorporation or the trust's
declaration of trust, as amended from time to time.
1.3 "Book-Entry System" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of
31 CFR Part 350, or in such book-entry regulations of federal agencies
as are substantially in the form of such Subpart O.
1.4 "Business Day" shall mean any day recognized as a settlement day by The
New York Stock Exchange, Inc., and any other day for which the Fund
computes its net asset value.
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1.5 "Eligible Securities Depository" shall mean a system for the central
handling of securities as that term is defined in Rule 17f-4 and 17f-7
under the 1940 Act.
1.6 "Fund Custody Account" shall mean any of the accounts in the name of
the Fund, which is provided for in Section 3.2 below.
1.7 "IRS" shall mean the Internal Revenue Service.
1.8 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.9 "Officer" shall mean the, President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer,
or any Assistant Treasurer of the Trust.
1.10 "Oral Instructions" shall mean instructions orally transmitted to and
accepted by the Custodian because such instructions are: (i) reasonably
believed by the Custodian to have been given by any Authorized Persons,
(ii) recorded and kept among the records of the Custodian made in the
ordinary course of business, and (iii) orally confirmed by the
Custodian. All Oral Instructions shall be confirmed by Written
Instructions prior to the end of the next Business Day. If such Written
Instructions confirming Oral Instructions are not received by the
Custodian prior to a transaction, it shall in no way affect the
validity of the transaction or the authorization thereof. If Oral
Instructions vary from the Written Instructions that purport to confirm
them, the Custodian shall notify the Fund of such variance but such
Oral Instructions will govern unless the Custodian has not yet acted.
1.11 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.12 "SEC" shall mean the Securities and Exchange Commission.
1.13 "Securities" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed
securities or other obligations, and any certificates, receipts,
warrants or other instruments or documents representing rights to
receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or any similar
property or assets that the Custodian or its agents have the facilities
to clear and service, including but not limited to, currency forward
contracts and commodities such as interest rate or index futures
contracts, margin deposits on such contracts, and options on such
contracts.
1.14 "Securities Depository" shall mean The Depository Trust Company and any
other clearing agency registered with the SEC under Section 17A of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), which
acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited
within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of the
Securities.
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1.15 "Shares" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Registrant on account of the Fund.
1.16 "Sub-Custodian" shall mean and include (i) any branch of a "U.S. bank,"
as that term is defined in Rule 17f-5 under the 1940 Act, and (ii) any
"eligible foreign custodian," as that term is defined in Rule 17f-5
under the 1940 Act, having a contract with the Custodian which the
Custodian has determined will provide reasonable care of assets of the
Fund based on the standards specified in Section 3.3 below. Such
contract shall be in writing and shall include provisions that provide:
(i) for indemnification or insurance arrangements (or any combination
of the foregoing) such that the Fund will be adequately protected
against the risk of loss of assets held in accordance with such
contract; (ii) that the Fund's assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Sub-Custodian or its creditors except a claim of payment for their safe
custody or administration, in the case of cash deposits, liens or
rights in favor of creditors of the Sub-Custodian arising under
bankruptcy, insolvency, or similar laws; (iii) that beneficial
ownership for the Fund's assets will be freely transferable without the
payment of money or value other than for safe custody or
administration; (iv) that adequate records will be maintained
identifying the assets as belonging to the Fund or as being held by a
third party for the benefit of the Fund; (v) that the Fund's
independent public accountants will be given access to those records or
confirmation of the contents of those records; and (vi) that the Fund
will receive periodic reports with respect to the safekeeping of the
Fund's assets, including, but not limited to, notification of any
transfer to or from a Fund's account or a third party account
containing assets held for the benefit of the Fund. Such contract may
contain, in lieu of any or all of the provisions specified in (i)-(vi)
above, such other provisions that the Custodian determines will
provide, in their entirety, the same or a greater level of care and
protection for Fund assets as the specified provisions.
1.17 "Written Instructions" shall mean (i) written communications actually
received by the Custodian and signed by any Authorized Persons, (ii)
communications by telex or any other such system from one or more
persons reasonably believed by the Custodian to be Authorized Persons,
or (iii) communications between electro-mechanical or electronic
devices provided that the use of such devices and the procedures for
the use thereof shall have been approved by an Officer of the Fund and
the Custodian.
Article II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Registrant hereby appoints the Custodian as custodian
of all Securities and cash owned by or in the possession of the Fund at
any time during the period of this Agreement, on the terms and
conditions set forth in this Agreement, and the Custodian hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement. The services and duties of the Custodian
shall be confined to those matters expressly set forth
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herein, and no implied duties are assumed by or may be asserted against
the Custodian hereunder. herein, and no implied duties are assumed by
or may be asserted against the Custodian hereunder.
2.2 Documents to be Furnished. The following documents, including any
amendments thereto, will be provided contemporaneously with the
execution of the Agreement to the Custodian by the Registrant:
(a) A copy of the Registrant's articles of incorporation or
declaration of trust, certified by the Secretary;
(b) A copy of the Registrant's bylaws, certified by the Secretary;
(c) A copy of the resolution of the Board appointing the
Custodian, certified by the Secretary;
(d) A copy of the current prospectus of the Fund (the
"Prospectus");
(e) A copy of the resolution certified by the Secretary setting
forth the names and signatures of the Authorized Persons; and
(f) An executed authorization required by the Shareholder
Communications Act of 1985, attached hereto as Exhibit E.
2.3 Notice of Appointment of Transfer Agent. The Trust agrees to notify the
Custodian in writing of the appointment, termination or change in
appointment of any transfer agent of the Fund.
Article III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the Custodian
for the account of the Fund (other than Securities maintained in a
Securities Depository, Eligible Securities Depository or Book-Entry
System) shall be physically segregated from other Securities and
non-cash property in the possession of the Custodian (including the
Securities and non-cash property of the other series of the Registrant)
and shall be identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of the
Registrant coupled with the name of the Fund, subject only to draft or
order of the Custodian, in which the Custodian shall enter and carry
all Securities, cash and other assets of such Fund which are delivered
to it.
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3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to establish and maintain arrangements with (i)
Eligible Securities Depositories or (ii) members of the
Sub-Custodian's network to hold Securities and cash of the
Fund and to carry out such other provisions of this Agreement
as it may determine; provided, however, that the appointment
of any such agents and maintenance of any Securities and cash
of the Fund shall be at the Custodian's expense and shall not
relieve the Custodian of any of its obligations or liabilities
under this Agreement. The Custodian shall be liable for the
actions of any Sub-Custodians (regardless of whether assets
are maintained in the custody of a Sub-Custodian, a member of
its network or an Eligible Securities Depository) appointed by
it as if such actions had been done by the Custodian.
(b) If, after the initial approval of Sub-Custodians by the Board
in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of the Fund, it
will so notify the Registrant and provide it with information
reasonably necessary to determine any such new Sub-Custodian's
eligibility under Rule 17f-5 under the 1940 Act, including a
copy of the proposed agreement with such Sub-Custodian. At the
meeting of the Board of Trustees next following receipt of
such notice and information, the Trust shall give its written
approval or disapproval of the proposed action.
(c) The agreement between the Custodian and each Sub-Custodian
acting hereunder shall contain the required provisions set
forth in Rule 17f-5(c)(2) under the 1940 Act.
(d) At the end of each calendar quarter, the Custodian or
Sub-Custodian shall provide written reports notifying the Fund
of the placement of its Securities and cash with a
Sub-Custodian and of any material changes in the Fund's
arrangements. Such reports shall include an analysis of the
custody risks associated with maintaining assets with any
Eligible Securities Depositories. The Custodian shall promptly
take such steps as may be required to withdraw assets of the
Fund from any Sub-Custodian arrangement that has ceased to
meet the requirements of Rule 17f-5 or Rule 17f-7 under the
1940 Act, as applicable.
(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants that it agrees to exercise
reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of property of the
Fund. The Custodian further warrants that the Fund's assets
will be subject to reasonable care if maintained with a
Sub-Custodian, after considering all factors relevant to the
safekeeping of such assets, including, without limitation: (i)
the Sub-Custodian's practices, procedures, and internal
controls for certificated securities (if applicable), its
method of
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keeping custodial records, and its security and data
protection practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care for
Fund assets; (iii) the Sub-Custodian's general reputation
and standing and, in the case of a Securities Depository,
the Securities Depository's operating history and number of
participants; and (iv) whether the Fund will have
jurisdiction over and be able to enforce judgments against
the Sub-Custodian, such as by virtue of the existence of any
offices of the Sub-Custodian in the United States or the
Sub-Custodian's consent to service of process in the United
States.
(f) The Custodian shall establish a system or ensure that its
Sub-Custodian has established a system to monitor (i) the
appropriateness of maintaining the Fund's assets with a
Sub-Custodian or members of a Sub-Custodian's network; (ii)
the performance of the contract governing the Fund's
arrangements with such Sub-Custodian or members of a
Sub-Custodian's network; and (iii) the custody risks of
maintaining assets with an Eligible Securities Depository.
(g) The Custodian shall use reasonable commercial efforts to
collect all income and other payments with respect to foreign
Securities to which the Fund shall be entitled and shall
credit such income, as collected, to the Trust. In the event
that extraordinary measures are required to collect such
income, the Trust and Custodian shall consult as to the
measurers and as to the compensation and expenses of the
Custodian relating to such measures.
3.4 Delivery of Assets to Custodian. The Registrant shall deliver, or cause
to be delivered, to the Custodian all of the Fund's Securities, cash
and other investment assets, including (i) all payments of income,
payments of principal and capital distributions received by the Fund
with respect to such Securities, cash or other assets owned by the Fund
at any time during the period of this Agreement, and (ii) all cash
received by the Fund for the issuance of Shares. The Custodian shall
not be responsible for such Securities, cash or other assets until
actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of the Fund in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall make use of such
Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities.
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(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or
Securities Depository which includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for
customers.
(c) The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository 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 Fund. If Securities sold by the Fund are held in a
Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that payment
for such Securities has been transferred to the Depository
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 Fund.
(e) The Custodian shall provide the Fund with copies of any report
(obtained by the Custodian from a Book-Entry System or
Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be liable to the Fund for any loss or
damage to the Fund resulting from (i) the use of a Book-Entry
System or Securities Depository by reason of any negligence or
willful misconduct on the part of the Custodian or any
Sub-Custodian, or (ii) failure of the Custodian or any
Sub-Custodian to enforce effectively such rights as it may
have against a Book-Entry System or Securities Depository. At
its election, the Trust shall be subrogated to the rights of
the Custodian with respect to any claim against a Book-Entry
System or Securities Depository or any other person from any
loss or damage to the Fund arising from the use of such
Book-Entry System or Securities Depository, if and to the
extent that the Fund has not been made whole for any such loss
or damage.
(g) With respect to its responsibilities under this Section 3.5
and pursuant to Rule 17f-4 under the 1940 Act, the Custodian
hereby warrants that it agrees to (i) exercise due care in
accordance with reasonable commercial standards in discharging
its duty as a securities intermediary to obtain and thereafter
maintain such assets, (ii) provide, promptly upon request by
the Fund, such reports as are available concerning the
Custodian's internal accounting
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controls and financial strength, and (iii) require any
Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain
assets corresponding to the security entitlements of its
entitlement holders.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the Fund
Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities,
futures contracts and options on futures contracts), against
the delivery to the Custodian (or any Sub-Custodian) of such
Securities registered as provided in Section 3.9 below or in
proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set
forth in Section 3.5 above; (ii) in the case of options on
Securities, against delivery to the Custodian (or any
Sub-Custodian) of such receipts as are required by the customs
prevailing among dealers in such options; (iii) in the case of
futures contracts and options on futures contracts, against
delivery to the Custodian (or any Sub-Custodian) of evidence
of title thereto in favor of the Fund or any nominee referred
to in Section 3.9 below; and (iv) in the case of repurchase or
reverse repurchase agreements entered into between the Fund
and a bank which is a member of the Federal Reserve System or
between the Fund and a primary dealer in U.S. Government
securities, against delivery of the purchased Securities
either in certificate form or through an entry crediting the
Custodian's account at a Book-Entry System or Securities
Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of Securities owned by the
Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) For the payment of any expense or liability incurred by the
Fund, including, but not limited to, the following payments
for the account of the Fund: interest; taxes; administration,
investment advisory, accounting, auditing, transfer agent,
custodian, director and legal fees; and other operating
expenses of the Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated
as deferred expenses;
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(f) For transfer in accordance with the provisions of any
agreement among the Registrant, the Custodian and a
broker-dealer registered under the 1934 Act and a member of
the NASD, relating to compliance with rules of the Options
Clearing Corporation and of any registered national securities
exchange (or of any similar organization or organizations)
regarding escrow or other arrangements in connection with
transactions by the Fund;
(g) For transfer in accordance with the provisions of any
agreement among the Registrant, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term
of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of
the Board, certified by an Officer, specifying the amount and
purpose of such payment, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
such payment is to be made.
3.7 Delivery of Securities from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall release and deliver, or cause
the Sub-Custodian to release and deliver, Securities from the Fund
Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of the Fund but
only against receipt of payment therefore in cash, by
certified or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian, or any
nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of 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;
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(e) To the broker selling the Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or
pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefore pursuant to any repurchase
or reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of the
Fund, but only against receipt of such collateral as the Fund
shall have specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Registrant;
(l) For delivery in accordance with the provisions of any
agreement among the Registrant, the Custodian and a
broker-dealer registered under the 1934 Act and a member of
the NASD, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities
exchange (or of any similar organization or organizations)
regarding escrow or other arrangements in connection with
transactions by the Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Registrant, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund;
(n) For any other proper corporate purpose, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution
of the Board, certified by an Officer, specifying the
Securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper
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corporate purpose, and naming the person or persons to whom
delivery of such Securities shall be made; or
(o) To brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
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.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise instructed
by the Registrant, the Custodian shall with respect to all Securities
held for the Fund:
(a) Subject to Section 9.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled either
by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 9.4 below, collect
on a timely basis the amount payable upon all Securities which
may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or
the laws or regulations of any other taxing authority now or
hereafter in effect, and prepare and submit reports to the IRS
and the Registrant at such time, in such manner and containing
such information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar Securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other assets
of the Fund.
3.9 Registration and Transfer of Securities. All Securities held for the
Fund that are issued or issuable only in bearer form shall be held by
the Custodian in that form, provided that any such Securities shall be
held in a Book-Entry System if eligible therefore. All other Securities
held for the Fund may be registered in the name of the Fund, the
Custodian, a Sub-Custodian or any nominee thereof, or in the name of a
Book-Entry System, Securities Depository or any nominee of either
thereof.
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The records of the Custodian with respect to foreign securities of the
Fund that are maintained with a Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its
customers shall identify those securities as belonging to the Fund.
The Registrant shall furnish to the Custodian appropriate instruments
to enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of any of the nominees referred
to above or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of the Fund.
3.10 Records.
(a) The Custodian shall maintain complete and accurate records
with respect to Securities, cash or other property held for
the Fund, including (i) journals or other records of original
entry containing an itemized daily record in detail of all
receipts and deliveries of Securities and all receipts and
disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in
physical possession, (C) monies and Securities borrowed and
monies and Securities loaned (together with a record of the
collateral therefore and substitutions of such collateral),
(D) dividends and interest received, and (E) dividends
receivable and interest receivable; and (iii) canceled checks
and bank records related thereto. The Custodian shall keep
such other books and records of the Fund as the Registrant
shall reasonably request, or as may be required by the 1940
Act, including, but not limited to, Section 31 of the 1940 Act
and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall
(i) be maintained in a form acceptable to the Registrant and
in compliance with the rules and regulations of the SEC, (ii)
be the property of the Registrant and at all times during the
regular business hours of the Custodian be made available upon
request for inspection by duly authorized officers or agents
of the Registrant and employees or agents of the SEC, and
(iii) if required to be maintained by Rule 31a-1 under the
1940 Act, be preserved for the periods prescribed in Rules
31a-1 and 31a-2 under the 1940 Act.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Fund with a
daily activity statement and a summary of all transfers to or from the
Fund Custody Account on the day following such transfers. At least
monthly, the Custodian shall furnish the Fund with a detailed statement
of the Securities and moneys held by the Custodian and the
Sub-Custodians for the Fund under this Agreement.
3.12 Other Reports by Custodian. As the Registrant may reasonably request
from time to time, the Custodian shall provide the Registrant with
reports on the internal accounting controls and procedures for
safeguarding Securities which are employed by the Custodian or any
Sub-Custodian.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the Fund
to be promptly
- 12 -
executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such Securities. With respect to
the foreign Securities, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder
rights, subject to the laws, regulations and practical constraints
that may exist in the country where such securities are issued. The
Registrant acknowledges that local conditions, including lack of
regulation, onerous procedural obligations, lack of notice and other
factors may have the effect of severely limiting the ability of the
Fund to exercise shareholder rights.
3.14 Information on Corporate Actions. The Custodian shall promptly deliver
to the Fund all information received by the Custodian and pertaining to
Securities being held by the Fund with respect to optional tender or
exchange offers, calls for redemption or purchase, or expiration of
rights as described in the Standards of Service Guide attached as
Exhibit B. If the Fund desires to take action with respect to any
tender offer, exchange offer or other similar transaction, the Fund
shall notify the Custodian at least five Business Days prior to the
date on which the Custodian is to take such action. The Fund will
provide or cause to be provided to the Custodian all relevant
information for any Security which has unique put/option provisions at
least five Business Days prior to the beginning date of the tender
period.
Article IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities for
the Fund, Written Instructions shall be delivered to the Custodian,
specifying (i) the name of the issuer or writer of such Securities, and
the title or other description thereof, (ii) the number of shares,
principal amount (and accrued interest, if any) or other units
purchased, (iii) the date of purchase and settlement, (iv) the purchase
price per unit, (v) the total amount payable upon such purchase, and
(vi) the name of the person to whom such amount is payable. The
Custodian shall upon receipt of such Securities purchased by the Fund
pay out of the moneys held for the account of the Fund the total amount
specified in such Written Instructions to the person named therein. The
Custodian shall not be under any obligation to pay out moneys to cover
the cost of a purchase of Securities for the Fund, if in the Fund
Custody Account there is insufficient cash available to the Fund for
which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities Purchased. In
any and every case where payment for the purchase of Securities for the
Fund is made by the Custodian in advance of receipt of the Securities
purchased and in the absence of specified Written Instructions to so
pay in advance, the Custodian shall be liable to the Fund for such
payment.
- 13 -
4.3 Sale of Securities. Promptly upon each sale of Securities by the Fund,
Written Instructions shall be delivered to the Custodian, specifying
(i) the name of the issuer or writer of such Securities, and the title
or other description thereof, (ii) the number of shares, principal
amount (and accrued interest, if any), or other units sold, (iii) the
date of sale and settlement, (iv) the sale price per unit, (v) the
total amount payable upon such sale, and (vi) the person to whom such
Securities are to be delivered. Upon receipt of the total amount
payable to the Fund as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in such
Written Instructions. Subject to the foregoing, the Custodian may
accept payment in such form as shall be satisfactory to it, and may
deliver Securities and arrange for payment in accordance with the
customs prevailing among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or any
other provision of this Agreement, the Custodian, when instructed to
deliver Securities against payment, shall be entitled, if in accordance
with generally accepted market practice, to deliver such Securities
prior to actual receipt of final payment therefor. In any such case,
the Fund shall bear the risk that final payment for such Securities may
not be made or that such Securities may be returned or otherwise held
or disposed of by or through the person to whom they were delivered,
and the Custodian shall have no liability for any for the foregoing.
4.5 Payment for Securities Sold. In its sole discretion and from time to
time, the Custodian may credit the Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against
payment, (ii) proceeds from the redemption of Securities or other
assets of the Fund, and (iii) income from cash, Securities or other
assets of the Fund. Any such credit shall be conditional upon actual
receipt by Custodian of final payment and may be reversed if final
payment is not actually received in full. The Custodian may, in its
sole discretion and from time to time, permit the Fund to use funds so
credited to the Fund Custody Account in anticipation of actual receipt
of final payment. Any such funds shall be repayable immediately upon
demand made by the Custodian at any time prior to the actual receipt of
all final payments in anticipation of which funds were credited to the
Fund Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Registrant to
facilitate the settlement of a Fund's transactions in the Fund Custody
Account. Any such advance shall be repayable immediately upon demand
made by Custodian.
Article V
REDEMPTION OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the purpose
in the relevant Fund Custody Account, and upon receipt of Proper
Instructions specifying that the funds are required to redeem Shares of
the Fund, the Custodian
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shall wire each amount specified in such Proper Instructions to or
through such bank or broker-dealer as the Trust may designate.
5.2 No Duty Regarding Paying Banks. Once the Custodian has wired amounts to
a bank or broker-dealer pursuant to Section 5.1 above, the Custodian
shall not be under any obligation to effect any further payment or
distribution by such bank or broker-dealer.
Article VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account:
(a) in accordance with the provisions of any agreement among the
Registrant, the Custodian and a broker-dealer registered under
the 1934 Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by the Fund or in
connection with financial futures contracts (or options
thereon) purchased or sold by the Fund;
(c) which constitute collateral for loans of Securities made by
the Fund;
(d) for purposes of compliance by the Fund with requirements under
the 1940 Act for the maintenance of segregated accounts by
registered investment companies in connection with reverse
repurchase agreements and when-issued, delayed delivery and
firm commitment transactions; and
(e) for other proper corporate purposes, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board, certified by an Officer, setting
forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
- 15 -
Article VII
COMPENSATION OF CUSTODIAN
The Custodian shall be compensated for providing the services set forth
in this Agreement in accordance with the fee schedule set forth on Exhibit D
hereto (as amended from time to time). The Custodian shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by the
Custodian in performing its duties hereunder. The Registrant shall pay all such
fees and reimbursable expenses within 30 calendar days following receipt of the
billing notice, except for any fee or expense subject to a good faith dispute.
The Registrant shall notify the Custodian in writing within 30 calendar days
following receipt of each invoice if the Registrant is disputing any amounts in
good faith. The Registrant shall pay such disputed amounts within 10 calendar
days of the day on which the parties agree to the amount to be paid. With the
exception of any fee or expense the Registrant is disputing in good faith as set
forth above, unpaid invoices shall accrue a finance charge of 1 1/2% per month
after the due date. Notwithstanding anything to the contrary, amounts owed by
the Registrant to the Custodian shall only be paid out of the assets and
property of the particular Fund involved.
Article VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Registrant. The Registrant hereby
represents and warrants to the Custodian, which representations and
warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Registrant in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Registrant, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
8.2 Representations and Warranties of the Custodian. The Custodian hereby
represents and warrants to the Registrant, which representations and
warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
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(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Custodian in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Custodian, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
Article IX
CONCERNING THE CUSTODIAN
9.1 Standard of Care. The Custodian shall exercise reasonable care in the
performance of its duties under this Agreement. The Custodian shall not
be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with its duties under this
Agreement, except a loss arising out of or relating to the Custodian's
(or a Sub-Custodian's) refusal or failure to comply with the terms of
this Agreement (or any sub-custody agreement) or from its (or a
Sub-Custodian's) bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement (or any sub-custody
agreement). The Custodian shall be entitled to rely on and may act upon
advice of counsel on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice. The
Custodian shall promptly notify the Fund of any action taken or omitted
by the Custodian pursuant to advice of counsel.
9.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the Fund or
any money represented by a check, draft or other instrument for the
payment of money, until the Custodian or its agents actually receive
such cash or collect on such instrument.
9.3 No Responsibility for Title, etc. 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 or delivered by it pursuant to this
Agreement.
9.4 Limitation on Duty to Collect. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or
property due and
- 17 -
payable with respect to Securities held for the Fund if such Securities
are in default or payment is not made after due demand or presentation.
9.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in
writing received by it and reasonably believed by it to be genuine. The
Custodian shall be entitled to rely upon any Oral Instructions and any
Written Instructions actually received by it pursuant to this
Agreement.
9.6 Cooperation. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Registrant to
keep the books of account of the Fund and/or compute the value of the
assets of the Fund. The Custodian shall take all such reasonable
actions as the Registrant may from time to time request to enable the
Registrant to obtain, from year to year, favorable opinions from the
Registrant's independent accountants with respect to the Custodian's
activities hereunder in connection with (i) the preparation of the
Registrant's reports on Form N-1A and Form N-SAR and any other reports
required by the SEC, and (ii) the fulfillment by the Registrant of any
other requirements of the SEC.
Article X
INDEMNIFICATION
10.1 Indemnification by Registrant. The Registrant shall indemnify and hold
harmless the Custodian, any Sub-Custodian and any nominee thereof
(each, an "Indemnified Party" and collectively, the "Indemnified
Parties") from and against any and all claims, demands, losses,
expenses and liabilities of any and every nature (including reasonable
attorneys' fees) that an Indemnified Party may sustain or incur or that
may be asserted against an Indemnified Party by any person arising
directly or indirectly (i) from the fact that Securities are registered
in the name of any such nominee, (ii) from any action taken or omitted
to be taken by the Custodian or such Sub-Custodian (a) at the request
or direction of or in reliance on the advice of the Registrant, or (b)
upon Proper Instructions, or (iii) from the performance of its
obligations under this Agreement or any sub-custody agreement, provided
that neither the Custodian nor any such Sub-Custodian shall be
indemnified and held harmless from and against any such claim, demand,
loss, expense or liability arising out of or relating to its refusal or
failure to comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful misconduct in
the performance of its duties under this Agreement (or any sub-custody
agreement). This indemnity shall be a continuing obligation of the
Registrant, its successors and assigns, notwithstanding the termination
of this Agreement. As used in this paragraph, the terms "Custodian" and
"Sub-Custodian" shall include their respective directors, officers and
employees.
10.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Registrant from and against any and all claims, demands,
losses, expenses,
- 18 -
and liabilities of any and every nature (including reasonable
attorneys' fees) that the Fund may sustain or incur or that may be
asserted against the Fund by any person arising out of any action taken
or omitted to be taken by an Indemnified Party as a result of the
Indemnified Party's refusal or failure to comply with the terms of this
Agreement (or any sub-custody agreement), or from its bad faith,
negligence or willful misconduct in the performance of its duties under
this Agreement (or any sub-custody agreement). This indemnity shall be
a continuing obligation of the Custodian, its successors and assigns,
notwithstanding the termination of this Agreement. As used in this
paragraph, the term "Registrant" shall include the Registrant's
directors and officers.
10.3 Security. If the Custodian advances cash or Securities to the Fund for
any purpose, either at the Fund's request or as otherwise contemplated
in this Agreement, or in the event that the Custodian or its nominee
incurs, in connection with its performance under this Agreement, any
claim, demand, loss, expense or liability (including reasonable
attorneys' fees) (except such as may arise from its or its nominee's
bad faith, negligence or willful misconduct), then, in any such event,
any property at any time held for the account of the Fund shall be
security therefor, and should the Fund fail promptly to repay or
indemnify the Custodian, the Custodian shall be entitled to utilize
available cash of such Fund and to dispose of other assets of such Fund
to the extent necessary to obtain reimbursement or indemnification.
10.4 Miscellaneous.
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under any
provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
(c) In order that the indemnification provisions contained in this
Article shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised
of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning
any situation that presents or appears likely to present the
probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any
claim that may be the subject of this indemnification. In the
event that the indemnitor so elects, it will so notify the
indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any
compromise in any case in
- 19 -
which the indemnitor will be asked to indemnify the indemnitee except
with the indemnitor's prior written consent.
Article XI
FORCE MAJEURE
Neither the Custodian nor the Registrant shall be liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires; floods;
wars; civil or military disturbances; acts of terrorism; sabotage; strikes;
epidemics; riots; power failures; computer failure and any such circumstances
beyond its reasonable control as may cause interruption, loss or malfunction of
utility, transportation, computer (hardware or software) or telephone
communication service; accidents; labor disputes; acts of civil or military
authority; governmental actions; or inability to obtain labor, material,
equipment or transportation; provided, however, that in the event of a failure
or delay, the Custodian (i) shall not discriminate against the Fund in favor of
any other customer of the Custodian in making computer time and personnel
available to input or process the transactions contemplated by this Agreement,
and (ii) shall use its best efforts to ameliorate the effects of any such
failure or delay.
Article XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers,
and employees to treat confidentially and as proprietary information of the
Registrant, all records and other information relative to the Fund and prior,
present, or potential shareholders of the Fund and not to use such records and
information for any purpose other than the performance of its responsibilities
and duties hereunder, except (i) after prior notification to and approval in
writing by the Registrant, which approval shall not be unreasonably withheld and
may not be withheld where the Custodian may be exposed to civil or criminal
contempt proceedings for failure to comply, (ii) when requested to divulge such
information by duly constituted authorities, or (iii) when so requested by the
Registrant. Records and other information which have become known to the public
through no wrongful act of the Custodian or any of its employees, agents or
representatives, and information that was already in the possession of the
Custodian prior to receipt thereof from the Registrant or its agent, shall not
be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by
the Registrant pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time. In this regard, the Custodian shall have in place
and maintain physical, electronic and procedural safeguards reasonably designed
to protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the Fund
and its shareholders.
- 20 -
Article XIII
EFFECTIVE PERIOD; TERMINATION
13.1 Effective Period. This Agreement shall become effective as of the date
first written.
13.2 Termination. This Agreement may be terminated by either party upon
giving 90 days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. Notwithstanding the
foregoing, this Agreement may be terminated by any party upon the
breach of the other party of any material term of this Agreement if
such breach is not cured within 15 days of notice of such breach to the
breaching party. In addition, the Registrant may, at any time,
immediately terminate this Agreement in the event of the appointment of
a conservator or receiver for the Custodian by regulatory authorities
or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
13.3 Appointment of Successor Custodian. If a successor custodian shall have
been appointed by the Board, the Custodian shall, upon receipt of a
notice of acceptance by the successor custodian, on such specified date
of termination (i) deliver directly to the successor custodian all
Securities (other than Securities held in a Book-Entry System or
Securities Depository) and cash then owned by the Fund and held by the
Custodian as custodian, and (ii) transfer any Securities held in a
Book-Entry System or Securities Depository to an account of or for the
benefit of the Fund at the successor custodian, provided that the
Registrant shall have paid to the Custodian all fees, expenses and
other amounts to the payment or reimbursement of which it shall then be
entitled. In addition, the Custodian shall, at the expense of the
Registrant, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by the
Custodian under this Agreement in a form reasonably acceptable to the
Registrant (if such form differs from the form in which the Custodian
has maintained the same, the Registrant shall pay any expenses
associated with transferring the data to such form), and will cooperate
in the transfer of such duties and responsibilities, including
provision for assistance from the Custodian's personnel in the
establishment of books, records, and other data by such successor. Upon
such delivery and transfer, the Custodian shall be relieved of all
obligations under this Agreement.
13.4 Failure to Appoint Successor Custodian. If a successor custodian is not
designated by the Registrant on or before the date of termination of
this Agreement, then the Custodian shall have the right to deliver to a
bank or trust company of its own selection, which bank or trust company
(i) is a "bank" as defined in the 1940 Act, and (ii) has aggregate
capital, surplus and undivided profits as shown on its most recent
published report of not less than $25 million, all Securities, cash and
other property held by Custodian under this Agreement
- 21 -
and to transfer to an account of or for the Fund at such bank or trust
company all Securities of the Fund held in a Book-Entry System or
Securities Depository. Upon such delivery and transfer, such bank or
trust company shall be the successor custodian under this Agreement and
the Custodian shall be relieved of all obligations under this
Agreement. In addition, under these circumstances, all books, records
and other data of the Trust shall be returned to the Trust.
Article XIV
MISCELLANEOUS
14.1 Compliance with Laws. The Registrant has and retains primary
responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with the 1940 Act, the Internal
Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the USA Patriot
Act of 2002 and the policies and limitations of the Fund relating to
its portfolio investments as set forth in its Prospectus and Statement
of Additional Information. The Custodian's services hereunder shall not
relieve the Registrant of its responsibilities for assuring such
compliance or the Board's oversight responsibility with respect
thereto.
14.2 Amendment. This Agreement may not be amended or modified in any manner
except by written agreement executed by the Custodian and the
Registrant, and authorized or approved by the Board.
14.3 Assignment. This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Registrant
without the written consent of the Custodian, or by the Custodian
without the written consent of the Registrant accompanied by the
authorization or approval of the Board.
14.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without regard to
conflicts of law principles. To the extent that the applicable laws of
the State of Minnesota, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the SEC thereunder.
14.5 No Agency Relationship. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other party
to this Agreement, or to conduct business in the name, or for the
account, of the other party to this Agreement.
14.6 Services Not Exclusive. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties that
are similar or identical to some or all of the services provided
hereunder.
14.7 Invalidity. Any provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable in any
jurisdiction shall, as
- 22 -
to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. In such case, the parties shall in
good faith modify or substitute such provision consistent with the
original intent of the parties.
14.8 Notices. Any notice required or permitted to be given by either party
to the other shall be in writing and shall be deemed to have been given
on the date delivered personally or by courier service, or three days
after sent by registered or certified mail, postage prepaid, return
receipt requested, or on the date sent and confirmed received by
facsimile transmission to the other party's address set forth below:
Notice to the Custodian shall be sent to:
U.S. Bank National Association
000 Xxxxxx Xxxxxx, X.X. XX-XX-X0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Facsimile: (000) 000-0000
and notice to the Registrant shall be sent to:
RiverSource Funds
Attn: Xxxxxx X. Xxx
000 Xxxxxxxxx Xxxxxx Xxxxx Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Phone: 000 000-0000
Fax: 000 000-0000
With a copy to:
RiverSource Investments, LLC
Attn: Custodian Operations
00000 Xxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
14.9 Multiple Originals. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an
original, but such counterparts shall together constitute but one and
the same instrument.
14.10 No Waiver. No failure by either party hereto to exercise, and no delay
by such party in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by either party hereto of any right
hereunder shall not preclude the exercise of any other right, and the
remedies provided herein are cumulative and not exclusive of any
remedies provided at law or in equity.
- 23 -
14.11 References to Custodian. Registrant shall not circulate any printed
matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in
the prospectus or Statement of Additional Information for the Fund and
such other printed matter as merely identifies Custodian as custodian
for the Fund. The Registrant shall submit printed matter requiring
approval to Custodian in draft form, allowing sufficient time for
review by Custodian and its counsel prior to any deadline for printing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
REGISTRANTS U.S. BANK NATIONAL
By: /s/ Xxxxxx X. Xxx By: /s/ Xxx X. Xxxxxxx
----------------- ------------------
Name: Xxxxxx X. Xxx Name: Xxx X. Xxxxxxx
Title: Vice President Title: Senior Vice President
- 24 -
EXHIBIT A
REGISTRANT
AXP Tax-Exempt Series, Inc.
[to be named RiverSource Tax-Exempt Series, Inc. after February 15,
2006]
RiverSource Intermediate Tax-Exempt Fund
RiverSource Tax-Exempt Bond Fund
AXP Tax-Free Money Series, Inc.
[to be named RiverSource Tax-Exempt Money Market Series, Inc. after
February 15, 2006]
RiverSource Tax-Exempt Money Market Fund
AXP California Tax-Exempt Trust
[to be named RiverSource California Tax-Exempt Trust after February 15,
2006]
RiverSource California Tax-Exempt Fund
AXP Special Tax-Exempt Series Trust
[to be named RiverSource Special Tax-Exempt Series Trust after February
15, 2006]
RiverSource Insured Tax-Exempt Fund
[to be mergered into RiverSource Tax-Exempt Bond Fund after
February 15, 2006]
RiverSource Massachusetts Tax-Exempt Fund
RiverSource Michigan Tax-Exempt Fund
RiverSource Minnesota Tax-Exempt Fund
RiverSource New York Tax-Exempt Fund
RiverSource Ohio Tax-Exempt Fund
AXP High Yield Income Series, Inc
[to be named RiverSource High Yield Income Series, Inc. after February
15, 2006]
RiverSource High Yield Bond Fund
AXP Fixed Income Series, Inc.
[to be named RiverSource Diversified Income Series, Inc. after February
15, 2006]
RiverSource Diversified Bond Fund
AXP Income Series, Inc.
[to be named RiverSource Income Series, Inc. after February 15, 2006]
RiverSource Selective Fund
[to be mergered into RiverSource Diversified Bond Fund after
February 15, 2006]
Income Trust
[currently holds the assets of RiverSource Selective Fund (Quality
Income Portfolio) and will transfer the assets to RiverSource
Diversified Bond Fund on the on the date of the merger and cease to
exist.]
AXP High Yield Tax-Exempt Series, Inc.
[to be named RiverSource Tax-Exempt Income Series, Inc. after February
15, 2006]
RiverSource Tax-Exempt High Income Fund
- A-1 -
EXHIBIT B
U.S. Bank Institutional Custody Services
Standards of Service Guide
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of
New York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and The Wall Street Journal.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received
three (3) business days prior to any payment or settlement in order for the
USBank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide
is subject to change. Should any changes be made USBank will
provide you with an updated copy of its Standards of Service
Guide.
- B-1 -
U.S. Bank Trade Settlement Instructions
Transaction Type Delivery Instructions
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional #
if applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account # (your U.S. Bank Trust account number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as ABA#: 000000000
collateral for repurchase agreements Routing Symbol: 1040 Special
For Account # (your U. S. Bank Trust account number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in Milwaukee, XX Xxx 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e.,
pair off, repo, tri-party
BBI or OBI For further credit to account: (trust
acct. #, contact name & phone number)
- B-2 -
USBank Payment Standards
Security Type Income Principal
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment
will be made on the immediately following business day.
- B-3 -
USBank Corporate Reorganization Standards
Type of Action Notification to Client Deadline for Client Instructions Transaction
to USBank Posting
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies,
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above
will be sold.
- B-4 -
EXHIBIT C
Fee Schedule
U.S. Bank Institutional Custody Services
Article XV
Domestic Custody Fee Schedule
Prepared For: Registrants
U.S. Bank Institutional Custody Services, as Custodian, will receive quarterly
compensation for services according to the terms of the following schedule:
I. Domestic Market Value Fee
II. First 500,000,000 1.00 b.p.
III. Next 2,000,000,000 .50 b.p.
IV. Next 2,500,000,000 .40 b.p.
V. Balance .30 b.p.
Issue Holding Fee
Total Book Entry Holdings $15.00/asset
Total Physical Holdings $30.00/asset
II. Portfolio Transaction Fees per transaction or account
(a) Book entry transaction processed through
DTC or Federal Reserve $15.00
(b) Physical transaction processed through
our New York custodian $30.00
(c) Disbursement/Wire/DDA $10.00
(d) Global Trades $75.00
(e) Flat fee (per open account, currently
38 accounts) $125.00/qtr
(f) Base fee (3 Master Feeder accounts) $2,200.00/qtr
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange.
III. Out-of-Pocket Expenses
The only out-of-pocket expenses charged to your account will be shipping fees or
transfer fees.
- C-1 -
EXHIBIT D
SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION
The Shareholder Communications Act of 1985 requires banks and trust companies to
make an effort to permit direct communication between a company which issues
securities and the shareholder who votes those securities.
Unless you specifically require us to NOT release your name and address to
requesting companies, we are required by law to disclose your name and address.
Your "yes" or "no" to disclosure will apply to all securities U.S. Bank holds
for you now and in the future, unless you change your mind and notify us in
writing.
YES U.S. Bank is authorized to provide the Registrant's
----- name, address and security position to requesting
companies whose stock is owned by the Registrant.
X NO U.S. Bank is NOT authorized to provide the
----- Registrant's name, address and security position to
requesting companies whose stock is owned by the
Registrant.
REGISTRANTS
By: /s/ Xxxxxx X. Xxx
-----------------
Xxxxxx X. Xxx
Title: Vice President
Date: November 10, 2005
- D-1 -
