EXHIBIT 7(b)
CUSTODIAN CONTRACT
Between
JANUS ADVISER
and
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN CONTRACT
This contract between State Street Bank and Trust Company, a
Massachusetts trust company, (hereinafter referred to as the "Custodian"), and
Janus Adviser, on behalf of each portfolio listed on Appendix A (each,
hereinafter referred to individually as a "Fund", and collectively as the
"Funds").
WITNESSETH:
WHEREAS, each Fund desires the Custodian to act as custodian for a
limited purpose for certain assets of the Funds, all of which are open-end
management investment companies registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Securities and Exchange Commission, in an order dated
October 11, 1995, and published in Investment Company Act Release No. 21407,
granted an application for exemptive relief, thereby allowing the Funds to
participate in joint trading accounts to be used to enter into short-term
investments; and
WHEREAS, the Funds desire that the Custodian establish one or more
joint trading accounts (a "Joint Account") and hold cash for the Funds in
connection with repurchase transactions and other short- term investments
effected through a Joint Account; and
WHEREAS, other registered open-end management investment companies for
which Janus Capital Management LLC serves as investment adviser (the "Janus
Funds") may, along with the Funds, participate in transactions through a Joint
Account; and
WHEREAS, the Custodian may, from time to time, enter into subcustodian
agreements with the Janus Funds and each of the custodians employed by such
Janus Funds (the "Janus Custodians"); and
WHEREAS, the Funds and the Janus Funds may, from time to time, enter
into one or more written repurchase agreements, pursuant to which one or more of
the Funds and the Janus Funds will agree to purchase and resell, and the sellers
named in such agreements will agree to sell and repurchase through a Joint
Account, certain securities (collectively, the "Repurchase Securities")(such
repurchase agreements being hereinafter referred to collectively, as the
"Repurchase Agreements"); and
WHEREAS, the Funds and the Janus Funds may, from time to time, invest
in other short-term investments through a Joint Account (such investments
hereinafter referred to as the "Short-Term Investments").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian; Establishment of the Joint Account; and
Property to be Held by Custodian
Janus Adviser, on behalf of the Funds, hereby employs and appoints the
Custodian for the limited purpose of transactions concerning Short-Term
Investments in one or more Joint Accounts, subject to the terms and provisions
of this Contract.
Janus Adviser hereby instructs the Custodian to establish a Joint
Account to hold cash for the limited purpose of assisting the Funds to execute
Repurchase Transactions and to invest in Short-Term Investments, and one or more
Joint Accounts to hold any securities representing Short-Term Investments other
than Repurchase Securities ("Short-Term Securities") which are (a) received by
the Custodian as custodian for the Funds, (b) received by the Custodian on
behalf of other Janus Custodians, and (c) received or held by the Custodian as
custodian or subcustodian for other Janus Funds.
The Funds may from time to time deposit cash with the Custodian in. a
Joint Account. The Custodian shall not be responsible for any property of the
Funds held or received by the Funds and not delivered to the Custodian.
2. Duties of the Custodian with Respect to Property of the Funds Held By
the Custodian
2.1 Holding Securities. The Custodian shall not hold in its custody or
deliver out any Repurchase Securities. The Custodian shall hold
Short-Term Securities as follows: (1) in the case of certificated
securities, by physical receipt of the share certificates or other
instruments representing such securities and by segregation of such
certificates or instruments from other assets of the Custodian; and (2)
in the case of securities held in book-entry form, in the Federal
Reserve book-entry system, in a clearing agency which acts as a
securities depository or in another book-entry system for the central
handling of securities, collectively referred to herein as "Securities
System", in accordance with Section 2.6 of this Contract.
2.2 Delivery of Securities. The Custodian shall release and deliver
Short-Term Securities owned by the Funds under this Contract held by
the Custodian or in a Securities System account of the Custodian, its
agents or its subcustodians only upon receipt of Proper Instructions
(as defined below), which may be standing instructions, in the
following cases:
a) Upon sale of such Short-Term Securities for the account of the Funds
and receipt of payment therefore by cash, bank credit, or bank wire
transfer received by the Subcustodian;
b) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.6 of this Contract;
c) In the case of Short-Term Securities held in physical form, in
accordance with "street delivery" custom to a broker or its clearing
agent, against delivery to the Custodian of a receipt for such
Short-Term Securities; or
d) For any other purpose, but only upon receipt of Proper Instructions
specifying the securities to be delivered and naming the person or
persons to whom delivery of such securities shall be made.
2.3 Collection of Income. The Custodian or its agents shall receive from a
Repo Custodian (as defined in Section 2.4 (b) below) the interest and
principal on repurchase transactions for a Fund The Custodian or its
agents shall collect on a timely basis all interest and other payments
with respect to Short-Term Securities held hereunder to which a Fund
shall be entitled if, on the date of payment by the issuer, such
securities are held by the Custodian or its agents, and shall credit
such income, as collected, to the applicable Fund.
2.4 Payment of Fund Monies. Upon receipt of Proper Instructions, which may
be standing instructions, the Custodian shall pay out monies of the
Funds in the following cases only:
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1) Upon the purchase of Short-Term Securities for the account of the Funds
but only:
(a) against the delivery of such Short-Term Securities to the Custodian
in the name or in the name of a nominee of the Custodian or in proper
form for transfer;
(b) in the case of a purchase effected through a Securities System, in
accordance with the provisions of Section 2.6 hereof; or
(c) for transfer to a time deposit account of the Joint Account in any
bank, whether domestic or foreign; such transfer may be effected prior
to receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined herein;
2) In the case of Repurchase Agreements entered into by the Funds:
(a) In the case of Repurchase Agreements entered into between the Funds
and the Custodian, or another bank, or a broker-dealer which is a
member of the National Association of Securities Dealers, Inc.,
provided that payment shall be made by the Custodian, with respect to
Repurchase Securities to be held by the Custodian, only: (i) against
delivery of such Repurchase Securities either in certificate form or
through a transfer of such Repurchase Securities to a customer-only
account of the Custodian on the book-entry records of a Securities
System in accordance with the provisions of Section 2.6 or (ii) against
delivery of the receipt evidencing purchase by the Funds of securities
owned by the Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the Funds; or
(b) To one or more Repo Custodians, if any, appointed by the Fund and
communicated to the Custodian by Proper Instructions, including
Schedule D (as may be amended from time to time) attached to this
Contract, duly executed by an authorized officer of the Fund, for the
purpose of engaging in repurchase agreement transactions, which payment
may be made without contemporaneous receipt by the Custodian of assets
in exchange therefore (a "Free Trade"), and upon which delivery to such
Repo Custodian in accordance with Proper Instructions from the Fund,
the Custodian shall have no further responsibility or obligation to the
Fund with respect to the securities so delivered in a Free Trade,
provided that, in preparing reports, if any, of monies received or paid
out of the Fund or of assets comprising the Fund, the Custodian shall
be entitled to rely upon information received from time to time from
the Repo Custodian and shall not be responsible for the accuracy or
completeness of such information included in the Custodian's reports
until such assets are received by the Custodian;
3) For deposit with Xxxxx Brothers Xxxxxxxx & Co, ("Xxxxx Brothers"), a
custodian for certain assets of the Funds, which deposit may be made
daily and will represent the total principal and accrued interest
allocable to the Funds in a Joint Account by the close of each trading
day; provided, however, that this shall not prevent the Custodian from
netting the transfers of cash between Custodian and Xxxxx Brothers each
day; or
4) For any other proper purpose, but only upon receipt of, Proper
Instructions specifying the amount of such payment and naming the
person or persons to whom such payment is to be made.
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2.5 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.6 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by the Funds in a U.S. Securities
System in compliance with the conditions of Rule 17f-4 of the 1940 Act,
as amended from time to time.
2.7 Proper Instructions. Proper Instructions, which may also -be standing
instructions, as used throughout this Agreement, shall mean
instructions received by the Custodian from a Fund such Fund's
investment manager, or a person or entity duly authorized by either of
them. Such instructions may be in writing signed by the authorized
person or persons or may be in a tested communication or in a
communication utilizing access codes effected between
electro-mechanical or electronic devices or may be by such other means
and utilizing such intermediary systems and utilities as may be agreed
to from time to time by the Custodian and the person or entity giving
such instructions, provided that a Fund has followed any security
procedures agreed to from time to time by such Fund and the Custodian,
including, but not limited to, the security procedures selected by such
Fund in the Funds Transfer Addendum to this Contract. Oral instructions
will be considered Proper Instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Each Fund shall
cause all oral instructions to be confirmed in writing. Each Fund or
such Fund's investment manager shall cause its duly authorized officer
to certify to the Custodian in writing the names and specimen
signatures of persons authorized to give Proper Instructions. The
Custodian shall be entitled to rely upon the identity and authority of
such persons until it receives notice from such Fund to the contrary.
2.8 Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Funds:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Funds;
2) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Funds held by the Custodian except as otherwise
directed by the respective Boards of Trustees of the Funds.
2.9 Evidence of Authority. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of a Fund. The Custodian may receive
and accept a certified copy of a vote of the respective Boards of
Trustees of the Funds as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any
determination or of any action by such Board of Trustees pursuant to
the Declaration of Trust as described in such vote, and such vote may
be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
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3. Records
The Custodian shall create, based on information received from the
Funds' investment adviser(s), and maintain records which reflect at all times
(1) the respective aggregate investment of each Fund in a Joint Account and (2)
each Fund's respective pro rata share of each Repurchase Transaction and each
Short-Term Investment held in a Joint Account.
4. Reports to Funds by Independent Public Accountants
The Custodian shall provide the Funds, at such times as the Funds may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Funds to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
5. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Funds and the Custodian and as initially set forth in the Jumbo Repurchase
Agreement Fee Schedule attached as Schedule B to this Contract.
6. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Custodian and/or the Funds for any action taken or
omitted by it in good faith without negligence or willful misconduct. It shall
be entitled to rely on and may act upon advice of counsel (who may be counsel
for the Custodian and/or the Funds) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence, bad faith or
willful misconduct or the negligence, bad faith or willful misconduct of an
agent, the Custodian shall be without liability to the Funds or the Custodian
for any loss, liability, claim or expense resulting from or caused by; (i)
events or circumstances beyond the reasonable control of the Custodian or
Securities System or any agent or nominee of any of the foregoing, including,
without limitation, nationalization or expropriation, imposition of currency
controls or restrictions, the interruption, suspension or restriction of trading
on or the closure of any securities market, power or other mechanical or
technological failures or interruptions, computer viruses or communications
disruptions, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by Xxxxx
Brothers, the Funds or Janus Capital Management LLC in their instructions to the
Custodian provided such instructions have been in accordance with this Contract;
(iii) the insolvency of or acts or omissions by a Securities System; (iv) any
delay or failure of any broker, agent or intermediary, central bank or other
commercially
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prevalent payment or clearing system to deliver to the Custodian's agent
securities purchased or in the remittance or payment made in connection with
securities sold; (v) any delay or failure of any company, corporation, or other
body in charge of registering or transferring securities in the name of the
Custodian, the Funds, nominees or agents or any consequential losses arising out
of such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vi) delays or
inability to perform its duties due to any disorder in market infrastructure
with respect to any particular security or Securities System; and (vii) any
provision of any present or future law regulation or order of the United States
of America, or any state thereof, or any other country, or political subdivision
thereof or of any court of competent jurisdiction.
If the Funds require the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Funds being liable for the payment of money or incurring liability of some
other form, the Funds, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Funds require the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Funds shall be
security therefor and should the Funds fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of assets
of the Funds to the extent necessary to obtain reimbursement.
7. Effective period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by any party by an instrument in writing delivered or mailed,
certified and postage prepaid to the other parties, such termination to take
effect not sooner than thirty (30) days after the date of such delivery or
mailing; provided, however, that a Fund shall not amend or terminate this
Contract in contravention of any applicable federal or state regulations, or any
provision of its Declaration of Trust, and further, provided that the Funds may
at any time by action of their respective Boards of Trustees immediately
terminate this Contract in the event of the appointment of a conservator or
receiver for the Custodian by the Comptroller of the Currency or upon the
happening of a like event at the direction of an appropriate regulatory agency
or court of competent jurisdiction.
This Contract may be terminated as to one or more Funds (but less than
all Funds) by delivery of an amended Schedule A pursuant to this Article 7. The
execution and delivery of a termination letter with an amended Schedule A which
deleted one or more Funds shall constitute a termination of this Contract only
with respect to such deleted Fund(s) but shall not affect this Contract with
respect to any other Fund. In addition, this Contract shall terminate with
respect to a Fund upon the effective date of the termination of such Fund's
Custodian Agreement with Xxxxx Brothers by which such Xxxxx Brothers ceases to
serve as the custodian for the securities, cash and other assets of the Fund;
the Funds shall notify the Custodian of such termination promptly.
In the event that Janus Adviser desires to add one or more Funds to
this Contract, with respect to which it desires to have the Custodian render
services as custodian under the terms hereof, it shall so notify the Custodian
in writing, which notice shall include an amended Appendix A, and if the
Custodian
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agrees in writing to provide such services, such new Fund or Funds become
subject to this Contract. Appendix A also may be amended from time to time to
delete one or more Funds, by the Fund's delivery of an amended Appendix A to the
Custodian.
Upon termination of this Contract, the Funds shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
9. Successor Custodian
In the event of termination of this Contract, the Custodian will
deliver any assets held by it hereunder to such successor subcustodian as the
Funds shall instruct in a manner to be mutually agreed upon by the parties
hereto or in the absence of such agreement in a reasonable manner. Further in
the event of termination, the Custodian shall be entitled to receive prior to
the delivery of the securities held by it all accrued fees and unreimbursed
expenses the payment of which is contemplated by Article 5 hereof.
10. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Funds may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by all parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of any Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
11. Amendment
Any modification or amendment of the terms of this Contract shall be
agreed to in writing and signed by an authorized officer of each party.
12. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts, without
the application of conflicts of laws principles.
13. Prior Contracts
This Contract constitutes the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and shall supersede and
terminate any previous contracts between the parties on such subject matter.
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14. Counterparts
This Contract may be executed in multiple counterparts, all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative as of
the 14th day of October, 2003.
ATTEST JANUS ADVISER
On Behalf of Its Portfolios
Listed on Appendix A.
/s/ Xxxxxx Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxx
---------------------- -------------------------------
Title: Vice President Title: Vice President
ATTEST STATE STREET BANK AND TRUST COMPANY
_________________________ By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Title: Counsel Title: Executive Vice President
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APPENDIX A
TO
CUSTODIAN CONTRACT
Between
State Street Bank and Trust Company and
Janus Adviser, on behalf of its portfolios
Dated October 14,2003
PORTFOLIOS OF JANUS ADVISER
U.S. VALUE FUND
INTERNATIONAL EQUITY FUND
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