CUSTODY AGREEMENT
Dated September 12, 1995
Between
UMB BANK, N.A.
and
INVESTORS RESEARCH CORPORATION
and
THE TWENTIETH CENTURY MUTUAL FUNDS
Table of Contents
SECTION PAGE
1. APPOINTMENT OF CUSTODIAN 1
2. DEFINITIONS 2
(a) Securities 2
(b) Assets 2
(c) Instructions and Special Instructions 2
3. DELIVERY OF CORPORATE DOCUMENTS 2
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC
SUBCUSTODIAN 3
(a) Safekeeping 4
(b) Manner of Holding Securities 4
(c) Free Delivery of Assets 6
(d) Exchange of Securities 6
(e) Purchases of Assets 6
(f) Sales of Assets 7
(g) Options 7
(h) Futures Contracts 8
(i) Segregated Accounts 9
(j) Depositary Receipts 9
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 9
(l) Interest Bearing Deposits 10
(m) Foreign Exchange Transactions 10
(n) Pledges or Loans of Securities 11
(o) Stock Dividends, Rights, Etc. 12
(p) Routine Dealings 12
(q) Collections 12
(r) Bank Accounts 12
(s) Dividends, Distributions and Redemptions 13
(t) Proceeds from Shares Sold 13
(u) Proxies and Notices; Compliance with the
Shareholders Communication Act of 1985 13
(v) Books and Records 14
(w) Opinion of Fund's Independent Certified
Public Accountants 14
(x) Reports by Independent Certified Public
Accountants 14
(y) Bills and Other Disbursements 14
5. SUBCUSTODIANS 14
(a) Domestic Subcustodians 15
(b) Foreign Subcustodians 15
(c) Interim Subcustodians 16
(d) Special Subcustodians 16
(e) Termination of a Subcustodian 17
(f) Certification Regarding Foreign Subcustodians 17
6. STANDARD OF CARE 17
(a) General Standard of Care 17
SECTION PAGE
(b) Actions Prohibited by Applicable Law, Events
Beyond Custodian's Control, Armed Conflict,
Sovereign Risk, Etc. 17
(c) Liability for Past Records 18
(d) Advice of Counsel 18
(e) Advice of the Funds and Others 18
(f) Instructions Appearing to be Genuine 18
(g) Exceptions from Liability 19
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS 19
(a) Domestic Subcustodians 19
(b) Securities Systems, Interim Subcustodians,
Special Subcustodians, Securities
Depositories and Clearing Agencies 19
(c) Defaults or Insolvencies of Brokers, Banks
Etc. 20
(d) Reimbursement of Expenses 20
8. INDEMNIFICATION 20
(a) Indemnification by Fund 20
(b) Indemnification by Custodian 20
9. ADVANCES 21
10. COMPENSATION 21
11. POWERS OF ATTORNEY 21
12. TERMINATION AND ASSIGNMENT 22
13. ADDITIONAL FUNDS 22
14. NOTICES 22
15. MISCELLANEOUS 23
CUSTODY AGREEMENT
This agreement made as of this 12th day of September 1995, between UMB
Bank, n.a., a national banking association with its principal place of business
located at Kansas City, Missouri (hereinafter "Custodian"), and Investors
Research Corporation (hereinafter "IRC"), and each of the registered investment
companies that have executed the signature page hereof, together with such
additional registered investment companies that shall be made parties to this
Agreement by the execution of a separate signature page hereto (individually, a
"Fund Company" and collectively, the "Fund Companies").
WITNESSETH:
WHEREAS, each Fund Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, IRC is a registered investment adviser and provides, either
directly or through one o more of its affiliates, investment management and
administrative services to the Fund Companies; and
WHEREAS, each Fund Company desires to appoint Custodian as its
custodian for the custody of Assets (as hereinafter defined) owned by the
various series of shares of each such Fund Company which Assets are to be held
in such accounts as such Fund Company may establish from time to time; and
WHEREAS, Custodian is willing to accept such appointment on the terms
and conditions hereof.
NOW, THEREFORE, 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 Company hereby constitutes and appoints the Custodian as
custodian of Assets belonging to the various series of shares of each such Fund
Company which have been or may be from time to time deposited with the Custodian
or any Subcustodian (as defined in Section 5 below) duly appointed as set forth
herein. Custodian accepts such appointment as a custodian and agrees to perform
the duties and responsibilities of Custodian as set forth herein on the
conditions set forth herein. It is understood and agreed to the parties hereto
that wherever in this agreement it is stated or implied that an action is to be
taken or performed by the Fund Companies, that such action shall be taken or
performed by IRC or its affiliates.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings so indicated:
(a) "Security" or "Securities" shall have the same meaning
ascribed to such term under Section 2(36) of the 1940 Act.
1
(b) "Assets" shall mean Securities, monies and other property
held by the Custodian for the benefit of a Fund Company.
(c) (1) "Instructions," as used herein, shall mean: (i) a
tested telex, a written (including, without limitation, facsimile transmission)
request, direction, instruction or certification signed or initialed by or on
behalf of a Fund Company by an Authorized Person (defined in Section 3 below);
(ii) a telephonic or other oral communication from a person the Custodian
reasonably believes to be an Authorized Person; or (iii) a communication
effected directly between an electro-mechanical or electronic device or system
(including, without limitation, computers) on behalf of a Fund Company.
Instructions in the form of oral communications shall be confirmed by the
appropriate Fund Company by tested telex or in writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way affect
any action taken by the Custodian in reliance upon such oral Instructions prior
to the Custodian's receipt of such confirmation. Each Fund Company authorizes
the Custodian to record any and all telephonic or other oral Instructions
communicated to the Custodian.
(2) "Special Instructions," as used herein, shall mean
Instructions countersigned or confirmed in writing by the Treasurer or any
Controller of a Fund Company or any other person designated by the Treasurer of
such Fund Company in writing, which countersignature or confirmation shall be
included on the same instrument containing the Instructions or on a separate
instrument relating thereto.
(3) Instructions and Special Instructions shall be
delivered to the Custodian at the address and/or telephone, facsimile
transmission or telex number agreed upon from time to time by the Custodian and
each Fund Company.
(4) Where appropriate, Instructions and Special
Instructions shall be continuing instructions.
(d) "Domestic Subcustodian" shall mean those entities
specifically identified as such on Appendix A attached hereto and such other
entities as may be appointed "Domestic Subcustodians" pursuant to Section 5(a)
below.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that its execution
does not violate any of the provisions of its respective charter, articles of
incorporation, articles of association or bylaws and all required corporate
action to authorize the execution and delivery of this Agreement has been taken.
Each Fund Company has furnished the Custodian with copies, properly
certified or authenticated, with all amendments or supplements thereto, of the
following documents:
2
(a) Resolutions of the Board of Directors of the Fund Companies
appointing the Custodian and approving the form of this
Agreement; and
(b) Each Fund Company's current prospectus and statements of
additional information.
IRC will furnish the Custodian with copies of any updates, amendments or
supplements to each Fund Company's prospectus and SAI upon request of the
foregoing documents.
In addition, each Fund Company has delivered or will promptly deliver
to the Custodian, copies of the Resolution(s) of its Board of Directors or
Trustees and all amendments or supplements thereto, properly certified or
authenticated, designating certain officers or employees of IRC or its
affiliates who will have continuing authority to certify to the Custodian: (a)
the names, titles, signatures and scope of authority of all persons authorized
to give Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of each Fund Company, and (b) the names,
titles and signatures of those persons authorized to countersign or confirm
Special Instructions on behalf of each Fund Company (in both cases collectively,
the "Authorized Persons" and individually, an "Authorized Person"). Such
Resolutions and certificates may be accepted and relied upon by the Custodian as
conclusive evidence of the facts set forth therein and shall be considered to be
in full force and effect until revoked by telephone by any such officer or
employee or by any Authorized Person, or until delivery to the Custodian of a
similar Resolution or certificate to the contrary, whichever first occurs. Upon
delivery of a certificate which deletes or does not include the name(s) of a
person previously authorized to give Instructions or to countersign or confirm
Special Instructions, such persons shall no longer be considered an Authorized
Person authorized to give Instructions or to countersign or confirm Special
Instructions. Unless the certificate specifically requires that the approval of
anyone else will first have been obtained, the Custodian will be under no
obligation to inquire into the right of the person giving such Instructions or
Special Instructions to do so. Notwithstanding any of the foregoing, no
Instructions or Special Instructions received by the Custodian from a Fund
Company will be deemed to authorize or permit any director, trustee, officer,
employee, or agent of such Fund Company or of IRC to withdraw any of the Assets
of such Fund Company for his or her own personal use or receipt or to be an
account not registered in the name of the Fund Companies upon the mere receipt
of such authorization, Special Instructions or Instructions from such director,
trustee, officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.
The Custodian shall have and perform the powers and duties hereinafter
set forth in this Section 4. For purposes of this Section 4 all references to
powers and duties of the "Custodian" shall also refer to any Domestic
Subcustodian, whichever first occurs.
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(a) Safekeeping.
The Custodian will keep safely the Assets of each Fund Company
which are delivered to it from time to time. The Custodian shall not be
responsible for any property of a Fund held or received by such Fund and not
delivered to the Custodian or Subcustodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times in accordance with
Instructions received from IRC hold Securities of each Fund Company either: (i)
by physical possession of the share certificates or other instruments
representing such Securities in registered or bearer form; or (ii) in book-entry
form by a Securities System (as hereinafter defined) in accordance with the
provisions of sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio Securities
which have been delivered to it in physical form, by registering the same in the
name of the Custodian or its nominee, for whose actions Custodian shall be fully
responsible. Upon the receipt of Instructions, the Custodian shall hold such
Securities in street certificate form, so called, with or without any indication
of fiduciary capacity. However, unless it receives Instructions to the contrary,
the Custodian will register all such portfolio Securities in the name of the
Custodian's authorized nominee. All such Securities shall be held in an account
of the Custodian containing only assets of the appropriate Fund Company or only
assets held by the Custodian as a fiduciary, provided that the records of the
Custodian shall accurately reflect at all times the Fund Company or other
customer for which such Securities are held in such accounts and the respective
interests therein.
(3) Upon receipt of Instructions, the Custodian will deposit
and/or maintain domestic Securities owned by a Fund Company in, and each Fund
Company hereby approves use of: (a) The Depository Trust Company; (b) The
Participants Trust Company; and (c) any book-entry system as provided in (i)
Subpart O of Treasury Circular Xx. 000, 00 XXX 306.115, (ii) Subpart B of
Treasury Circular Public Debt Series Xx. 00-00, 00 XXX 350.2, or (iii) the
book-entry regulations of federal agencies substantially in the form of 31 CRT
306.115. Upon the receipt of Special Instructions, the Custodian will deposit
and/or maintain domestic Securities owned by a Fund Company in any other
domestic clearing agency registered with the Securities and Exchange Commission
("SEC") under Section 17A of the Securities Exchange Act of 1934 (or as may
otherwise be authorized by the SEC to serve in the capacity of depository or
clearing agent for the Securities or other assets of investment companies) which
acts as a Securities depository. Each of the foregoing shall be referred to in
this Agreement as a "Securities System," and all such Securities Systems shall
be listed on the attached Appendix A. Use of a Securities System shall be in
accordance with applicable Federal Reserve Board and SEC rules and regulations,
if any, and subject to the following provisions:
4
(i) The Custodian may deposit the Securities directly or
through one or more agents or Subcustodians which are
also qualified to act as custodians for investment
companies.
(ii) The Custodian shall deposit and/or maintain the
Securities in a Securities System, provided that such
Securities are represented in an account ("Account")
of the Custodian in the Securities System that
includes only assets held by the Custodian as a
fiduciary, custodian or otherwise for customers.
(iii) The books and records of the Custodian shall at all
times identify those Securities belonging to any one
or more of the Fund Companies that are maintained in
a Securities System.
(iv) The Custodian shall pay for Securities purchased for the
account of a Fund Company only upon (a) receipt of advice
from the Securities System that such Securities have been
transferred to the Account of the Custodian in accordance
with the rules of the Securities System, and (b) the making
of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Fund Company.
The Custodian shall transfer Securities sold for the account
of a Fund Company only upon (a) receipt of advice from the
Securities System that payment for such Securities has been
transferred to the Account of the Custodian in accordance
with the rules of the Securities System, and (b) the making
of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Fund Company.
Copies of all advices from the Securities System relating to
transfers of Securities for the account of a Fund Company
shall be maintained for such Fund Company by the Custodian.
The Custodian shall deliver to a Fund Company on the next
succeeding business day daily transaction reports which
shall include each day's transactions in the Securities
System for the account of such Fund Company. Such
transaction reports shall be delivered to such Fund Company
or any agent designated by such Fund Company pursuant to
Instructions, by computer or in such other manner as such
Fund Company and Custodian may agree.
(v) The Custodian shall provide such Fund Company with
reports obtained by the Custodian or any Subcustodian
with respect to a Securities System's accounting
system, internal accounting control and procedures
for safeguarding Securities deposited in the
Securities System.
(vi) Upon receipt of Special Instructions, the Custodian
shall terminate the use of any Securities System on
behalf of a Fund Company as promptly as practicable
and shall take all actions reasonably practicable to
safeguard the Securities of such Fund Company
maintained with such Securities System.
5
(c) Free Delivery of Assets.
Notwithstanding any other provision of this Agreement and
except as provided in Section 3 hereof, the Custodian, upon receipt of Special
Instructions, will undertake to make free delivery of Assets, provided such
Assets are on hand and available, in connection with a Fund Company's
transactions and to transfer such Assets to such broker, dealer, Subcustodian,
bank agent, Securities System or otherwise as specified in such Special
Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will exchange
portfolio Securities held by it for a Fund for other Securities or cash paid in
connection with any reorganization, recapitalization, merger, consolidation, or
conversion of convertible Securities, and will tender any such portfolio
Securities in accordance with the terms of any reorganization or protective
plan.
Without Instructions, the Custodian is authorized to exchange
Securities held by it in temporary form for Securities in definitive form, to
surrender Securities for transfer into a name or nominee name as permitted in
Section 4(b)(2), to effect an exchange of shares in a stock split or when the
par value of the stock is changed, to sell any fractional shares, and, upon
receiving payment therefor, to surrender bonds or other Securities held by it at
maturity or call.
(e) Purchases of Assets.
(1) Securities Purchases. In accordance with Instructions, the
Custodian shall, with respect to a purchase of Securities, pay for such
Securities out of monies held for a Fund Company's account for which the
purchase was made, but only insofar as monies are available therein for such
purpose, and receive the portfolio Securities so purchased. Unless the Custodian
has received Special Instructions to the contrary, such payment will be made
only upon receipt of Securities by the Custodian, a clearing corporation of a
national Securities exchange of which the Custodian is a member, or a Securities
System in accordance with the provisions of Section 4(b)(3) hereof.
Notwithstanding the foregoing, upon receipt of Instructions: (i) in connection
with a repurchase agreement, the Custodian may release funds to a Securities
System prior to the receipt of advice from the Securities System that the
Securities underlying such repurchase agreement have been transferred by
book-entry into the Account maintained with such Securities System by the
Custodian, provided that the Custodian's instructions to the Securities System
require that the Securities System may make payment of such funds to the other
party to the repurchase agreement only upon transfer by book-entry of the
Securities underlying the repurchase agreement into such Account; (ii) in the
case of Interest Bearing Deposits (defined in Section 4(e) below), currency
deposits, and other deposits, foreign exchange transactions, futures contracts
or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m) hereof, the
Custodian may make payment therefor before receipt of an advice of transaction;
and (iii) in the case of Securities as to which payment for the Security and
receipt of the instrument evidencing the Security
6
are under generally accepted trade practice or the terms of the instrument
representing the Security expected to take place in different locations or
through separate parties, such as commercial paper which is indexed to foreign
currency exchange rates, derivatives and similar Securities, the Custodian may
make payment for such Securities prior to delivery thereof in accordance with
such generally accepted trade practice or the terms of the instrument
representing such Security.
(2) Other Assets Purchased. Upon receipt of Instructions and
except as otherwise provided herein, the Custodian shall pay for and receive
other Assets for the account of a Fund Company as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with Instructions, the
Custodian will, with respect to a sale, deliver or cause to be delivered the
Securities thus designated as sold to the broker or other person specified in
the Instructions relating to such sale. Unless the Custodian has received
Special Instructions to the contrary, such delivery shall be made only upon
receipt of payment therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b) credit to the account
of the Custodian with a clearing corporation of a national Securities exchange
of which the Custodian is a member; or (c) credit to the Account of the
Custodian with a Securities System, in accordance with the provisions of Section
4(b)(3) hereof. Notwithstanding the foregoing, Securities held in physical form
may be delivered and paid for in accordance with "street delivery custom" to a
broker or its clearing agent, against delivery to the Custodian of a receipt for
such Securities, provided that the Custodian shall have taken reasonable steps
to ensure prompt collection of the payment for, or return of, such Securities by
the broker or its clearing agent, and provided further that the Custodian shall
not be responsible for the selection of or the failure or inability to perform
of such broker or its clearing agent or for any related loss arising from
delivery or custody of such Securities prior to receiving payment therefor.
(2) Other Assets Sold. Upon receipt of Instructions and except
as otherwise provided herein, the Custodian shall receive payment for and
deliver other Assets for the account of a Fund Company as provided in
Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to the purchase of
an option or sale of a covered call option, the Custodian shall: (a) receive and
retain confirmations or other documents, if any, evidencing the purchase or
writing of the option by a Fund Company; (b) if the transaction involves the
sale of a covered call option, deposit and maintain in a segregated account the
Securities (either physically or by book-entry in a Securities System) subject
to the covered call option written on behalf of such Fund; and (c) pay, release
and/or transfer such Securities, cash or other Assets in accordance with any
notices or other communications evidencing the expiration,
7
termination or exercise of such options which are furnished to the Custodian by
the Options Clearing Corporation (the "OCC"), the securities or options
exchanges on which such options were traded, or such other organization as may
be responsible for handling such option transactions.
(2) Upon receipt of Instructions relating to the sale of a
naked option (including stock index and commodity options), the Custodian, the
appropriate Fund Company and the broker-dealer shall enter into an agreement to
comply with the rules of the OCC or of any registered national securities
exchange or similar organization(s). Pursuant to that agreement and such Fund
Company's Instructions, the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the writing of the option;
(b) deposit and maintain in a segregated account, Securities (either physically
or by book-entry in a Securities System), cash and/or other Assets in an amount
specified in the Instructions; and (c) pay, release and/or transfer such
Securities, cash or other Assets in accordance with any such agreement and with
any notices or other communications evidencing the expiration, termination or
exercise of such option which are furnished to the Custodian by the OCC, the
securities or options exchanges on which such options were traded, or such other
organization as may be responsible for handling such option transactions. The
appropriate Fund Company and the broker-dealer shall be responsible for
determining the quality and quantity of assets held in any segregated account
established in compliance with applicable margin maintenance requirements and
the performance of other terms of any option contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall enter into a
futures margin procedural agreement among the appropriate Fund Company, the
Custodian and the designated futures commission merchant (a "Procedural
Agreement"). Under the Procedural Agreement the Custodian shall: (a) receive and
retain confirmations, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by such Fund Company; (b) deposit
and maintain in a segregated account cash, Securities and/or other Assets
designated as initial, maintenance or variation "margin" deposits intended to
secure such Fund Company's performance of its obligations under any futures
contracts purchased or sold, or any options on futures contracts written by such
Fund Company, in accordance with the provisions of any Procedural Agreement
designed to comply with the provisions of the Commodity Futures Trading
Commission and/or any commodity exchange or contract market (such as the Chicago
Board of Trade), the Securities Exchange Commission ("SEC"), or any similar
organization(s), regarding such margin deposits; and (c) release Assets from
and/or transfer Assets into such margin accounts only in accordance with any
such Procedural Agreements. The appropriate Fund Company and such futures
commission merchant shall be responsible for determining the type and amount of
Assets held in the segregated account or paid to the broker-dealer in compliance
with applicable margin maintenance requirements and the performance of any
futures contract or option on a futures contract in accordance with its terms.
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(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall establish
and maintain on its books a segregated account or accounts for and on behalf of
a Fund Company, into which account or accounts may be transferred Assets of such
Fund Company, including Securities maintained by the Custodian in a Securities
System pursuant to Paragraph (b)(3) of this Section 4, said account or accounts
to be maintained (i) for the purposes set forth in Sections 4(g), 4(h) and 4(n)
and (ii) for the purpose of compliance by such Fund Company with the procedures
required by the SEC Investment Company Act Release Number 10666 or any
subsequent release or releases relating to the maintenance of segregated
accounts by registered investment companies, or (iii) for such other purposes as
may be set forth, from time to time, in Special Instructions. The Custodian
shall not be responsible for the determination of the type or amount of Assets
to be held in any segregated account referred to in this paragraph, or for
compliance by the Fund Companies with required procedures noted in (ii) above.
(j) Depositary Receipts.
Upon receipt of Instructions, the Custodian shall exchange, or
cause to be exchanged, Securities held on behalf of a Fund Company for American
Depositary Receipts or International Depositary Receipts (hereinafter referred
to, collectively, as "ADRs") representing such Securities. To effect such
exchange, the Custodian or Subcustodian shall surrender the Securities to the
depository of the issuer of the applicable ADR, against a written receipt
therefor adequately describing such Securities and written evidence satisfactory
to the Custodian or Subcustodian surrendering the same that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
Securities in the name of the Custodian or a nominee of the Custodian, for
delivery in accordance with such instructions.
Upon receipt of Instructions, the Custodian shall surrender or
cause to be surrendered ADRs to the issuer thereof, against a written receipt
therefor adequately describing the ADRs surrendered and written evidence
satisfactory to the organization surrendering the same that the issuer of the
ADRs has acknowledged receipt of instructions to cause its depository to deliver
the Securities underlying such ADRs in accordance with such instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
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 the purpose of exercise
or sale, provided that the new Securities, cash or other Assets, if any,
acquired as a result of such actions 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.
9
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action, unless otherwise
directed to the contrary in Instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership, and shall notify the appropriate Fund Company of
such action in writing by facsimile transmission or in such other manner as such
Fund Company and Custodian may agree in writing.
IRC agrees that if it gives an Instruction for the performance
of an act after the deadline prescribed by the Custodian for the performance of
such act, the Custodian shall use reasonable efforts to perform such act, but
the Fund Company shall hold the Custodian harmless from any adverse consequences
in connection with any failure to effect such Instructions. The Custodian agrees
to establish reasonable deadlines by which Instructions must be given.
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the Custodian to
purchase interest bearing fixed term and call deposits (hereinafter referred to,
collectively, as "Interest Bearing Deposits") for the account of a Fund Company,
the Custodian shall purchase such Interest Bearing Deposits in the name of such
Fund Company with such banks or trust companies, including the Custodian, any
Subcustodian or any subsidiary or affiliate of the Custodian (hereinafter
referred to as "Banking Institutions"), and in such amounts as such Fund Company
may direct pursuant to Instructions. Such Interest Bearing Deposits may be
denominated in U.S. dollars or other currencies, as such Fund Company may
determine and direct pursuant to Instructions. The responsibilities of the
Custodian to a Fund Company for Interest Bearing Deposits issued by the
Custodian shall be that of a U.S. bank for a similar deposit. With respect to
Interest Bearing Deposits other than those issued by the Custodian, (a) the
Custodian shall be responsible for the collection of income and the transmission
of cash to and from such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or for the failure of such
Banking Institution to pay upon demand.
(m) Foreign Exchange Transactions.
(1) Each Fund hereby appoints the Custodian
as its agent in the execution of certain currency exchange transactions. The
Custodian agrees to provide exchange rate and U.S. Dollar information, in
writing, to the Funds. Such information shall be supplied by the Custodian at
least by the business day prior to the value date of the foreign exchange
transaction, provided that the Custodian receives the request for such
information at least two business days prior to the value date of the
transaction.
(2) Upon receipt of Instructions, the Custodian
shall settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf of and for the account of a
Fund with such currency brokers or Banking Institutions as such Fund may
determine and direct pursuant to Instructions.
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(3) Each Fund Company accepts full
responsibility for its use of third party foreign exchange brokers and for
execution of said foreign exchange contracts and understands that the Fund
Company shall be responsible for any and all costs and interest charges which
may be incurred as a result of the failure or delay of its third party broker to
deliver foreign exchange. The Custodian shall have no responsibility or
liability with respect to the selection of the currency brokers or Banking
Institutions with which a Fund Company deals or the performance of such brokers
or Banking Institutions.
(4) Notwithstanding anything to the contrary
contained herein, upon receipt of Instructions the Custodian may, in connection
with a foreign exchange contract, make free outgoing payments of cash in the
form of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue currency
completing such contract has been delivered or received.
(5) The Custodian shall not be obligated to
enter into foreign exchange transactions as principal. However, if the Custodian
has made available to a Fund Company its services as a principal in foreign
exchange transactions and subject to any separate agreement between the parties
relating to such transactions, the Custodian shall enter into foreign exchange
contracts or options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of the Fund Company, with the
Custodian as principal.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from a Fund
Company, the Custodian will release or cause to be released Securities held in
custody to the pledgees designated in such Instructions by way of pledge or
hypothecation to secure loans incurred by such Fund Company with various lenders
including but not limited to the Custodian; provided, however, that the
Securities shall be released only upon payment to the Custodian of the monies
borrowed, except that in cases where additional collateral is required to secure
existing borrowings, further Securities may be released or delivered, or caused
to be released or delivered for that purpose upon receipt of Instructions. Upon
receipt of Instructions, the Custodian will pay, but only from funds available
for such purpose, any such loan upon re-delivery to it of the Securities pledged
or hypothecated therefor and upon surrender of the note or notes evidencing such
loan. In lieu of delivering collateral to a pledgee, the Custodian, on the
receipt of Instructions, shall transfer the pledged Securities to a segregated
account for the benefit of the pledgee.
(2) Upon receipt of Special Instructions, and execution of a
separate Securities Lending Agreement, the Custodian will release Securities
held in custody to the borrower designated in such Instructions and may, except
as otherwise provided below, deliver such Securities prior to the receipt of
collateral, if any, for such borrowing, provided that, in case of loans of
Securities held by a Securities System that are secured by cash collateral, the
Custodian's instructions to the Securities System shall require that the
Securities System deliver the Securities of the appropriate
11
Fund to the borrower thereof only upon receipt of the collateral for such
borrowing. The Custodian shall have no responsibility or liability for any loss
arising from the delivery of Securities prior to the receipt of collateral. Upon
receipt of Instructions and the loaned Securities, the Custodian will release
the collateral to the borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all stock dividends,
rights, and other items of like nature and, upon receipt of Instructions, take
action with respect to the same as directed in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all routine and
mechanical matters in accordance with industry standards in connection with the
sale, exchange, substitution, purchase, transfer, or other dealings with
Securities or other property of each Fund Company except as may be otherwise
provided in this Agreement or directed from time to time by Instructions from
any particular Fund Company.
(q) Collections.
The Custodian shall (a) collect amounts due and payable to
each Fund Company with respect to portfolio Securities and other Assets; (b)
promptly credit to the account of each Fund Company all income and other
payments relating to portfolio Securities and other Assets held by the Custodian
hereunder upon Custodian's receipt of such income or payments or as otherwise
agreed in writing by the Custodian and any particular Fund Company; (c) promptly
endorse and deliver any instruments required to effect such collection; and (d)
promptly execute ownership and other certificates and affidavits for all
federal, state, local and foreign tax purposes in connection with receipt of
income or other payments with respect to portfolio Securities and other Assets,
or in connection with the transfer of such Securities or other Assets; provided,
however, that with respect to portfolio Securities registered in so-called
street name, or physical Securities with variable interest rates, the Custodian
shall use its best efforts to collect amounts due and payable to any such Fund
Company. The Custodian shall notify a Fund Company in writing by facsimile
transmission or in such other manner as such Fund Company and Custodian may
agree in writing if any amount payable with respect to portfolio Securities or
other Assets is not received by the Custodian when due. The Custodian shall not
be responsible for the collection of amounts due and payable with respect to
portfolio Securities or other Assets that are in default.
(f) Bank Accounts.
Upon Instructions, the Custodian shall open and operate a bank
account or accounts on the books of the Custodian; provided that such bank
account(s) shall be in the name of the Custodian or a nominee thereof, for the
account of one or more of the Fund Companies, and shall be subject only to
12
draft or order of the Custodian; and provided further, that the records of the
Custodian shall identify the amount of Assets of each Fund Company on deposit in
such bank account(s) and the responsibility of the Custodian with respect to the
portion of such bank account(s) attributable to each Fund Company shall be that
of a U.S. bank for a similar amount deposited in a similar account.
(s) Dividends, Distributions and Redemptions.
To enable each Fund Company to pay dividends or other
distributions to shareholders of each such Fund Company and to make payment to
shareholders who have requested repurchase or redemption of their shares of each
such Fund Company (collectively, the "Shares"), the Custodian shall release cash
or Securities insofar as available. In the case of cash, the Custodian shall,
upon the receipt of Instructions, transfer such funds by check or wire transfer
to any account at any bank or trust company designated by each such Fund Company
in such Instructions. In the case of Securities, the Custodian shall, upon the
receipt of Special Instructions, make such transfer to any entity or account
designated by each such Fund Company in such Special Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments
received for shares issued or sold from time to time by each Fund Company, and
shall credit such funds to the account of the appropriate Fund Company. The
Custodian shall notify the appropriate Fund Company of Custodian's receipt of
cash in payment for shares issued by such Fund Company by facsimile transmission
or in such other manner as such Fund Company and the Custodian shall agree. Upon
receipt of Instructions, the Custodian shall: (a) deliver all federal funds
received by the Custodian in payment for shares as may be set forth in such
Instructions and at a time agreed upon between the Custodian and such Fund
Company; and (b) make federal funds available to a Fund Company as of specified
times agreed upon from time to time by such Fund Company and the Custodian, in
the amount of checks received in payment for shares which are deposited to the
accounts of such Fund Company.
(u) Proxies and Notices; Compliance with the Shareholders
Communication Act of 1985.
The Custodian shall deliver or cause to be delivered to the
appropriate Fund Company all forms of proxies, all notices of meetings, and any
other notices or announcements affecting or relating to Securities owned by such
Fund Company that are received by the Custodian, any Subcustodian, or any
nominee of either of them, and, upon receipt of Instructions, the Custodian
shall execute and deliver, or cause such Subcustodian or nominee to execute and
deliver, such proxies or other authorizations as may be required. Except as
directed pursuant to Instructions, neither the Custodian nor any Subcustodian or
nominee shall vote upon any such Securities, or execute any proxy to vote
thereon, or give any consent or take any other action with respect thereto.
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The Custodian will not release the identity of any Fund
Company to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and any such Fund Company unless IRC directs the Custodian
otherwise in writing.
(v) Books and Records.
The Custodian shall maintain such records relating to its
activities under this Agreement as are required to be maintained by Rule 31a-1
under the Investment Company Act of 1940 ("xxx 0000 Xxx") and to preserve them
for the periods prescribed in Rule 31a-2 under the 1940 Act. These records shall
be open for inspection by duly authorized officers, employees or agents
(including independent public accountants) of the appropriate Fund during normal
business hours of the Custodian.
The Custodian shall provide accountings relating to its
activities under this Agreement as shall be agreed upon by each Fund Company and
the Custodian.
(w) Opinion of Fund Companies' Independent Certified
Public Accountants.
The Custodian shall take all reasonable action as each Fund
Company may request to obtain from year to year favorable opinions from each
such Fund Companies' independent certified public accountants with respect to
the Custodian's activities hereunder and in connection with the preparation of
each such Fund Companies' periodic reports to the SEC and with respect to any
other requirements of the SEC.
(x) Reports by Independent Certified Public Accountants.
At the request of a Fund Company, the Custodian shall deliver
to such Fund Company a written report prepared by the Custodian's independent
certified public accountants with respect to the services provided by the
Custodian under this Agreement, including, without limitation, the Custodian's
accounting system, internal accounting control and procedures for safeguarding
cash, Securities and other Assets, including cash, Securities and other Assets
deposited and/or maintained in a Securities System or with a Subcustodian. Such
report shall be of sufficient scope and in sufficient detail as may reasonably
be required by such Fund Company and as may reasonably be obtained by the
Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall pay, or
cause to be paid, all bills, statements, or other obligations of a Fund Company.
5. SUBCUSTODIANS.
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From time to time, in accordance with the relevant provisions
of this Agreement, the Custodian may appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Special Subcustodians, or Interim Subcustodians (as each
are hereinafter defined) to act on behalf of any one or more of the Fund
Companies. A Domestic Subcustodian, in accordance with the provisions of this
Agreement, may also appoint a Foreign Subcustodian, Special Subcustodian, or
Interim Subcustodian to act on behalf of any one or more of the Fund Companies.
For purposes of this Agreement, all Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians and Interim Subcustodians shall be referred
to collectively as "Subcustodians."
(a) Domestic Subcustodians.
Subject to the prior written approval of IRC and the Funds,
the Custodian may appoint any bank as defined in Section 2(a)(5) of the 1940 Act
or any trust company or other entity, any of which meet the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act for the Custodian on behalf of any one or more Funds as a
subcustodian for purposes of holding Assets of such Fund(s) and performing other
functions of the Custodian within the United States (a "Domestic Subcustodian").
The Custodian's appointment of any such Domestic Subcustodian shall not be
effective without such prior written approval of IRC and the Fund Companies. In
connection with the appointment of any Domestic Subcustodian, the Custodian
shall enter into a subcustodian agreement with the proposed Domestic
Subcustodian in form and substance approved by IRC and each Fund Company. The
Custodian shall not consent to the amendment of any subcustodian agreement
entered into with a Domestic Subcustodian that materially affects IRC and Fund
Company's rights under such agreement, except upon prior written approval of IRC
and each Fund Company pursuant to Special Instructions. Each such duly approved
Domestic Subcustodian shall be listed on Appendix A attached hereto, as it may
be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a Domestic
Subcustodian to appoint, any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the 1940
Act and the rules and regulations thereunder to act for the Custodian on behalf
of any one or more Funds as a subcustodian or sub-subcustodian (if appointed by
a Domestic Subcustodian) for purposes of holding Assets of the Fund(s) and
performing other functions of the Custodian in countries other than the United
States of America (hereinafter referred to as a "Foreign Subcustodian" in the
context of either a subcustodian or a sub-subcustodian); provided that the
Custodian shall have obtained written confirmation from each Fund Company of the
approval of the Board of Directors or other governing body of each such Fund
(which approval may be withheld in the sole discretion of such Board of
Directors or other governing body or entity) with respect to (i) the identity of
any proposed Foreign Subcustodian (including branch designation), (ii) the
country or countries in which, and the securities depositories or clearing
agencies (hereinafter "Securities Depositories and Clearing Agencies"), if any,
through which, the Custodian or any proposed
15
Foreign Subcustodian is authorized to hold Securities and other Assets of each
such Fund Company, and (iii) the form and terms of the subcustodian agreement to
be entered into with such proposed Foreign Subcustodian. Each such duly approved
Foreign Subcustodian and the countries where and the Securities Depositories and
Clearing Agencies through which they may hold Securities and other Assets of the
Fund Companies shall be listed on Appendix A attached hereto, as it may be
amended, from time to time. Each Fund Company shall be responsible for informing
the Custodian sufficiently in advance of a proposed investment which is to be
held in a country in which no Foreign Subcustodian is authorized to act, in
order that there shall be sufficient time for the Custodian, or any Domestic
Subcustodian, to effect the appropriate arrangements with a proposed Foreign
Subcustodian, including obtaining approval as provided in this Section 5(b). In
connection with the appointment of any Foreign Subcustodian, the Custodian
shall, or shall cause the Domestic Subcustodian to, enter into a subcustodian
agreement with the Foreign Subcustodian in form and substance approved by IRC
and each such Fund Company. The Custodian shall not consent to the amendment of,
and shall cause any Domestic Subcustodian not to consent to the amendment of,
any agreement entered into with a Foreign Subcustodian, which materially affects
any Fund Company's rights under such agreement, except upon prior written
approval of such Fund Company pursuant to Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that a Fund
Company shall invest in an Asset to be held in a country in which no Foreign
Subcustodian is authorized to act, the Custodian shall notify such Fund Company
in writing by facsimile transmission or in such other manner as such Fund
Company and the Custodian shall agree in writing of the unavailability of an
approved Foreign Subcustodian in such country; and upon the receipt of Special
Instructions from such Fund Company, the Custodian shall, or shall cause its
Domestic Subcustodian to, appoint or approve an entity (referred to herein as an
"Interim Subcustodian") designated in such Special Instructions to hold such
Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the Custodian shall, on
behalf of a Fund Company, appoint one or more banks, trust companies or other
entities designated in such Special Instructions to act for the Custodian on
behalf of such Fund Company as a subcustodian 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; (ii) providing
depository and clearing agency services with respect to certain variable rate
demand note Securities, (iii) providing depository and clearing agency services
with respect to dollar denominated Securities, and (iv) effecting any other
transactions designated by such Fund Company in such Special Instructions. Each
such designated subcustodian (hereinafter referred to as a "Special
Subcustodian") shall be listed on Appendix A attached hereto, as it may be
amended from time to time. In connection with the appointment of any Special
Subcustodian, the Custodian shall enter into a subcustodian agreement
16
with the Special Subcustodian in form and substance approved by the appropriate
Fund Company in Special Instructions. The Custodian shall not amend any
subcustodian agreement entered into with a Special Subcustodian, or waive any
rights under such agreement, except upon prior approval pursuant to Special
Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion upon
notification to the appropriate Fund Companies, terminate any Subcustodian of
such Fund(s) in accordance with the termination provisions under the applicable
subcustodian agreement, and upon the receipt of Special Instructions, the
Custodian will terminate any Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement. Notwithstanding the
above, the Custodian may not terminate Xxxxxx Xxxxxxx Trust Company as a
Domestic Subcustodian under this Agreement unless 60 days prior written notice
is provided to IRC and the Fund Companies.
(f) Certification Regarding Foreign Subcustodians.
Upon request of a Fund Company, the Custodian shall deliver to
such Fund Company a certificate stating: (i) the identity of each Foreign
Subcustodian then acting on behalf of the Custodian; (ii) the countries in which
and the Securities Depositories and Clearing Agencies through which each such
Foreign Subcustodian is then holding cash, Securities and other Assets of such
Fund Company; and (iii) such other information as may be requested by such Fund
Company, and as the Custodian shall be reasonably able to obtain, to evidence
compliance with rules and regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to IRC and each Fund Company for
all losses, damages and reasonable costs and expenses (including reasonable
attorneys fees) suffered or incurred by IRC and each Fund Company in connection
with this Agreement resulting from the negligence or willful misconduct of the
Custodian.
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Sovereign Risk, Etc.
In no event shall the Custodian incur liability hereunder (i)
if the Custodian or any Subcustodian or Securities System, or any subcustodian,
Securities System, Securities Depository or Clearing Agency utilized by the
Custodian or any such Subcustodian, or any nominee of the Custodian or any
Subcustodian (individually, a "Person") is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Agreement provides
shall be performed or omitted to be performed, by reason of: (a) any provision
of any present or future law or regulation or order of the United States of
America, or any state thereof, or of any foreign country, or
17
political subdivision thereof or of any court of competent jurisdiction (other
than a federal bankruptcy court) (and neither the Custodian nor any other Person
shall be obligated to take any action contrary thereto); or (b) any event beyond
the control of the Custodian or other Person such as armed conflict, riots,
labor disputes of third-party vendors, Fund Company equipment or transmission
failures, natural disasters, or failure of the mails, transportation,
communications or power supply; or (ii) for any loss, damage, cost or expense
resulting from "Sovereign Risk." A "Sovereign Risk" shall mean nationalization,
expropriation, currency devaluation, revaluation or fluctuation, confiscation,
seizure, cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, taxes, levies or other charges affecting a Fund's Assets; or
acts of armed conflict, terrorism, insurrection or revolution.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic Subcustodian shall have
any liability in respect of any loss, damage or expense suffered by a Fund
Company, insofar as such loss, damage or expense arises from the performance of
the Custodian or any Domestic Subcustodian as a result of reasonable reliance
upon records that were maintained for such Fund Company by entities other than
the Custodian or any Domestic Subcustodian prior to the Custodian's employment
hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians shall be entitled
to receive and act upon the written advice of counsel of its own choosing on all
matters (which may include counsel for the Fund Companies). The Custodian and
all Domestic Subcustodians shall be without liability for any actions taken or
omitted in good faith pursuant to the written advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may rely upon the
advice of any Fund and upon statements of such Fund's accountants and other
persons affiliated with the Fund Companies reasonably believed by it in good
faith to be expert in matters upon which they are consulted, and neither the
Custodian nor any Domestic Subcustodian shall be liable for any actions taken or
omitted, reasonably and in good faith, pursuant to such written advice or
statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall be fully
protected and indemnified in acting as a custodian hereunder upon any
Resolutions of the Board of Directors or Trustees, Instructions, Special
Instructions, advice, notice, request, consent, certificate, instrument or paper
appearing to it to be genuine and to have been properly executed and
18
shall, unless otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained from any Fund
Company hereunder a certificate signed by any officer of such Fund authorized to
countersign or confirm Special Instructions.
(g) Exceptions from Liability.
Without limiting the generality of any other provisions
hereof, neither the Custodian nor any Domestic Subcustodian shall be under any
duty or obligation to inquire into, nor be liable for:
(i) the validity of the issue of any Securities purchased
by or for any Fund Company, the legality of the
purchase thereof or evidence of ownership required to
be received by any such Fund Company, or the
propriety of the decision to purchase or amount paid
therefor;
(ii) the legality of the sale of any Securities by or for any
Fund Company, or the propriety of the amount for which the
same were sold; or
(iii) any other expenditures, encumbrances of Securities,
borrowings or similar actions with respect to any Fund
Company's Assets;
and may, until notified to the contrary, presume that all Instructions or
Special Instructions received by it are not in conflict with or in any way
contrary to any provisions of any such Fund Company's Declaration of Trust,
Partnership Agreement, Articles of Incorporation or By-Laws or votes or
proceedings of the shareholders, trustees, partners or directors of any such
Fund Company, or any such Fund Company's currently effective Registration
Statement on file with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic Subcustodians and Foreign Subcustodian
The Custodian shall be liable for the acts or omissions of any
Domestic Subcustodian and Foreign Subcustodian to the same extent as if such
actions or omissions were performed by the Custodian itself.
(b) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities Depositories and Clearing Agencies.
The Custodian shall not be liable to any Fund Company for any
loss, damage or expense suffered or incurred by such Fund resulting from or
occasioned by the actions or omissions of a Securities System, Interim
Subcustodian, Special Subcustodian, or Securities Depository and Clearing Agency
unless such loss, damage or expense is caused by, or results from, the
negligence or willful misconduct of the Custodian.
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(c) Defaults or Insolvencies of Brokers, Banks, Etc.
The Custodian shall not be liable for any loss, damage or
expense suffered or incurred by any Fund Company resulting from or occasioned by
the actions, omissions, neglects, defaults or insolvency of any broker, bank,
trust company or any other person with whom the Custodian may deal (other than
any of such entities acting as a Subcustodian, Securities System or Securities
Depository and Clearing Agency, for whose actions the liability of the Custodian
is set out elsewhere in this Agreement) unless such loss, damage or expense is
caused by, or results from, the gross negligence or willful misconduct of the
Custodian.
(d) Reimbursement of Expenses.
IRC agrees to reimburse the Custodian for all reasonable
out-of-pocket expenses incurred by the Custodian in connection with this
Agreement, but excluding salaries and overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by IRC.
Subject to the limitations set forth in this Agreement, IRC
agrees to indemnify and hold harmless the Custodian and its nominees from all
losses, damages and expenses (including reasonable attorneys' fees) suffered or
incurred by the Custodian or its nominee caused by or arising from actions taken
by the Custodian, its employees or agents in the performance of its duties and
obligations under this Agreement, including, but not limited to, any
indemnification obligations undertaken by the Custodian under any relevant
subcustodian agreement, the form of which has been approved by IRC; provided,
however, that such indemnity shall not apply to the extent the Custodian is
liable under Sections 6 or 7 hereof.
If any Fund Company requires the Custodian to take any action
with respect to Securities, which action involves the payment of money or which
may, in the opinion of the Custodian, result in the Custodian or its nominee
assigned to such Fund Company being liable for the payment of money or incurring
liability of some other form, such Fund Company, 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.
(b) Indemnification by Custodian.
Subject to the limitations set forth in this Agreement and in
addition to the obligations provided in Sections 6 and 7, the Custodian agrees
to indemnify and hold harmless by IRC and each Fund Company from all losses,
damages and expenses suffered or incurred that is caused by the negligence or
willful misconduct of the Custodian or any Subcustodian.
20
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian or
any Subcustodian, Securities System, or Securities Depository or Clearing Agency
acting either directly or indirectly under agreement with the Custodian (each of
which for purposes of this Section 9 shall be referred to as "Custodian"), makes
any payment or transfer of funds on behalf of any Fund Company as to which there
would be, at the close of business on the date of such payment or transfer,
insufficient funds held by the Custodian on behalf of any such Fund Company, the
Custodian may, in its discretion without further Instructions, provide an
advance ("Advance") to any such Fund Company in an amount sufficient to allow
the completion of the transaction by reason of which such payment or transfer of
funds is to be made. In addition, in the event the Custodian is directed by
Instructions to make any payment or transfer of funds on behalf of any Fund
Company as to which it is subsequently determined that such Fund Company has
overdrawn its cash account with the Custodian as of the close of business on the
date of such payment or transfer, said overdraft shall constitute an Advance.
Any Advance shall be payable by the Fund Company on behalf of which the Advance
was made on demand by Custodian, unless otherwise agreed by such Fund Company
and the Custodian, and, as an overdraft charge, shall accrue interest from the
date of the Advance to the date of payment by such Fund Company to the Custodian
at a rate agreed upon in writing from time to time by the Custodian and such
Fund Company. It is understood that any transaction in respect of which the
Custodian shall have made an Advance, including but not limited to a foreign
exchange contract or transaction in respect of which the Custodian is not acting
as a principal, is for the account of and at the risk of the Fund Company on
behalf of which the Advance was made, and not, by reason of such Advance, deemed
to be a transaction undertaken by the Custodian for its own account and risk.
The Custodian and each of the Fund Companies that are parties to this Agreement
acknowledge that the purpose of Advances is to provide for the prompt delivery
in accordance with the settlement terms of such transactions or to meet
emergency expenses not reasonably foreseeable by a Fund Company. The Custodian
shall promptly notify the appropriate Fund Company of any Advance. Such
notification shall be sent by facsimile transmission or in such other manner as
such Fund Company and the Custodian may agree. The Custodian shall have a lien
on the property in the custody accounts, in an amount not greater than 110% of
the amount of an advance to secure payment of any such advance.
10. COMPENSATION.
IRC will pay to the Custodian such compensation as is agreed
to in writing by the Custodian and IRC from time to time. Such compensation,
together with all amounts for which the Custodian is to be reimbursed in
accordance with Section 7(e), shall be billed to IRC and paid in cash to the
Custodian.
11. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the Custodian such
proxies, powers of attorney or other instruments as may be required in
21
connection with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement.
12. TERMINATION AND ASSIGNMENT.
Any Fund Company or the Custodian may terminate this Agreement
by notice in writing, delivered or mailed, postage prepaid (certified mail,
return receipt requested) to the other not less than 60 days prior to the date
upon which such termination shall take effect. Upon termination of this
Agreement, IRC shall pay to the Custodian such fees as may be due the Custodian
hereunder as well as its reimbursable disbursements, costs and expenses paid or
incurred. Upon termination of this Agreement, the Custodian shall deliver, at
the terminating party's expense, all Assets held by it hereunder to the
appropriate Fund Company or as otherwise designated by such Fund Company by
Special Instructions. Upon such delivery, the Custodian shall have no further
obligations or liabilities under this Agreement except as to the final
resolution of matters relating to activity occurring prior to the effective date
of termination.
This Agreement may not be assigned by the Custodian or any
Fund Company without the respective consent of the other, duly authorized by a
resolution by its Board of Directors or Trustees.
13. ADDITIONAL FUNDS.
Additional Fund Companies may become party to this Agreement
after the date hereof by an instrument in writing to such effect signed by such
Fund Company or Companies and the Custodian. If this Agreement is terminated as
to one or more of the Fund Companies (but less than all of the Fund Companies)
or if an additional Fund Company or Companies shall become a party to this
Agreement, there shall be delivered to each party an Appendix B or an amended
Appendix B, signed by each of the additional Fund Companies (if any) and each of
the remaining Fund Companies as well as the Custodian, deleting or adding such
Fund Company or Companies, as the case may be. The termination of this Agreement
as to less than all of the Fund Companies shall not affect the obligations of
the Custodian and the remaining Fund Companies hereunder as set forth on the
signature page hereto and in Appendix B as revised from time to time.
14. NOTICES.
As to IRC and each Fund Company, notices, requests,
instructions and other writings delivered to Investors Research Corporation,
0000 Xxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: General Counsel,
postage prepaid, or to such other address as any particular Fund Company may
have designated to the Custodian in writing, shall be deemed to have been
properly delivered or given to IRC and the Fund Companies.
Notices, requests, instructions and other writings delivered
to the Securities Administration Department of the Custodian at its office at
928
22
Grand Avenue, Kansas City, Missouri, or mailed postage prepaid, to the
Custodian's Securities Xxxxxxxxxxxxxx Xxxxxxxxxx, Xxxx Xxxxxx Xxx 000, Xxxxxx
Xxxx, Xxxxxxxx 00000, or to such other addresses as the Custodian may have
designated to each Fund Company in writing, shall be deemed to have been
properly delivered or given to the Custodian hereunder; provided, however, that
procedures for the delivery of Instructions and Special Instructions shall be
governed by Section 2(c) hereof.
15. MISCELLANEOUS.
(a) This Agreement is executed and delivered in the State
of Missouri and shall be governed by the laws of such state.
(b) All of the terms and provisions of this Agreement
shall be binding upon, and inure to the benefit of, and be enforceable by the
respective successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be amended,
modified or waived, in any manner except in writing, properly executed by both
parties hereto; provided, however, Appendix A may be amended from time to time
as Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians, and
Securities Depositories and Clearing Agencies are approved or terminated
according to the terms of this Agreement.
(d) The captions in this Agreement are included for
convenience of reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(e) This Agreement shall be effective as of the date of
execution hereof.
(f) This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(g) The following terms are defined terms within the meaning
of this Agreement, and the definitions thereof are found in the following
sections of the Agreement:
23
Term Section
Account 4(b)(3)(ii)
ADR's 4(j)
Advance 9
Assets 2
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
OCC 4(g)(2)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2
Securities Depositories and
Clearing Agencies 5(b)
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2
Special Subcustodian 5(d)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this Agreement is held
to be illegal, in conflict with any law or otherwise invalid by any court of
competent jurisdiction, the remaining portion or portions shall be considered
severable and shall not be affected, and the rights and obligations of the
parties shall be construed and enforced as if this Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
(i) This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof, and
accordingly supersedes, as of the effective date of this Agreement, any
custodian agreement heretofore in effect between the Fund Companies and the
Custodian.
24
IN WITNESS WHEREOF, the parties hereto have caused this Custody
Agreement to be executed by their respective duly authorized officers.
ATTEST: INVESTORS RESEARCH CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive V.P. & General
Counsel
Date:
ATTEST: UMB BANK, N.A.
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: SVP
Date: 9-12-95
25
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
Xxxxxx Xxxxxxx Trust Company (Foreign Securities Only)
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRY FOREIGN SUBCUSTODIANS CENTRAL DEPOSITORY
Argentina Citibank Caja de Valores
Australia Australia and New Zealand Bank CHESS
Austria Creditanstalt Bankverein OKB
Bangladesh Standard Chartered Bank N/A
Belgium Banque Bruxelles Xxxxxxx CIK
Botswana Barclays Bank of Botswana N/A
Brazil Banco de Boston BOVESPA
Rio De Janeiro Stock
Exchange
Canada Toronto Dominion Bank CDS
Chile Citibank N.A. Depositorio Central
de Valores
China Hongkong & Shanghai Bank Corp.
Shenzhen Exchange: Citibank, N.A.
Standard Chartered Bank
Hongkong & Shanghai
Bank Corp.
Shanghai Exchange: Shanghai Exchange
Colombia Cititrust N/A
Czech Republic ING Bank SCP
Denmark Den Danske Bank VP
Finland Union Bank of Finland N/A
France Banque Indosuez SICOVAM
Germany BHF Bank DKV
Ghana Barclays Bank of Ghana N/A
Greece Citibank N.A. N/A
26
Hong Kong Hongkong & Shanghai Bank Corp. CCASS
Hungary Euroclear (see Austria) OKB
Citibank Budapest KELER
India Standard Chartered Bank N/A
Indonesia Hongkong & Shanghai Bank Corp. N/A
Ireland Allied Irish Bank N/A
Israel Bank Leumi SECH
Italy Barclays Bank Monte Titoli S.p.A.
Japan Xxxxxx Xxxxxxx International JASDEC
Mutual Fund Clients: Mitsubishi Bank Ltd.
Jordan Arab Bank ple N/A
Kenya Barclays Bank of Kenya N/A
Korea Standard Chartered Bank KCD
Luxembourg Euroclear/Bankque Bruxelles
Xxxxxxx N/A
Malaysia Oversea Chinese Banking Corp. MCD
Mauritius Hongkong & Shanghai Bank Corp. N/A
Mexico Citibank N.A. S.D. Indeval
Morocco Banque Commerciale du Maroc N/A
Netherlands ABN Amro Bank NECIGEF
New Zealand Australia and New Zealand Bank AUSTRACLEAR
Norway Den Norske Bank VPS
Pakistan Standard Chartered Bank SCD
Papua New Guinea Australia and New Zealand Bank N/A
(see Australia)
Peru Citibank N.A. Caja de Valores
Phillippines Hongkong & Shanghai Bank Corp. N/A
Poland Citibank S.A. NDS
Portugal Banco Comercial Portugues N/A
Singapore Oversea Chinese Banking Corp. CDP
South Africa First National Bank of Southern
Africa N/A
Spain Banco Santander SCLV
Sri Lanka Hongkong & Shanghai Bank Corp. CDS
Swaziland Barclays Bank of Swaziland N/A
Sweden Svenska Handelsbanken VPS
Switzerland Bank Leu SEGA
Taiwan Hongkong & Shanghai Bank Corp. TSCD
Thailand Standard Chartered Bank TSD
Turkey Citibank N.A. N/A
United Kingdom Barclays Bank PLC N/A
USA DTC DTC
Chemical Bank N/A
Uruguay Citibank N.A. N/A
Venezuela Citibank N.A. N/A
Zambia Barclays Bank of Zambia N/A
Zimbabwe Barclays Bank of Zimbabwe N/A
27
Investors Research Corporation UMB Bank, n.a.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxx
Name: Name: Xxxxx Xxxx
Title: Title: SVP
Date: Date: 9-12-95
28
APPENDIX B
CUSTODY AGREEMENT
The following open-end management investment companies ("Funds") are
hereby made parties to the Custody Agreement dated September 12, 1995, with UMB
Bank, n.a. ("Custodian") and Investors Research Corporation, and agree to be
bound by all the terms and conditions contained in said Agreement:
LIST OF FUNDS
Twentieth Century Growth Investors
Twentieth Century Select Investors
Twentieth Century Ultra Investors
Twentieth Century Vista Investors
Twentieth Century Giftrust Investors
Twentieth Century Heritage Investors
Twentieth Century Balanced Investors
Twentieth Century Equity Investors
Twentieth Century Value Investors
Twentieth Century International Equity Income
Twentieth Century International Emerging Growth
TCI Growth
TCI Balanced
TCI Advantage
TCI International
ATTEST: INVESTORS RESEARCH CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name:
Title:
Date:
ATTEST: UMB BANK, N.A.
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: SVP
Date: 9-12-95
29
