CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT made the 25th day of April, 1996, by and between INVESTORS
FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of the state
of Missouri, having its trust office located at x00 Xxxx 00xx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000 ("Custodian"), and each registered investment company
listed on Exhibit A hereto, as it may be amended from time to time, each a
having its principal office and place of business at 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 (each a "Fund" and collectively the "Funds").
WITNESSETH:
WHEREAS, each Fund desires to appoint Investors Fiduciary Trust Company as
custodian of the securities and monies of such Fund's investment portfolio and
as its agent to perform certain investment accounting and recordkeeping
functions; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment; NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties
hereto, intending to be legally bound, mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Each Fund hereby constitutes and appoints
Custodian as:
A. Custodian of the securities and monies at any time owned by the
Fund; and
B. Agent to perform certain accounting and recordkeeping functions
relating to portfolio transactions required of a duly registered
investment company under Rule 31a of the Investment Company Act of
1940 (the "1940 Act") and to calculate the net asset value of the
Fund.
2. REPRESENTATIONS AND WARRANTIES.
A. Each Fund hereby represents, warrants and acknowledges to Custodian:
1. That it is a corporation duly organized and existing and in
good standing under the laws of its state of organization,
and that it is registered under the 1940 Act; and
2. That it has the requisite power and authority under
applicable law, its articles of incorporation and its
bylaws to enter into this Agreement; that it has taken all
requisite action necessary to appoint Custodian as
custodian and investment accounting and recordkeeping agent
for the Fund; that this Agreement has been duly executed
and delivered by Fund; and that this Agreement constitutes
a legal, valid and binding obligation of Fund, enforceable
in accordance with its terms.
B. Custodian hereby represents, warrants and acknowledges to the Funds:
1. That it is a trust company duly organized and existing and
in good standing under the laws of the State of Missouri
and
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2. That it has the requisite power and authority under
applicable law, its charter and its bylaws to enter into
and perform this Agreement; that this Agreement has been
duly executed and delivered by Custodian; and that this
Agreement constitutes a legal, valid and binding obligation
of Custodian, enforceable in accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Except as permitted by the 1940 Act, each Fund will deliver or cause
to be delivered to Custodian on the effective date of this
Agreement, or as soon thereafter as practicable, and from time to
time thereafter, all portfolio securities acquired by it and monies
then owned by it or from time to time coming into its possession
during the time this Agreement shall continue in effect. Custodian
shall have no responsibility or liability whatsoever for or on
account of securities or monies not so delivered.
B. Delivery of Accounts and Records
Each Fund shall turn over or cause to be turned over to Custodian
all of the Fund's relevant accounts and records previously
maintained. Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it, and each Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or
other deficiency of such Fund's accounts and records or in the
failure of such Fund to provide, or to provide in a timely manner,
any accounts, records or information needed by the Custodian to
perform its functions hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets of
each Fund delivered to it from time to time segregated in a separate
account, and if any Fund is comprised of more than one portfolio of
investment securities (each a "Portfolio") Custodian shall keep the
assets of each Portfolio segregated in a separate account. Custodian
will not deliver, assign, pledge or hypothecate any such assets to
any person except as permitted by the provisions of this Agreement
or any agreement executed by it according to the terms of Section
3.S. of this Agreement. Upon delivery of any such assets to a
subcustodian pursuant to Section 3.S. of this Agreement, Custodian
will create and maintain records identifying those assets which have
been delivered to the subcustodian as belonging to the applicable
Fund, by Portfolio if applicable. The Custodian is responsible for
the safekeeping of the securities and monies of
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the Funds only until they have been transmitted to and received by
other persons as permitted under the terms of this Agreement, except
for securities and monies transmitted to subcustodians appointed
under Section 3.S. of this Agreement, for which Custodian remains
responsible to the extent provided in Section 3.S. hereof. Custodian
may participate directly or indirectly through a subcustodian in the
Depository Trust Company (DTC), Treasury/Federal Reserve Book Entry
System (Fed System), Participant Trust Company (PTC) or other
depository approved by the Funds (as such entities are defined at 17
CFR Section 270.17f-4(b)) (each a "Depository" and collectively, the
"Depositories").
D. Registration of Securities
The Custodian shall at all times hold registered securities of the
Funds in the name of the Custodian, the applicable Fund, or a
nominee of either of them, unless specifically directed by
instructions to hold such registered securities in so-called "street
name," provided that, in any event, all such securities and other
assets shall be held in an account of the Custodian containing only
assets of the applicable Fund, or only assets held by the Custodian
as a fiduciary or custodian for customers, and provided further,
that the records of the Custodian at all times shall indicate the
Fund or other customer for which such securities and other assets
are held in such account and the respective interests therein. If,
however, any Fund directs the Custodian to maintain securities in
"street name", notwithstanding anything contained herein to the
contrary, the Custodian shall be obligated only to utilize its best
efforts to timely collect income due the Fund on such securities and
to notify the Fund of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange
offers. All securities, and the ownership thereof by the applicable
Fund, which are held by Custodian hereunder, however, shall at all
times be identifiable on the records of the Custodian. Each Fund
agrees to hold Custodian and its nominee harmless for any liability
as a shareholder of record of its securities held in custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of a Fund for other securities
or cash issued or paid in connection with any reorganization,
recapitalization, merger, consolidation, split-up of shares, change
of par value, conversion or otherwise, and will deposit any such
securities in accordance with the terms of any reorganization or
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protective plan. Without instructions, Custodian is authorized to
exchange securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par value
of the stock is changed, and, upon receiving payment therefor, to
surrender bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that Custodian shall
receive instructions prior to surrendering any convertible security.
F. Purchases of Investments of a Fund - Other Than Options and Futures
Each Fund will, on each business day on which a purchase of
securities (other than options and futures) shall be made by it,
deliver to Custodian instructions which shall specify with respect
to each such purchase:
1. If applicable, the name of the Portfolio making such
purchase;
2. The name of the issuer and description the security;
3. The number of shares and the principal amount
purchased, and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer
through whom the purchase was made; and
9. Whether the security is to be received in certificated
form or via a specified Depository.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of the applicable Fund, but only insofar
as such monies are available for such purpose, and receive the
portfolio securities so purchased by or for the account of the
applicable Fund, except that Custodian may in its sole discretion
advance funds to the Fund which may result in an overdraft because
the monies held by the Custodian on behalf of the Fund are
insufficient to pay the total amount payable upon such purchase.
Except as otherwise instructed by the applicable Fund, such payment
shall be made by the Custodian only upon receipt of securities: (a)
by the Custodian; (b) by a clearing corporation of a national
exchange of which the Custodian is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) in the case of a repurchase
agreement, the Custodian may release funds to a Depository prior to
the receipt of advice from the Depository that the
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securities underlying such repurchase agreement have been
transferred by book-entry into the account maintained with such
Depository by the Custodian, on behalf of its customers, provided
that the Custodian's instructions to the Depository require that the
Depository make payment of such funds only upon transfer by
book-entry of the securities underlying the repurchase agreement in
such account; (ii) in the case of time deposits, call account
deposits, currency deposits and other deposits, foreign exchange
transactions, futures contracts or options, the Custodian may make
payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and (iii) in
the case of the purchase of securities, the settlement of which
occurs outside of the United States of America, the Custodian may
make, or cause a subcustodian appointed pursuant to Section 3.S.2.
of this Agreement to make, payment therefor in accordance with
generally accepted local custom and market practice.
G. Sales and Deliveries of Investments of a Fund - Other Than Options
and Futures
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Each Fund will, on each business day on which a sale of investment
securities (other than options and futures) of such Fund has been
made, deliver to Custodian instructions specifying with respect to
each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or
other information identifying the securities sold and to be
delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission,taxes
or other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom
or person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or
cause to be delivered the securities thus designated as sold for the
account of the applicable Fund to the broker or other person
specified in the instructions relating to such sale. Except as
otherwise instructed by the applicable Fund, such delivery shall be
made upon receipt of: (a) payment therefor in such form as is
satisfactory to the Custodian; (b) credit to the account of the
Custodian with
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a clearing corporation of a national securities exchange of which
the Custodian is a member; or (c) credit to the account of the
Custodian, on behalf of its customers, with a Depository.
Notwithstanding the foregoing: (i) in the case of securities held in
physical form, such securities shall be delivered in accordance with
"street delivery custom" to a broker or its clearing agent; or (ii)
in the case of the sale of securities, the settlement of which
occurs outside of the United States of America, the Custodian may
make, or cause a subcustodian appointed pursuant to Section 3.S.2.
of this Agreement to make, such delivery upon payment therefor in
accordance with generally accepted local custom and market practice.
H. Purchases or Sales of Options and Futures
Each Fund will, on each business day on which a purchase or sale of
the following options and/or futures shall be made by it, deliver
to Custodian instructions which shall specify with respect to each
such purchase or sale:
1. If applicable, the name of the Portfolio making such
purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through
whom the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
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i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer
through whom the sale or purchase was made, or
other applicable settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract
and, when available, the closing level, thereof;
b. The index level on the date the contract is entered
into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to instructions,and if not already in the
possession of Custodian, Fund shall deliver a
substantially complete and executed custodial
safekeeping account and procedural agreement
which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission
merchant through whom the sale or purchase was
made, or other applicable settlement instructions.
5. Options on Index Future Contracts
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of the applicable
Fund, and subject to such additional terms and conditions as
Custodian may require:
1. Upon receipt of instructions, Custodian will release or
cause to be released securities
held in custody to the pledgee designated in such
instructions by way of pledge or hypothecation to secure
any loan incurred by such Fund; provided, however, that the
securities shall be released only upon payment to Custodian
of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing
already made, further securities may be released or caused
to be released for that
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purpose upon receipt of instructions. Upon receipt of
instructions, Custodian will pay, but only from funds
available for such purpose, any such loan upon redelivery
to it of the securities pledged or hypothecated therefor
and upon surrender of the note or notes evidencing such
loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated in
such instructions; provided, however, that the securities
will be released only upon deposit with Custodian of full
cash collateral as specified in such instructions, and that
such Fund will retain the right to any dividends, interest
or distribution on such loaned securities. Upon receipt of
instructions and the loaned securities, Custodian will
release the cash collateral to the borrower.
J. Routine Matters
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution,
purchase, transfer, or other dealings with securities or other
property of the Funds except as may be otherwise provided in this
Agreement or directed from time to time by the applicable Fund in
writing.
K. Deposit Accounts
Custodian will open and maintain one or more special purpose deposit
accounts for each Fund in the name of Custodian ("Accounts"),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the
account of any Fund shall be deposited in the appropriate Accounts.
Barring events not in the control of the Custodian such as strikes,
lockouts or labor disputes, riots, war or equipment or transmission
failure or damage, fire, flood, earthquake or other natural
disaster, action or inaction of governmental authority or other
causes beyond its control, at 9:00 a.m., Kansas City time, on the
second business day after deposit of any check into an Account,
Custodian agrees to make Fed Funds available to the applicable Fund
in the amount of the check. Deposits made by Federal Reserve wire
will be available to the Fund immediately and ACH wires will be
available to the Fund on the next business day. Income earned on the
portfolio securities will be credited to the Fund based on the
schedule attached as Exhibit A. The Custodian will be entitled to
reverse any credited amounts where credits have been made and monies
are not finally collected. If monies are collected after such
reversal, the Custodian will credit the Fund in that amount.
Custodian may open and maintain Accounts in such banks or trust
companies as may be designated by it or by the applicable Fund in
writing, all
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such Accounts, however, to be in the name of Custodian and subject
only to its draft or order. Funds received and held for the account
of different Portfolios shall be maintained in separate Accounts
established for each Portfolio.
L. Income and Other Payments to the Funds
Custodian will:
1. Collect, claim and receive and deposit for the account of
the applicable Fund all income and other payments which
become due and payable on or after the effective date of
this Agreement with respect to the securities deposited
under this Agreement, and credit the account of such Fund
in accordance with the schedule attached hereto as Exhibit
A. If, for any reason, the Fund is credited with income
that is not subsequently collected, Custodian may reverse
that credited amount.
2. Execute ownership and other certificates and affidavits for
all federal, state and local tax purposes in connection
with the collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income
and other payments, including but not limited to
the presentation for payment of:
1. all coupons and other income items
requiring presentation; and
2. all other securities which may
mature or be called, redeemed,
retired or otherwise become
payable and regarding which the
Custodian has actual knowledge,
or should reasonably be expected
to have knowledge; and
b. the endorsement for collection, in the name of the
applicable Fund, of all checks, drafts or other
negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction
against the costs and expenses of such suit or other actions.
Custodian will receive, claim and collect all stock dividends,
rights and other similar items and will deal with the same pursuant
to instructions.
M. Payment of Dividends and Other Distributions
On the declaration of any dividend or other distribution on the
shares of capital stock of any Fund ("Fund Shares") by the Board of
Directors of such Fund, such Fund shall deliver to Custodian
instructions with respect thereto. On the date specified in such
instructions for the payment of such dividend or other distribution,
Custodian will pay out of the monies held for
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the account of such Fund, insofar as the same shall be available for
such purposes, and credit to the account of the Dividend Disbursing
Agent for such Fund, such amount as may be specified in such
instructions.
N. Shares of a Fund Purchased by Such Fund
Whenever any Fund Shares are repurchased or redeemed by a Fund, such
Fund or its agent shall advise Custodian of the aggregate dollar
amount to be paid for such shares and shall confirm such advice in
writing. Upon receipt of such advice, Custodian shall charge such
aggregate dollar amount to the account of such Fund and either
deposit the same in the account maintained for the purpose of paying
for the repurchase or redemption of Fund Shares or deliver the same
in accordance with such advice. Custodian shall not have any duty or
responsibility to determine that Fund Shares have been removed from
the proper shareholder account or accounts or that the proper number
of Fund Shares have been canceled and removed from the shareholder
records.
O. Shares of a Fund Purchased from Such Fund
Whenever Fund Shares are purchased from any Fund, such Fund will
deposit or cause to be deposited with Custodian the amount received
for such shares. Custodian shall not have any duty or responsibility
to determine that Fund Shares purchased from any Fund have been
added to the proper shareholder account or accounts or that the
proper number of such shares have been added to the shareholder
records.
P. Proxies and Notices
Custodian will promptly deliver or mail or have delivered or mailed
to the applicable Fund all proxies properly signed, all notices of
meetings, all proxy statements and other notices, requests or
announcements affecting or relating to securities held by Custodian
for such Fund and will, upon receipt of instructions, execute and
deliver or cause its nominee to execute and deliver or mail or have
delivered or mailed such proxies or other authorizations as may be
required. Except as provided by this Agreement or pursuant to
instructions hereafter received by Custodian, neither it nor its
nominee will exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy, power of
attorney, or other similar instrument voting any of such securities,
or give any consent, approval or waiver with respect thereto, or
take any other similar action.
Q. Disbursements
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Custodian will pay or cause to be paid, insofar as funds are
available for the purpose, bills, statements and other obligations
of each Fund (including but not limited to obligations in connection
with the conversion, exchange or surrender of securities owned by
such Fund, interest charges, dividend disbursements, taxes,
management fees, custodian fees, legal fees, auditors' fees,
transfer agents' fees, brokerage commissions, compensation to
personnel, and other operating expenses of such Fund) pursuant to
instructions of such Fund setting forth the name of the person to
whom payment is to be made, the amount of the payment, and the
purpose of the payment.
R. Daily Statement of Accounts
Custodian will, within a reasonable time, render to each Fund a
detailed statement of the amounts received or paid and of securities
received or delivered for the account of the Fund during each
business day. Custodian will, from time to time, upon request by any
Fund, render a detailed statement of the securities and monies held
for such Fund under this Agreement, and Custodian will maintain such
books and records as are necessary to enable it to do so. Custodian
will permit such persons as are authorized by any Fund, including
such Fund's independent public accountants, reasonable access to
such records or will provide reasonable confirmation of the contents
of such records, and if demanded, Custodian will permit federal and
state regulatory agencies to examine the securities, books and
records. Upon the written instructions of any Fund or as demanded by
federal or state regulatory agencies, Custodian will instruct any
subcustodian to permit such persons as are authorized by such Fund,
including such Fund's independent public accountants, reasonable
access to such records or to provide reasonable confirmation of the
contents of such records, and to permit such agencies to examine the
books, records and securities held by such subcustodian which relate
to such Fund.
S. Appointment of Subcustodians
1. Notwithstanding any other provisions of this Agreement, all
or any of the monies or securities of the Funds may be held
in Custodian's own custody or in the custody of one or more
other banks or trust companies acting as subcustodians as
may be selected by Custodian. Any such subcustodian
selected by the Custodian must have the qualifications
required for a custodian under the 1940 Act, as amended.
Custodian shall be responsible to the applicable Fund for
any loss, damage or expense
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suffered or incurred by the Fund resulting from the actions
or omissions of any subcustodians selected and appointed by
Custodian (except subcustodians appointed at the request of
the Fund and as provided in Subsection 2 below) to the same
extent Custodian would be responsible to the Fund under
Section 5. of this Agreement if it committed the act or
omission itself. Upon request of any Fund, Custodian shall
be willing to contract with other subcustodians reasonably
acceptable to the Custodian for purposes of (i) effecting
third-party repurchase transactions with banks, brokers,
dealers, or other entities through the use of a common
custodian or subcustodian, or (ii) providing depository and
clearing agency services with respect to certain variable
rate demand note securities, or (iii) for other reasonable
purposes specified by such Fund; provided, however, that
the Custodian shall be responsible to the Fund for any
loss, damage or expense suffered or incurred by the Fund
resulting from the actions or omissions of any such
subcustodian only to the same extent such subcustodian is
responsible to the Custodian. The Fund shall be entitled to
review the Custodian's contracts with any such
subcustodians appointed at its request. Custodian shall be
responsible to the applicable Fund for any loss, damage or
expense suffered or incurred by the Fund resulting from the
actions or omissions of any Depository only to the same
extent such Depository is responsible to Custodian.
2. Notwithstanding any other provisions of this Agreement,
each Fund's foreign
securities (as defined in Rule 17f-5(c)(1) under the 0000
Xxx) and each Fund's cash or cash equivalents, in amounts
deemed by the Fund to be reasonably necessary to effect
Fund's foreign securities transactions, may be held in the
custody of one or more banks or trust companies acting as
subcustodians, and thereafter, pursuant to a written
contract or contracts as approved by such Fund's Board of
Directors, may be transferred to accounts maintained by any
such subcustodian with eligible foreign custodians, as
defined in Rule 17f-5(c)(2). Custodian shall be responsible
to the Fund for any loss, damage or expense suffered or
incurred by the Fund resulting from the actions or
omissions of any foreign subcustodian only to the same
extent the foreign subcustodian is liable to the domestic
subcustodian with which the Custodian contracts for
foreign subcustody purposes.
T. Accounts and Records
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Custodian will prepare and maintain, with the direction and as
interpreted by each Fund, its accountants and/or other advisors, in
complete, accurate and current form all accounts and records (i)
required to be maintained by such Fund with respect to portfolio
transactions under Rule 31a of the 1940 Act, (ii) required to be
maintained as a basis for calculation of such Fund's net asset
value, and (iii) as otherwise agreed upon between the parties.
Custodian will preserve said records in the manner and for the
periods prescribed in the 1940 Act or for such longer period as is
agreed upon by the parties. Custodian relies upon each Fund to
furnish, in writing or its electronic or digital equivalent,
accurate and timely information needed by Custodian to complete such
Fund's records and perform daily calculation of such Fund's net
asset value. Custodian shall incur no liability and each Fund shall
indemnify and hold harmless Custodian from and against any liability
arising from any failure of such Fund to furnish such information in
a timely and accurate manner, even if such Fund subsequently
provides accurate but untimely information. It shall be the
responsibility of each Fund to furnish Custodian with the
declaration, record and payment dates and amounts of any dividends
or income and any other special actions required concerning each of
its securities when such information is not readily available from
generally accepted securities industry services or publications.
U. Accounts and Records Property of the Funds
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the property
of the applicable Fund, and will be made available to such Fund for
inspection or reproduction within a reasonable period of time, upon
demand. Custodian will assist any Fund's independent auditors, or
upon approval of the Fund, or upon demand, any regulatory body, in
any requested review of the Fund's accounts and records but shall be
reimbursed by the Fund for all expenses and employee time invested
in any such review outside of routine and normal periodic reviews.
Upon receipt from any Fund of the necessary information or
instructions, Custodian will supply information from the books and
records it maintains for such Fund that the Fund needs for tax
returns, questionnaires, periodic reports to shareholders and such
other reports and information requests as such Fund and Custodian
shall agree upon from time to time.
V. Adoption of Procedures
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Custodian and each Fund may from time to time adopt procedures as
they agree upon, and Custodian may conclusively assume that no
procedure approved or directed by a Fund or its accountants or other
advisors conflicts with or violates any requirements of its
prospectus, articles of incorporation, bylaws, any applicable law,
rule or regulation, or any order, decree or agreement by which such
Fund may be bound. Each Fund will be responsible to notify Custodian
of any changes in statutes, regulations, rules, requirements or
policies which might necessitate changes in Custodian's
responsibilities or procedures.
W. Calculation of Net Asset Value
Custodian will calculate each Fund's net asset value, in accordance
with such Fund's prospectus. Custodian will price the securities and
foreign currency holdings of each Fund for which market quotations
are available by the use of outside services designated by such Fund
which are normally used and contracted with for this purpose; all
other securities and foreign currency holdings will be priced in
accordance with such Fund's instructions. Custodian will have no
responsibility for the accuracy of the prices quoted by these
outside services or for the information supplied by any Fund or for
acting upon such instructions.
X. Advances
In the event Custodian or any subcustodian shall, in its sole
discretion, advance cash or securities for any purpose (including
but not limited to securities settlements, purchase or sale of
foreign exchange or foreign exchange contracts and assumed
settlement) for the benefit of any Fund or Portfolio thereof, the
advance shall be payable by the applicable Fund or Portfolio on
demand. Any such cash advance shall be subject to an overdraft
charge at the rate set forth in the then-current fee schedule from
the date advanced until the date repaid. As security for each such
advance, each Fund hereby grants Custodian and such subcustodian a
lien on and security interest in all property at any time held for
the account of the Fund or applicable Portfolio, including without
limitation all assets acquired with the amount advanced. Should the
Fund fail to promptly repay the advance, the Custodian and such
subcustodian shall be entitled to utilize available cash and to
dispose of such Fund's or Portfolio's assets pursuant to applicable
law to the extent necessary to obtain reimbursement of the amount
advanced and any related overdraft charges.
Y. Exercise of Rights; Tender Offers
Upon receipt of instructions, the Custodian shall: (a) deliver
warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to the agent of such issuer or trustee, for
14
the purpose of exercise or sale, provided that the new securities,
cash or other assets, if any, are to be delivered to the Custodian;
and (b) deposit securities upon invitations for tenders thereof,
provided that the consideration for such securities is to be paid or
delivered to the Custodian or the tendered securities are to be
returned to the Custodian.
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written (including
telecopied or telexed) or oral instructions which Custodian
reasonably believes were given by a designated representative of any
Fund. Each Fund shall deliver to Custodian, prior to delivery of any
assets to Custodian and thereafter from time to time as changes
therein are necessary, written instructions naming one or more
designated representatives to give instructions in the name and on
behalf of such Fund, which instructions may be received and accepted
by Custodian as conclusive evidence of the authority of any
designated representative to act for such Fund and may be considered
to be in full force and effect(and Custodian will be fully protected
in acting in reliance thereon) until receipt by Custodian of notice
to the contrary. Unless such written instructions delegating
authority to any person to give instructions specifically limit such
authority to specific matters or require that the approval of anyone
else will first have been obtained, Custodian will be under no
obligation to inquire into the right of such person, acting alone,to
give any instructions whatsoever which Custodian may receive from
such person. If any Fund fails to provide Custodian any such
instructions naming designated representatives, any instructions
received by Custodian from a person reasonably believed to be an
appropriate representative of such Fund shall constitute valid and
proper instructions hereunder. "Designated representatives" of a
Fund may include its employees and agents, including investment
managers and their employees.
B. No later than the next business day immediately following each oral
instruction, the applicable Fund will send Custodian written
confirmation of such oral instruction. At Custodian's sole
discretion, Custodian may record on tape, or otherwise, any oral
instruction whether given in person or via telephone, each such
recording identifying the date and the time of the beginning and
ending of such oral instruction.
C. If Custodian shall provide any Fund any direct access to any
computerized recordkeeping and reporting system used hereunder or if
Custodian and any Fund shall agree to utilize any electronic system
of communication, such Fund shall be fully responsible for any and
all
15
consequences of the use or misuse of the terminal device, passwords,
access instructions and other means of access to such system(s)
which are utilized by, assigned to or otherwise made available to
the Fund. Each Fund agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or improper
access to or use of such system(s). Custodian shall be fully
protected in acting hereunder upon any instructions, communications,
data or other information received by Custodian by such means as
fully and to the same effect as if delivered to Custodian by written
instrument signed by the requisite authorized representative(s) of
the applicable Fund. Each Fund shall indemnify and hold Custodian
harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability which may be
suffered or incurred by Custodian as a result of the use or misuse,
whether authorized or unauthorized, of any such system(s) by such
Fund or by any person who acquires access to such system(s) through
the terminal device, passwords, access instructions or other means
of access to such system(s) which are utilized by, assigned to or
otherwise made available to the Fund, except to the extent
attributable to any negligence or willful misconduct by Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall at all times use reasonable care and due diligence
and act in good faith in performing its duties under this Agreement.
Custodian shall not be responsible for, and the applicable Fund
shall indemnify and hold Custodian harmless from and against, any
and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability which may be asserted against Custodian,
incurred by Custodian or for which Custodian may be held to be
liable, arising out of or attributable to: 1. All actions taken by
Custodian pursuant to this Agreement or any instructions
provided to it hereunder, provided that Custodian has acted
in good faith and with due diligence and reasonable care;
and
2. The Fund's refusal or failure to comply with the terms of
this Agreement (including without limitation the Fund's
failure to pay or reimburse Custodian under this
indemnification provision), the Fund's negligence or
willful misconduct, or the failure of any representation or
warranty of the Fund hereunder to be and remain true and
correct in all respects at all times.
B. Custodian may request and obtain at the expense of the applicable
Fund the advice and opinion of counsel for such Fund or of its own
counsel with respect to questions or matters
16
of law, and it shall be without liability to such Fund for any
action taken or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that it could
not prudently act according to the instructions of any Fund or the
Fund's accountants or counsel, it may in its discretion, with notice
to the Fund, not act according to such instructions.
C. Custodian may rely upon the advice and statements of any Fund, its
accountants and officers or other authorized individuals, and other
persons believed by it in good faith to be expert in matters upon
which they are consulted, and Custodian shall not be liable for any
actions taken, in good faith, upon such advice and statements.
D. If any Fund requests Custodian in any capacity to take any action
which involves the payment of money by Custodian, or which might
make it or its nominee liable for payment of monies or in any other
way, Custodian shall be indemnified and held harmless by such Fund
against any liability on account of such action; provided, however,
that nothing herein shall obligate Custodian to take any such action
except in its sole discretion.
E. Custodian shall be protected in acting as custodian hereunder upon
any instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to have
been properly executed. Custodian shall be entitled to receive upon
request as conclusive proof of any fact or matter required to be
ascertained from any Fund hereunder a certificate signed by an
officer or designated representative of the Fund. Each Fund shall
also provide Custodian instructions with respect to any matter
concerning this Agreement requested by Custodian.
F. Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any securities purchased by or
for any Fund, the legality of the purchase of any
securities or foreign currency
positions or evidence of ownership required by any Fund to
be received by Custodian, or the propriety of the decision
to purchase or amount paid therefor;
2. The legality of the sale of any securities or foreign
currency positions by or for any Fund, or the propriety of
the amount for which the same are sold;
3. The legality of the issue or sale of any Fund Shares, or
the sufficiency of the amount to be received therefor;
4. The legality of the repurchase or redemption of any Fund
Shares, or the propriety of the amount to be paid
therefore; or
17
5. The legality of the declaration of any dividend by any
Fund, or the legality of the issue of any Fund Shares in
payment of any stock dividend.
G. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the
payment of money to be received by it on behalf of the applicable
Fund until Custodian actually receives such money; provided,
however, that it shall advise such Fund promptly if it fails to
receive any such money in the ordinary course of business and shall
cooperate with the Fund toward the end that such money shall be
received.
H. Except as provided in Section 3.S., Custodian shall not be
responsible for loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other person
with whom Custodian may deal.
I. Custodian shall not be responsible or liable for the failure or
delay in performance of its obligations under this Agreement, or
those of any entity for which it is responsible hereunder, arising
out of or caused, directly or indirectly, by circumstances beyond
the affected entity's reasonable control, including, without
limitation: any interruption, loss or malfunction of any utility,
transportation, or communication service or computer (hardware or
software) services of third parties unrelated to Custodian;
inability to obtain labor, material, equipment or transportation,
or a delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions,
labor disputes, freezes, floods, fires, tornados, acts of God or
public enemy, revolutions, or insurrection.
J. EXCEPT FOR VIOLATIONS OF SECTION 9, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR FAILURE TO
ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THIS
POSSIBILITY THEREOF.
6. COMPENSATION. In consideration for its services hereunder as Custodian and
investment accounting and recordkeeping agent, each Fund will pay to
Custodian such compensation as shall be set forth in a separate fee
schedule to be agreed to by the Funds and Custodian from time to time. A
copy of the initial fee schedule is attached hereto and incorporated herein
by reference. Custodian shall also be entitled to receive, and each Fund
agrees to pay to Custodian, on demand,
18
reimbursement for Custodian's cash disbursements and reasonable
out-of-pocket costs and expenses, including attorney's fees, incurred by
Custodian in connection with the performance of services hereunder.
Custodian may charge such compensation against monies held by it for the
account of the applicable Fund. Custodian will also be entitled to charge
against any monies held by it for the account of the applicable Fund the
amount of any loss, damage, liability, advance, overdraft or expense for
which it shall be entitled to reimbursement from such Fund, including but
not limited to fees and expenses due to Custodian for other services
provided to the Fund by Custodian. Custodian will be entitled to
reimbursement by the Fund for the losses, damages, liabilities, advances,
overdrafts and expenses of subcustodians only to the extent that (i)
Custodian would have been entitled to reimbursement hereunder if it had
incurred the same itself directly, and (ii) Custodian is obligated to
reimburse the subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement shall be for a
period of one year. Thereafter, each Fund and Custodian may terminate the
same by notice in writing, delivered or mailed, postage prepaid, to the
other and received not less than ninety (90) days prior to the date
upon which such termination will take effect. Upon termination of this
Agreement, each applicable Fund will pay Custodian its fees and
compensation due hereunder and its reimbursable disbursements, costs and
expenses paid or incurred to such date and each applicable Fund shall
designate a successor custodian by notice in writing to Custodian by the
termination date. In the event no written order designating a successor
custodian has been delivered to Custodian on or before the date when such
termination becomes effective, then Custodian may, at its option, deliver
the securities, funds and properties of the Fund to a bank or trust
company at the selection of Custodian, and meeting the qualifications for
custodian set forth in the 1940 Act and having not less that Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits,
as shown by its last published report, or apply to a court of competent
jurisdiction for the appointment of a successor custodian or other proper
relief, or take any other lawful action under the circumstances; provided,
however, that the applicable Fund shall reimburse Custodian for its costs
and expenses, including reasonable attorney's fees, incurred in connection
therewith. Custodian will, upon termination of this Agreement and payment
of all sums due to Custodian from each applicable Fund hereunder or
otherwise, deliver to the successor custodian so specified or appointed,
or as specified by the court, at Custodian's office, all securities then
held by Custodian hereunder, duly endorsed and in form for transfer, and
all funds and other properties of each
19
applicable Fund deposited with or held by Custodian hereunder, and
Custodian will co-operate in effecting changes in book-entries at all
Depositories. Upon delivery to a successor custodian or as specified by the
court, Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such successor will be the successor custodian under
this Agreement and will be entitled to reasonable compensation for its
services. In the event that securities, funds and other properties remain
in the possession of the Custodian after the date of termination hereof
owing to failure of any Fund to appoint a successor custodian, the
Custodian shall be entitled to compensation as provided in the then-current
fee schedule hereunder for its services during such period as the Custodian
retains possession of such securities, funds and other properties, and the
provisions of this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
any Fund at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other address
as the Funds may have designated to Custodian in writing, will be deemed to
have been properly given to such Fund hereunder; and notices, requests,
instructions and other writings addressed to Custodian at its offices at
000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Custody
Department, or to such other address as it may have designated to the Funds
in writing, will be deemed to have been properly given to Custodian
hereunder.
9. CONFIDENTIALITY.
A. Each Fund shall preserve the confidentiality of the computerized
investment portfolio and custody recordkeeping and accounting
systems used by Custodian (the "Systems") and the tapes, books,
reference manuals, instructions, records, programs, documentation
and information of, and other materials relevant to, the Systems
and the business of Custodian ("Confidential Information"). Each
Fund agrees that it will not voluntarily disclose any such
Confidential Information to any other person other than its own
employees who reasonably have a need to know such information
pursuant to this Agreement. Each Fund shall return all such
Confidential Information to Custodian upon termination or
expiration of this Agreement.
B. Each Fund has been informed that the Systems are licensed for use by
Custodian from third parties ("Licensors"), and each Fund
acknowledges that Custodian and the Licensors have proprietary
rights in and to the Systems and all other Custodian or Licensor
programs, code,
20
techniques, know-how, data bases, supporting documentation, data
formats, and procedures, including without limitation any changes or
modifications made at the request or expense or both of any Fund
(collectively, the "Protected Information"). Each Fund acknowledges
that the Protected Information constitutes confidential material and
trade secrets of Custodian and the Licensors. Each Fund shall
preserve the confidentiality of the Protected Information, and each
Fund hereby acknowledges that any unauthorized use, misuse,
disclosure or taking of Protected Information, residing or existing
internal or external to a computer, computer system, or computer
network, or the knowing and unauthorized accessing or causing to be
accessed of any computer, computer system, or computer network, may
be subject to civil liabilities and criminal penalties under
applicable law. Each Fund shall so inform employees and agents who
have access to the Protected Information or to any computer
equipment capable of accessing the same. The Licensors are intended
to be and shall be third party beneficiaries of the Funds'
obligations and undertakings contained in this paragraph.
10. MULTIPLE FUNDS AND PORTFOLIOS.
A. Each Fund, and as to any Fund which is comprised of more than one
Portfolio, each Portfolio, shall be regarded for all purposes
hereunder as a separate party apart from each other. Unless the
context otherwise requires,with respect to every transaction covered
by this Agreement, every reference herein to a Fund shall be deemed
to relate solely to the particular Fund, and, if applicable,
Portfolio thereof to which such transaction relates. Under no
circumstances shall the rights, obligations or remedies with
respect to a particular Fund or Portfolio constitute a right,
obligation or remedy applicable to any other. The use of this single
document to memorialize the separate agreement of each Fund is
understood to be for clerical convenience only and shall not
constitute any basis for joining the Funds for any reason.
B. Additional Funds and Portfolios may be added to this Agreement,
provided that Custodian consents to such addition. Rates or charges
for each additional Fund or Portfolio shall be as agreed upon by
Custodian and the applicable Fund in writing. Additional Funds may
be added hereto by execution of instruments amending Exhibit A to
add such Funds thereto.
11. MISCELLANEOUS.
21
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Missouri, without reference to the choice of laws
principles thereof.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, the indemnifications extended
hereunder, and the provisions of Section 9. hereof are intended to
and shall continue after and survive the expiration, termination or
cancellation of this Agreement.
D. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by each party hereto.
E. The failure of any party to insist upon the performance of any terms
or conditions of this Agreement or to enforce any rights resulting
from any breach of any of the terms or conditions of this Agreement,
including the payment of damages, shall not be construed as a
continuing or permanent waiver of any such terms, conditions, rights
or privileges, but the same shall continue and remain in full force
and effect as if no such forbearance or waiver had occurred. No
waiver, release or discharge of any party's rights hereunder shall
be effective unless contained in a written instrument signed by the
party sought to be charged.
F. The captions in the Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
H. If any provision of this Agreement shall be determined to be invalid
or unenforceable, the remaining provisions of this Agreement shall
not be affected thereby, and every provision of this Agreement shall
remain in full force and effect and shall remain enforceable to the
fullest extent permitted by applicable law.
I. This Agreement may not be assigned by any Fund or Custodian without
the prior written consent of the other.
J. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between
Custodian and any Fund or Funds.
K. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by either party hereunder
shall not affect any rights or obligations of the other party
hereunder.
22
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
Title:
EACH REGISTERED INVESTMENT
COMPANY LISTED ON EXHIBIT A
HERETO
By:
Title:
23
EXHIBIT A
LIST OF FUNDS
Bull & Bear Funds I, Inc.:
Bull & Bear U.S. and Overseas Fund
Bull & Bear Funds II, Inc.:
Bull & Bear Dollar Reserves
Bull & Bear Global Income Fund, Inc.
Bull & Bear U.S. Government Securities Fund, Inc.
Bull & Bear Special Equities Fund, Inc.
Bull & Bear Gold Investors Ltd.
Bull & Bear Municipal Income Fund, Inc.
Midas Fund, Inc.
Rockwood Fund, Inc.
