CUSTODY AGREEMENT
Dated January 1, 1995
As amended September 24, 1998
Between
UMB BANK, N.A.
and
THE SECURITY FUNDS
TABLE OF CONTENTS
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions 1
(a) Securities 1
(b) Assets 1
(c) Instructions and Special Instructions 1
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic Subcustodian 2
(a) Safekeeping 3
(b) Manner of Holding Securities 3
(c) Free Delivery of Assets 4
(d) Exchange of Securities 4
(e) Purchases of Assets 5
(f) Sales of Assets 5
(g) Options 6
(h) Futures Contracts 6
(i) Segregated Accounts 6
(j) Depositary Receipts 7
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 7
(l) Interest Bearing Deposits 7
(m) Foreign Exchange Transactions 8
(n) Pledges or Loans of Securities 8
(o) Stock Dividends, Rights, Etc. 9
(p) Routine Dealings 9
(q) Collections 9
(r) Bank Accounts 9
(s) Dividends, Distributions and Redemptions 9
(t) Proceeds from Shares Sold 10
(u) Proxies and Notices; Compliance with the Shareholders 10
Communication Act of 1985
(v) Books and Records 10
(w) Opinion of Fund's Independent Certified Public 10
Accountants
(x) Reports by Independent Certified Public Accountants 10
(y) Bills and Others Disbursements 11
5. Subcustodians 11
(a) Domestic Subcustodians 11
(b) Foreign Subcustodians 11
(c) Interim Subcustodians 12
(d) Special Subcustodians 12
(e) Termination of a Subcustodian 12
(f) Certification Regarding Foreign Subcustodians 12
6. Standard of Care 12
(a) General Standard of Care 12
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Armed Conflict, Sovereign Risk, etc. 12
(c) Liability for Past Records 13
(d) Advice of Counsel 13
(e) Advice of the Fund and Others 13
(f) Instructions Appearing to be Genuine 13
(g) Exceptions from Liability 13
7. Liability of the Custodian for Actions of Others 14
(a) Domestic Subcustodians 14
(b) Liability for Acts and Omissions of Foreign 14
Subcustodians
(c) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities Depositories and Clearing 14
Agencies
(d) Defaults or Insolvency's of Brokers, Banks, Etc. 14
(e) Reimbursement of Expenses 14
8. Indemnification 14
(a) Indemnification by Fund 14
(b) Indemnification by Custodian 15
9. Advances 15
10. Liens 15
11. Compensation 16
12. Powers of Attorney 16
13. Termination and Assignment 16
14. Additional Funds 16
15. Notices 16
16. Miscellaneous 17
CUSTODY AGREEMENT
This agreement made as of this 1st day of January, 1995, as amended September
24, 1998, between UMB Bank, n.a., a national banking association with its
principal place of business located in Kansas City, Missouri (hereinafter
"Custodian"), and each of the Funds which have executed the signature page
hereof, together with such additional Funds which shall be made parties to this
Agreement by the execution of a separate signature page hereto (individually, a
"Fund" and collectively, the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as its custodian for the
custody of Assets (as hereinafter defined) owned by such Fund which Assets are
to be held in such accounts as such Fund 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 hereby constitutes and appoints the Custodian as custodian of
Assets belonging to each such Fund which have been or may be from time to time
deposited with the Custodian. 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.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the meanings
so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds, bills, rights,
script, warrants, interim certificates, registered investment company shares and
all negotiable or nonnegotiable paper commonly known as Securities and other
instruments or obligations.
(b) "Assets" shall mean Securities, monies and other property held by the
Custodian for the benefit of a Fund.
(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 by an Authorized Person; (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.
Instructions in the form of oral communications shall be confirmed by the
appropriate Fund 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 authorizes the Custodian to
record any and all telephonic or other oral Instructions communicated to the
Custodian.
(c)(2) "Special Instructions", as used herein, shall mean Instructions
countersigned or confirmed in writing by the Treasurer or any Assistant
Treasurer of a Fund or any other person designated by the Treasurer of such Fund
in writing, which countersignature or confirmation shall be included on the same
instrument containing the Instructions or on a separate instrument relating
thereto.
(c)(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.
(c)(4) Where appropriate, Instructions and Special Instructions shall be
continuing instructions.
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 has furnished the Custodian with copies, properly certified or
authenticated, with all amendments or supplements thereto, of the following
documents:
(a) Certificate of Incorporation (or equivalent document) of the Fund as in
effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing the
Custodian and approving the form of this Agreement; and
(d) The Fund's current prospectus and statements of additional information.
Each Fund shall promptly furnish the Custodian with copies of any updates,
amendments or supplements to the foregoing documents.
In addition, each Fund 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 each such Fund 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, and (b) the names, titles and signatures of those
persons authorized to countersign or confirm Special Instructions on behalf of
each Fund (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
delivery to the Custodian of a similar Resolution or certificate to the
contrary. 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 will be deemed to authorize or permit any director, trustee,
officer, employee, or agent of such Fund to withdraw any of the Assets of such
Fund 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.
Except for Assets held by any Subcustodian appointed pursuant to Sections
5(b), (c), or (d) of this Agreement, 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 appointed pursuant to Section 5(a).
(a) SAFEKEEPING.
The Custodian will keep safely the Assets of each Fund 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.
(b) MANNER OF HOLDING SECURITIES.
(1) The Custodian shall at all times hold Securities of each Fund
either: (i) by physical possession of the share certificates or other
instruments representing such Securities in registered or bearer form; (ii) in
book-entry form by a Securities System (as hereinafter defined) in accordance
with the provisions of sub-paragraph (3) below; or (iii) with the transfer
agents for other registered investment companies (in the case of registered
investment company shares owned by a Fund) in accordance with the provisions of
sub-paragraph (4) 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 appropriate Fund or its nominee, or in the name of the Custodian or its
nominee, for whose actions such Fund and Custodian, respectively, 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 or only assets
held by the Custodian as a fiduciary, provided that the records of the Custodian
shall indicate at all times the Fund or other customer for which such Securities
are held in such accounts and the respective interests therein.
(3) The Custodian may deposit and/or maintain domestic Securities owned
by a Fund in, and each Fund 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 CFR 306.115. Upon the receipt of Special Instructions, the Custodian may
deposit and/or maintain domestic Securities owned by a Fund 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:
(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 Funds which are
maintained in a Securities System.
(iv) The Custodian shall pay for Securities purchased for the
account of a Fund 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. The Custodian shall transfer Securities sold for the
account of a Fund 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. Copies of all advices from the Securities
System relating to transfers of Securities for the account of a Fund shall be
maintained for such Fund by the Custodian. The Custodian shall deliver to a Fund
on the next succeeding business day, daily transaction reports that shall
include each day's transactions in the Securities System for the account of such
Fund. Such transaction reports shall be delivered to such Fund or any agent
designated by such Fund pursuant to Instructions, by computer or in such other
manner as such Fund and Custodian may agree.
(v) The Custodian shall, if requested by a Fund pursuant to
Instructions, provide such Fund 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 as promptly as
practicable and shall take all actions reasonably practicable to safeguard the
Securities of such Fund maintained with such Securities System.
(4) The Custodian may hold shares of other registered investment
companies ("Underlying Funds") which are owned by a Fund with the transfer
agents for such Underlying Funds. In maintaining shares of Underlying Funds with
such transfer agents, each Fund investing in such shares and the Custodian shall
adhere to the following procedures designed to comply with the requirements of
Rule 17f-4 of the 1940 Act:
(i) The Custodian may deposit the shares directly or through one or
more agents or Subcustodians which are also qualified to act as custodians for
investment companies.
(ii) The Custodian shall hold the shares in accounts with the
transfer agents of the Underlying Funds, provided such accounts are maintained
by such transfer agents as segregated accounts containing only assets held for
the Custodian as Custodian of a Fund.
(iii) The books and records of the Custodian shall at all times
identify those shares of Underlying Funds belonging to one or more Funds which
are held by the transfer agents of such Underlying Funds.
(iv) The Custodian shall provide notice to the Funds of all
transfers to or from the account of a Fund held at the transfer agent of an
Underlying Fund.
(v) The Custodian shall, if reasonably requested by a Fund pursuant
to Instructions, provide such Fund with reports obtained by the Custodian or any
Subcustodian with respect to the internal accounting control maintained by the
transfer agent for an Underlying Fund.
(c) FREE DELIVERY OF ASSETS.
Notwithstanding any other provision of this Agreement and except as provided
in Sections 3 and 4 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'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 deposit any such 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'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, 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; (iii) in the case of Securities as to which payment for the
Security and receipt of the instrument evidencing the Security 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; and (iv) in the case of shares of Underlying Funds maintained with
transfer agents for such Underlying Funds pursuant to Section 4(b)(4) hereof,
payment for shares purchased shall be in accordance with the procedures of such
transfer agent.
(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 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: (i) 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; and
(ii) in the case of shares of Underlying Funds maintained with transfer agents
for such Underlying Funds pursuant to Section 4(b)(4) hereof, delivery of shares
sold shall be in accordance with the procedures of such transfer agent.
(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 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; (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, 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 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
organizations(s). Pursuant to that agreement and such Fund'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; 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 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, 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; (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's performance of its
obligations under any futures contracts purchased or sold, or any options on
futures contracts written by such Fund, 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), 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 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.
(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, into
which account or accounts may be transferred Assets of such Fund, including
Securities maintained by the Custodian in a Securities System pursuant to
Paragraph (b)(3) of this Section 4 and shares maintained by the Custodian with
the transfer agents for Underlying Funds pursuant to Paragraph (b)(4) 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 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 with required procedures noted in (ii)
above.
(j) DEPOSITARY RECEIPTS.
Upon receipt of Instructions, the Custodian shall surrender or cause to be
surrendered Securities to the depositary used for such Securities by an issuer
of American Depositary Receipts or International Depositary Receipts
(hereinafter referred to, collectively, as "ADRs"), against a written receipt
therefor adequately describing such Securities and written evidence satisfactory
to the organization 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.
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 of such action in writing by
facsimile transmission or in such other manner as such Fund and Custodian may
agree in writing.
The Fund agrees that if it gives an Instruction for the performance of an act
on the last permissible date of a period established by any optional offer or on
the last permissible date for the performance of such act, the Fund shall hold
the Bank harmless from any adverse consequences in connection with acting upon
or failing to act upon such Instructions.
(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, the Custodian shall
purchase such Interest Bearing Deposits in the name of such Fund 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 may direct pursuant to
Instructions. Such Interest Bearing Deposits may be denominated in U.S. dollars
or other currencies, as such Fund may determine and direct pursuant to
Instructions. The responsibilities of the Custodian to a Fund 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.
(l) Each Fund may from time to time appoint the Custodian as its agent
in the execution of currency exchange transactions. The Custodian agrees to
provide exchange rate and U.S. Dollar information, electronically or in writing,
to the Funds prior to the value date of said foreign exchange transaction. The
Fund agrees to provide the Custodian with information necessary to complete the
foreign exchange transaction two business days prior to the value date of said
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. If, in its Instructions, a Fund does not direct the
Custodian to utilize a particular currency broker or Banking Institution, the
Custodian is authorized to select such currency broker or Banking Institution as
it deems appropriate to execute the Fund's foreign currency transaction.
(3) Each Fund 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 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 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 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, with the Custodian as principal.
(n) PLEDGES OR LOANS OF SECURITIES.
(1) Upon receipt of Instructions from a Fund, 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 with various lenders including but not limited to UMB Bank, n.a.;
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 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 except as may be otherwise provided in this Agreement or
directed from time to time by Instructions from any particular Fund. The
Custodian may also make payments to itself or others from the Assets for
disbursements and out-of-pocket expenses incidental to handling Securities or
other similar items relating to its duties under this Agreement, provided that
all such payments shall be accounted for to the appropriate Fund.
(q) COLLECTIONS.
The Custodian shall (a) collect amounts due and payable to each Fund with
respect to portfolio Securities and other Assets; (b) promptly credit to the
account of each Fund 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; (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. The Custodian shall
notify a Fund in writing by facsimile transmission or in such other manner as
such Fund 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.
(r) 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 Funds, and shall be subject only to draft or order of the Custodian. The
responsibilities of the Custodian to any one or more such Funds for deposits
accepted on the Custodian's books shall be that of a U.S. bank for a similar
deposit.
(s) DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS.
To enable each Fund to pay dividends or other distributions to shareholders
of each such Fund and to make payment to shareholders who have requested
repurchase or redemption of their shares of each such Fund (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 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 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, and shall credit such
funds to the account of the appropriate Fund. The Custodian shall notify the
appropriate Fund of Custodian's receipt of cash in payment for shares issued by
such Fund by facsimile transmission or in such other manner as such Fund 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; and (b) make federal funds available to a Fund as of
specified times agreed upon from time to time by such Fund and the Custodian, in
the amount of checks received in payment for shares which are deposited to the
accounts of such Fund.
(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
all forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to Securities owned by such Fund 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.
The Custodian will not release the identity of any Fund 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 unless a particular Fund 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 and the Custodian.
(w) OPINION OF FUND'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The Custodian shall take all reasonable action as each Fund may request to
obtain from year to year favorable opinions from each such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder and in connection with the preparation of each such Fund's 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, the Custodian shall deliver to such Fund 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, with a transfer agent for an Underlying Fund or with a
Subcustodian. Such report shall be of sufficient scope and in sufficient detail
as may reasonably be required by such Fund 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.
5. SUBCUSTODIANS.
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 Funds. 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 Funds. 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.
The Custodian may, at any time and from time to time, 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"). Each Fund shall approve in writing
the appointment of the proposed Domestic Subcustodian; and the Custodian's
appointment of any such Domestic Subcustodian shall not be effective without
such prior written approval of the Fund(s). 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 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 Foreign Subcustodian is authorized to hold Securities
and other Assets of each such Fund, 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(s) shall be listed on Appendix
A attached hereto, as it may be amended, from time to time. Each Fund 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 each such Fund. 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's rights under such agreement, except upon prior
written approval of such Fund pursuant to Special Instructions.
(c) INTERIM SUBCUSTODIANS.
Notwithstanding the foregoing, in the event that a Fund 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 in writing by facsimile transmission
or in such other manner as such Fund 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, 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, 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 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 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 with the Special Subcustodian in form and
substance approved by the appropriate Fund 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(s), 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.
(f) CERTIFICATION REGARDING FOREIGN SUBCUSTODIANS.
Upon request of a Fund, the Custodian shall deliver to such Fund 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; and (iii) such
other information as may be requested by such Fund, 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 a Fund for all losses, damages and
reasonable costs and expenses suffered or incurred by such Fund resulting from
the negligence or willful misfeasance of the Custodian; provided, however, in no
event shall the Custodian be liable for special, indirect or consequential
damages arising under or in connection with this Agreement.
(b) ACTIONS PROHIBITED BY APPLICABLE LAW, EVENTS BEYOND CUSTODIAN'S CONTROL,
SOVEREIGN RISK, ETC.
In no event shall the Custodian or any Domestic Subcustodian incur liability
hereunder (i) if the Custodian or any Subcustodian or Securities System, or any
subcustodian, transfer agent, 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 political subdivision thereof or of any court of
competent jurisdiction (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, strikes,
lockouts, labor disputes, 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; or any other act or event beyond the
Custodian's or such other Person's control.
(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, insofar as such
loss, damage or expense arises from the performance of the Custodian or any
Domestic Subcustodian in reliance upon records that were maintained for such
Fund 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 advice of counsel of its own choosing on all matters. The Custodian and
all Domestic Subcustodians shall be without liability for any actions taken or
omitted in good faith pursuant to the 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 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, in good faith, pursuant to such 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 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 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, the legality of the purchase thereof or evidence of ownership required to
be received by any such Fund, 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, 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'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'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, or any such
Fund's currently effective Registration Statement on file with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) DOMESTIC SUBCUSTODIANS
The Custodian shall be liable for the acts or omissions of any Domestic
Subcustodian to the same extent as if such actions or omissions were performed
by the Custodian itself.
(b) LIABILITY FOR ACTS AND OMISSIONS OF FOREIGN SUBCUSTODIANS.
The Custodian shall be liable to a Fund for any loss or damage to such Fund
caused by or resulting from the acts or omissions of any Foreign Subcustodian to
the extent that, under the terms set forth in the subcustodian agreement between
the Custodian or a Domestic Subcustodian and such Foreign Subcustodian, the
Foreign Subcustodian has failed to perform in accordance with the standard of
conduct imposed under such subcustodian agreement and the Custodian or Domestic
Subcustodian recovers from the Foreign Subcustodian under the applicable
subcustodian agreement.
(c) SECURITIES SYSTEMS, TRANSFER AGENTS FOR UNDERLYING FUNDS, INTERIM
SUBCUSTODIANS, SPECIAL SUBCUSTODIANS, SECURITIES DEPOSITORIES AND CLEARING
AGENCIES.
The Custodian shall not be liable to any Fund 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, transfer agent for an Underlying Fund, 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 misfeasance of the Custodian.
(d) DEFAULTS OR INSOLVENCY'S OF BROKERS, BANKS, ETC.
The Custodian shall not be liable for any loss, damage or expense suffered or
incurred by any Fund 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 negligence or willful misfeasance of the Custodian.
(e) REIMBURSEMENT OF EXPENSES.
Each Fund agrees to reimburse the Custodian for all out-of-pocket expenses
incurred by the Custodian in connection with this Agreement, but excluding
salaries and usual overhead expenses.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY FUND.
Subject to the limitations set forth in this Agreement, each Fund agrees to
indemnify and hold harmless the Custodian and its nominees from all losses,
damages and expenses (including 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; provided, however, that such indemnity shall not apply
to the extent the Custodian is liable under Sections 6 or 7 hereof.
If any Fund 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 being liable for the payment of money or incurring liability of some
other form, such Fund, 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 each Fund from all losses, damages and expenses suffered or
incurred by each such Fund caused by the negligence or willful misfeasance of
the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian or any
Subcustodian, Securities System, transfer agent for an Underlying Fund, 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 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, the Custodian may, in its discretion without further
Instructions, provide an advance ("Advance") to any such Fund 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 as to which it is subsequently determined that such Fund
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 on behalf of which the Advance
was made on demand by Custodian, unless otherwise agreed by such Fund and the
Custodian, and shall accrue interest from the date of the Advance to the date of
payment by such Fund to the Custodian at a rate agreed upon in writing from time
to time by the Custodian and such Fund. 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 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 Funds which are parties to this
Agreement acknowledge that the purpose of Advances is to finance temporarily the
purchase or sale of Securities for prompt delivery in accordance with the
settlement terms of such transactions or to meet emergency expenses not
reasonably foreseeable by a Fund. The Custodian shall promptly notify the
appropriate Fund of any Advance. Such notification shall be sent by facsimile
transmission or in such other manner as such Fund and the Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the Custody Account to secure
payment of fees and expenses for the services rendered under this Agreement. If
the Bank advances cash or securities to the Fund for any purpose or in the event
that the Bank or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of its duties hereunder, except such as may arise from its or its nominee's
negligent action, negligent failure to act or willful misconduct, any Property
at any time held for the Custody Account shall be security therefor and the Fund
hereby grants a security interest therein to the Bank. The Fund shall promptly
reimburse the Bank for any such advance of cash or securities or any such taxes,
charges, expenses, assessments, claims or liabilities upon request for payment,
but should the Fund fail to so reimburse the Bank, the Bank shall be entitled to
dispose of such Property to the extent necessary to obtain reimbursement. The
Bank shall be entitled to debit any account of the Fund with the Bank including,
without limitation, the Custody Account, in connection with any such advance and
any interest on such advance as the Bank deems reasonable.
11. COMPENSATION.
Each Fund will pay to the Custodian such compensation as is agreed to in
writing by the Custodian and each such Fund 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 each such Fund
and paid in cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the Custodian such proxies, powers
of attorney or other instruments as may be reasonable and necessary or desirable
in connection with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement.
13. TERMINATION AND ASSIGNMENT.
Any Fund 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 90 days prior to the date upon which such termination
shall take effect. Upon termination of this Agreement, the appropriate Fund
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 or as otherwise designated by such Fund 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 without the
respective consent of the other, duly authorized by a resolution by its Board of
Directors or Trustees.
14. ADDITIONAL FUNDS.
An additional Fund or Funds may become a party to this Agreement after the
date hereof by an instrument in writing to such effect signed by such Fund or
Funds and the Custodian. If this Agreement is terminated as to one or more of
the Funds (but less than all of the Funds) or if an additional Fund or Funds
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 Funds
(if any) and each of the remaining Funds as well as the Custodian, deleting or
adding such Fund or Funds, as the case may be. The termination of this Agreement
as to less than all of the Funds shall not affect the obligations of the
Custodian and the remaining Funds hereunder as set forth on the signature page
hereto and in Appendix B as revised from time to time.
15. NOTICES.
As to each Fund, notices, requests, instructions and other writings delivered
to The Security Benefit Group of Companies, 000 Xxxxxxxx, Xxxxxx, Xxxxxx
00000-0000, postage prepaid, or to such other address as any particular Fund may
have designated to the Custodian in writing, shall be deemed to have been
properly delivered or given to a Fund.
Notices, requests, instructions and other writings delivered to the
Securities Administration department of the Custodian at its office at 000 Xxxxx
Xxxx., 10th Floor, Attn: Xxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or mailed
postage prepaid, to the Custodian's Securities Administration department, Post
Office Box 226, Attn: Xxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or to such
other addresses as the Custodian may have designated to each Fund 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.
16. 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:
Term Section
---- -------
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2(b)
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2(c)(1)
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
Liens 10
OCC 4(g)(1)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2(a)
Securities Depositories and 5(b)
Clearing Agencies
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2(c)(2)
Special Subcustodian 5(d)
Subcustodian 5
1940 Act 4(v)
Underlying Funds 4(b)(4)
(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 and the Custodian.
IN WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to
be executed by their respective duly authorized officers.
SECURITY ULTRA FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY EQUITY FUND
- Equity Series
- Social Awareness Series
- Value Series
- Small Company Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SBL FUND
- Series A, B, C, E, J, P, S, V and X
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY INCOME FUND
- Corporate Bond Series
- U. S. Government Series
- Limited Maturity Bond Series
- High Yield Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY GROWTH AND INCOME FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY MUNICIPAL BOND FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY CASH FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
ADVISOR'S FUND
- PCG Growth Series
- PCG Aggressive Growth Series
- SIM Growth Series
- SIM Conservative Growth Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY MANAGEMENT COMPANY, LLC
(Corporate Account)
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Date: September 24, 1998
UMB BANK, N.A.
ATTEST: X. X. XXXXXXXX By: XXXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Date: September 24, 1998
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant Trust Company
SPECIAL SUBCUSTODIANS:
The Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
SECURITY ULTRA FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY EQUITY FUND
- Equity Series
- Social Awareness Series
- Value Series
- Small Company Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SBL FUND
- Series A, B, C, E, J, P, S, V and X
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY INCOME FUND
- Corporate Bond Series
- U. S. Government Series
- Limited Maturity Bond Series
- High Yield Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY GROWTH AND INCOME FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY MUNICIPAL BOND FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY CASH FUND
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
ADVISOR'S FUND
- PCG Growth Series
- PCG Aggressive Growth Series
- SIM Growth Series
- SIM Conservative Growth Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: September 24, 1998
SECURITY MANAGEMENT COMPANY, LLC
(Corporate Account)
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Date: September 24, 1998
UMB BANK, N.A.
ATTEST: X. X. XXXXXXXX By: XXXXX X. SANTOROO
---------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Date: September 24, 1998
AMENDMENT TO CUSTODY AGREEMENT
The following open-end management investment companies ("Funds") are hereby made
parties to the Custody Agreement dated January 1, 1995, as amended September 24,
1998, with UMB Bank, n.a. ("Custodian"), and agree to be bound by all the terms
and conditions contained in said Agreement:
List of Funds:
Security Equity Fund, Enhanced Index Series
Security Equity Fund, Select 25 Series
ATTEST: SECURITY EQUITY FUND
- Enhanced Index Series
- Select 25 Series
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- --------------------------------
Xxx X. Xxx Title: Vice President
ATTEST: UMB Bank, n.a.
By: XXXXX X. XXXXXXX
------------------------------------- --------------------------------
Title: Senior Vice President
Date: February 16, 1999
AMENDMENT TO APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant Trust Company
SPECIAL SUBCUSTODIANS:
The Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
SECURITY EQUITY FUND
- Enhanced Index Series
- Select 25 Series
ATTEST: XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------ --------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Date: January 27, 1999
UMB BANK, N.A.
ATTEST: By: XXXXX X. XXXXXXX
------------------------------ --------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Date: February 16, 1999
AMENDMENT TO CUSTODY AGREEMENT
The following open-end management investment companies ("Funds") are hereby made
parties to the Custody Agreement dated January 1, 1995, as amended September 24,
1998, with UMB Bank, n.a. ("Custodian"), and agree to be bound by all the terms
and conditions contained in said Agreement:
List of Funds:
SBL Fund, Series H
SBL Fund, Series Y
Security Income Fund, Capital Preservation Series
ATTEST: SBL FUND
- Series H
- Series Y
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------ ------------------------------------
Xxx X. Xxx, Secretary Title: Vice President
ATTEST: SECURITY INCOME FUND
- Capital Preservation Series
XXX X. XXX By: XXXX X. XXXXXXX
------------------------------ ------------------------------------
Xxx X. Xxx, Secretary Xxxx X. Xxxxxxx
Title: Vice President
ATTEST: UMB Bank, n.a.
X. X. XXXXXXXX By: XXXXX X. XXXXXXX
------------------------------ ------------------------------------
R. Xxxxxxx Xxxxxxxx Title: Senior Vice President
Assistant Secretary Date: April 26, 1999
AMENDMENT TO APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant Trust Company
SPECIAL SUBCUSTODIANS:
The Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
SBL FUND
- Series H
- Series Y
ATTEST: XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------ -----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Date: April 30, 1999
-------------------------------
SECURITY INCOME FUND
- Capital Preservation Series
ATTEST: XXX X. XXX By: XXXX X. XXXXXXX
------------------------------ -----------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Date: Xxxxx 00, 0000
XXX BANK, N.A.
ATTEST: X. X. XXXXXXXX By: XXXXX X. XXXXXXX
------------------------------ -----------------------------------
R. Xxxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxxx
Assistant Secretary Title: Senior Vice President
Date: April 26, 1999
AMENDMENT TO CUSTODY AGREEMENT
DATED NOVEMBER 3, 2000
The following open-end management investment companies ("Funds") are currently
parties to the Custody Agreement dated January 1, 1995, as amended September 24,
1998, with UMB Bank, n.a. ("Custodian"). This amendment is entered into to
reflect: (i) certain name changes which have occurred within the Funds; (ii) to
add Total Return Series of Security Equity Fund to the agreement which the
Custodian has acted as custodian of the assets since July 1999; and (iii) remove
Advisor's Fund which has been dissolved. The parties agree to be bound by all
the terms and conditions contained in said Agreement.
LIST OF FUNDS: DATE ENTERED
-------------- ------------
Security Equity Fund:
Equity Series January 1, 1995
Social Awareness Series September 24, 1998
Mid Cap Value Series (formerly Value Series) September 24, 1998
Small Cap Growth Series (formerly Small Company Series) September 24, 1998
Enhanced Index Series January 27, 1999
Select 25 Series January 27, 1999
Total Return Series July 1999
Security Growth and Income Fund January 1, 1995
Security Ultra Fund January 1, 1995
SBL Fund
Series A January 1, 1995
Series B January 1, 1995
Series C January 1, 1995
Series E January 1, 1995
Series H April 26, 1999
Series J January 1, 1995
Series P September 24, 1998
Series S January 1, 1995
Series V September 24, 1998
Series X September 24, 1998
Series Y April 26, 1999
Security Income Fund
Diversified Income Series (formerly U.S. Government January 1, 1995
Series; Corporate Bond Series and Limited Maturity
Bond Series merged into Diversified Income Series)
High Yield Series September 24, 1998
Capital Preservation Series April 26, 1999
Security Municipal Bond Fund January 1, 1995
Security Cash Fund January 1, 1995
SECURITY EQUITY FUND
Equity Series
Social Awareness Series
Mid Cap Value Series
(formerly Value Series)
Small Cap Growth Series
(formerly Small Company Series)
Enhanced Index Series
Select 25 Series
ATTEST: Total Return Series
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
ATTEST: SECURITY GROWTH AND INCOME FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
ATTEST: SECURITY ULTRA FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
SBL FUND
Series A, B, C, E, H, J, P, S, V,
ATTEST: X and Y
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
SECURITY INCOME FUND
Diversified Income Series
High Yield Series
ATTEST: Capital Preservation Series
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
ATTEST: SECURITY MUNICIPAL BOND FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
ATTEST: SECURITY CASH FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
ATTEST: UMB BANK, N.A.
By:
------------------------------------- ------------------------------
Name:
------------------------------
Title:
------------------------------
AMENDMENT TO APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant Trust Company
SPECIAL SUBCUSTODIANS:
The Bank of New York
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
SECURITY EQUITY FUND
Equity Series
Social Awareness Series
Mid Cap Value Series
(formerly Value Series)
Small Cap Growth Series
(formerly Small Company Series)
Enhanced Index Series
Select 25 Series
ATTEST: Total Return Series
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
ATTEST: SECURITY GROWTH AND INCOME FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
ATTEST: SECURITY ULTRA FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
SBL FUND
Series X, X, X, X, X, X, X, X, X,
XXXXXX: X and Y
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
SECURITY INCOME FUND
Diversified Income Series
High Yield Series
ATTEST: Capital Preservation Series
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
ATTEST: SECURITY MUNICIPAL BOND FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
ATTEST: SECURITY CASH FUND
XXX X. XXX By: XXXXX X. XXXXXXX
------------------------------------- ------------------------------
Xxx X. Xxx Title: President
Date: November 3, 2000
ATTEST: UMB BANK, N.A.
By:
------------------------------------- ------------------------------
Name:
------------------------------
Title:
------------------------------
Date:
------------------------------
FORM OF
AMENDMENT TO CUSTODY AGREEMENT
AMENDMENT, dated as of July 2, 2001, to the Custody Agreement dated
___________, ______ ("Agreement"), by and between UMB Bank, n. a. ("Custodian"),
having a place of business at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000 and each of the registered investment companies (on behalf of any
series thereof, if applicable) listed on Appendix B to the Agreement, together
with such additional companies as shall be made parties to the Agreement by the
execution of a revised Appendix B to the Agreement (such companies, and any
series thereof, are referred to individually as a "Fund" and, collectively, as
the "Funds").
WHEREAS, each Fund and the Custodian have previously entered into the
Agreement pursuant to which the Custodian provides custody and related services
to each Fund, including the use of foreign subcustodians and depositories,
subject to the terms and conditions set forth therein;
WHEREAS, the U.S. Securities and Exchange Commission ("SEC") adopted Rule
17f-7 under the Investment Company Act of 1940, as amended (the "1940 Act")
concerning arrangements for foreign securities depositories;
WHEREAS, pursuant to the provisions of Rule 17f-7(a)(1), the Custodian has
agreed to assume, subject to the terms and conditions set forth herein, certain
analysis and monitoring functions related to foreign securities depositories;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, each Fund and the Custodian agree as follows. Capitalized
terms used herein without definition shall have the meanings ascribed to them in
the Agreement. All references hereunder to the 1940 Act and to the rules and
regulations thereunder shall be deemed to be a reference to such Act and its
rules and regulations as they may be amended from time to time.
1. The Agreement is amended by deleting the first paragraph under the heading
"Section 5. "SUBCUSTODIANS" and inserting the following amended paragraph in its
place:
From time to time, in accordance with the relevant provisions of this
Agreement, (i) the Custodian may appoint one or more Domestic
Subcustodians, Foreign Subcustodians, Special Subcustodians or Interim
Subcustodians (each as hereinafter defined) to act on behalf of any
one or more Funds; and (ii) the Custodian may be directed, pursuant to
an agreement between a Fund and the Custodian ("Delegation
Agreement"), to appoint a Domestic Subcustodian to perform the duties
of the Foreign Custody Manager (as such term is defined in Rule 17f-5
under the 1940 Act) ("Approved Foreign Custody Manager") for such Fund
so long as such Domestic Subcustodian is so eligible under the 1940
Act. Such Delegation Agreement shall provide that the appointment of
any Domestic Subcustodian as the Approved Foreign Custody Manager must
be governed by a written agreement between the Custodian and the
Domestic Subcustodian, which provides for compliance with Rule 17f-5.
The Approved Foreign Custody Manager may appoint a Foreign
Subcustodian or Interim Subcustodian in accordance with this Section
5. For purposes of this Agreement, all Domestic Subcustodians, Special
Subcustodians, Foreign Subcustodians and Interim Subcustodians shall
be referred to collectively as "Subcustodians."
2. The Agreement is further amended by deleting the last sentence of Subsection
5(a) in its entirety and inserting the following revised sentence in its place:
Each such duly approved Domestic Subcustodian and the countries where
Foreign Subcustodians through which they may hold securities and other
Assets of a Fund shall be as agreed upon by the parties hereto in
writing, from time to time, and shall be reflected on Appendix A
hereto.
3. The Agreement is further amended by deleting the paragraph in Subsections
5(b) and 5(c) in their entirety and inserting the following amended Subsection
5(b) in their place:
(b) Foreign Subcustodians
(1) Foreign Subcustodians. The Approved Foreign Custody Manager may
appoint any entity meeting the requirements of an Eligible Foreign
Custodian, as such term is defined in Rule 17f-5(a)(1) under the 1940
Act, and which term shall also include a bank that qualifies to serve
as a custodian of assets of investment companies under Section 17(f)
of the 1940 Act or by SEC order is exempt therefrom (each a "Foreign
Subcustodian" in the context of either a subcustodian or a
sub-subcustodian), provided that the Approved Foreign Custody
Manager's appointments of such Foreign Subcustodians shall at all
times be governed by an agreement that complies with Rule 17f-5.
(2) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Fund shall invest in a security or other Asset to be held in a
country in which the Approved Foreign Custody Manager has not
appointed a Foreign Subcustodian or for which the Fund has otherwise
directed that a specific Foreign Subcustodian be used, the Custodian
shall, or shall cause the Approved Foreign Custody Manager to,
promptly notify the Fund in writing by facsimile transmission or in
such other manner as the Fund and Custodian shall agree in writing of
the unavailability of an approved Foreign Subcustodian in such
country; and upon the receipt of Special Instructions, the Custodian
shall, or shall cause the Approved Foreign Custody Manager to, appoint
or approve any Person (as hereinafter defined) designated by the Fund
in such Special Instructions, to hold such security or other Asset.
The subcustodian agreement between the Custodian and the Interim
Subcustodian shall comply with the provisions of the 1940 Act and the
rules and regulations thereunder (including Rule 17f-5, if applicable)
and the terms and provisions of this Agreement. The Custodian shall
comply with Section 5(b)(1) hereof with respect to the appointment of
an Interim Subcustodian. (Any Person appointed or approved as either a
subcustodian or sub-subcustodian pursuant to this Section 5(b)(2) is
herein referred to as an "Interim Subcustodian.")
(3) In the event that the Approved Foreign Custody Manager or its
delegate reasonably determines that such Person will not provide
delegation services (i) in a country in which a Fund has directed that
the Fund shall invest in a security or other Asset or (ii) with
respect to a specific Foreign Subcustodian which the Fund has directed
be used, the Approved Foreign Custody Manager or the Custodian (or the
Domestic Subcustodian), as applicable, shall be entitled to rely on
any such instruction provided pursuant to Section 5(b)(2) as a Special
Instruction and shall have no duties or liabilities under this
Agreement with respect to such arrangement save those that it may
undertake specifically in writing with respect to each particular
instance; provided that the Delegation Agreement and this Agreement
shall not constitute the Approved Foreign Custody Manager or the
Custodian (or the Domestic Subcustodian), as the exclusive delegate of
the Fund for purposes of Rule 17f-5 and, particularly where such
Person does not agree to provide fully the services under this
Agreement and the Delegation Agreement to the Fund with respect to a
particular country or specific Foreign Subcustodian, the Fund may
delegate such services to another delegate pursuant to Rule 17f-5.
4. The Agreement is further amended by renumbering Subsections 5(d) and 5(e) as
5(c) and 5(d), respectively.
5. The Agreement is further amended by deleting the paragraph in Subsection
5(f), renumbering the Subsection as Subsection 5(e) and inserting the following
amended paragraph in its place:
(e) Certification Regarding Foreign Subcustodians.
Upon request of a Fund, the Custodian shall deliver, or cause any
Approved Foreign Custody Manager to deliver, to the Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which the Eligible
Securities Depositories (as defined in Section 5(f)) through which
each Foreign Subcustodian is then holding cash, securities and other
Assets of the Fund; and (iii) such other information as may be
requested by the Fund to ensure compliance with rules and regulations
under the 1940 Act.
5. The Agreement is further amended by inserting the following new Subsection
5(f) after the new renumbered Subsection 5(e):
(f) Securities Depositories.
(1) The Custodian (or the Domestic Subcustodian) may place and
maintain a Fund's Foreign Assets (as defined in Rule 17f-5 under the
0000 Xxx) with an Eligible Securities Depository (as defined in Rule
17f-7, which term shall include any other securities depository for
which the SEC by exemptive order has permitted registered investment
companies to maintain their assets).
(2) The Custodian (or the Domestic Subcustodian) shall, for
evaluation by the Fund or its adviser, provide an analysis of the
custody risks associated with maintaining the Fund's Foreign Assets
with each Eligible Securities Depository utilized directly or
indirectly by the Custodian as of the date hereof (or, in the case of
an Eligible Securities Depository not so utilized as of the date
hereof, prior to the initial placement of the Fund's Foreign Assets at
such depository) and at which any Foreign Assets of the Fund are held
or are expected to be held. The Custodian (or the Domestic
Subcustodian) shall monitor the custody risks associated with
maintaining the Fund's Foreign Assets at each such Eligible Securities
Depository on a continuing basis and shall promptly notify the Fund or
its adviser of any material changes in such risks.
(3) Based on the information available to it in the exercise of
diligence, the Custodian (or the Domestic Subcustodian) shall
determine the eligibility under Rule 17f-7 of each foreign securities
depository before maintaining the Fund's Foreign Assets therewith and
shall promptly advise the Fund if any Eligible Securities Depository
ceases to be so eligible. A list of Eligible Securities Depositories
used by the Custodian directly or indirectly as of the date hereof, or
as amended from time to time, is attached as Appendix A.
Notwithstanding Subsection 16(c) hereof, Eligible Securities
Depositories may, subject to Rule 17f-7, be added to or deleted from
such list from time to time.
(4) Withdrawal of Assets. If an arrangement with an Eligible
Securities Depository no longer meets the requirements of Rule 17f-7,
the Custodian (or the Domestic Subcustodian) will withdraw the Fund's
Foreign Assets from such depository as soon as reasonably practicable.
(5) Standard of Care. In fulfilling its responsibilities under
this Section 5(f), the Custodian will exercise reasonable care,
prudence and diligence.
6. The Agreement is further amended by inserting the following new Subsection
5(g) after the new Section 5(f):
(h) Limitations on Placement of Foreign Assets.
A Fund shall not place or maintain any of the Fund's Foreign Assets in
any country, and shall as promptly as practicable withdraw the Fund's
Foreign Assets from any country, that is identified in the Global
Custody Network Listing provided by the Custodian (or the Domestic
Subcustodian) as a country where the liability or responsibility of
the Approved Foreign Custody Manager or the Custodian (or the Domestic
Subcustodian) is conditioned or predicated on the ability of the
Approved Foreign Custody Manager or the Custodian (or the Domestic
Subcustodian) to recover damages from the Foreign Subcustodian in such
country.
7. The Agreement is further amended by deleting Subsection 6(b) in its entirety
and inserting the following amended Subsection 6(b) in its place:
(b) ACTIONS PROHIBITED BY APPLICABLE LAW, ETC.
In no event shall the Custodian incur liability hereunder if the
Custodian or any Subcustodian or Securities System, or any
Subcustodian, Eligible Securities Depository utilized by 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:
(i) 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 political subdivision thereof or of any court of
competent jurisdiction (and the Custodian nor any other Person shall
not be obligated to take any action contrary thereto); or (ii) any
"Force Majeure," which for purposes of this Agreement, shall mean any
circumstance or event which is beyond the reasonable control of the
Custodian, a Subcustodian or any agent of the Custodian or a
Subcustodian and which adversely affects the performance by the
Custodian of its obligations hereunder, by the Subcustodian of its
obligations under its subcustody agreement or by any other agent of
the Custodian or the Subcustodian, unless in each case, such delay or
nonperformance is caused by the negligence, misfeasance or misconduct
of the Custodian. Such Force Majeure events may include any event
caused by, arising out of or involving (a) an act of God, (b)
accident, fire, water damage or explosion, (c) any computer, system or
other equipment failure or malfunction caused by any computer virus or
the malfunction or failure of any communications medium, (d) any
interruption of the power supply or other utility service, (e) any
strike or other work stoppage, whether partial or total, (f) any delay
or disruption resulting from or reflecting the occurrence of any
Sovereign Risk (as defined below), (g) any disruption of, or
suspension of trading in, the securities, commodities or foreign
exchange markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not
resulting from or reflecting the occurrence of any Sovereign Risk, or
(i) any other cause similarly beyond the reasonable control of the
Custodian.
Subject to the Custodian's general standard of care set forth in
Subsection 6(a) hereof and the requirements of Section 17(f) of the
1940 Act and Rules 17f-5 and 17f-7 thereunder, the Custodian shall not
incur liability hereunder if any 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 any (i) "Sovereign Risk," which for the purpose of this
Agreement shall mean, in respect of any jurisdiction, including the
United States of America, where investments are acquired or held under
this Agreement, (a) any act of war, terrorism, riot, insurrection or
civil commotion, (b) the imposition of any investment, repatriation or
exchange control restrictions by any governmental authority, (c) the
confiscation, expropriation or nationalization of any investments by
any governmental authority, whether de facto or de jure, (d) any
devaluation or revaluation of the currency, (e) the imposition of
taxes, levies or other charges affecting investments, (f) any change
in the applicable law, or (g) any other economic or political risk
incurred or experienced that is not directly related to the economic
or financial conditions of the Eligible Foreign Custodian, except as
otherwise provided in this Agreement or the Delegation Agreement, or
(ii) "Country Risk," which for the purpose of this Agreement shall
mean, with respect to the acquisition, ownership, settlement or
custody of investments in a jurisdiction, all risks relating to, or
arising in consequence of, systemic and markets factors affecting the
acquisition, payment for or ownership of investments, including (a)
the prevalence of crime and corruption except for crime or corruption
by the Eligible Foreign Custodian, or its employees, directors or
officers for which the liability of the Custodian (or the Domestic
Subcustodian) or the Approved Foreign Custody Manager is not
predicated upon recovery of such damages from the Subcustodian as set
forth in the Global Custody Network Listing, (b) the inaccuracy or
unreliability of business and financial information (unrelated to the
Approved Foreign Custody Manager's duties imposed by Rule 17f-5(c)
under the 1940 Act or to the duties imposed on the Custodian by Rule
17f-7 under the 1940 Act), (c) the instability or volatility of
banking and financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and settlement
infrastructure of the market in which such investments are transacted
and held, (e) the acts, omissions and operation of any Eligible
Securities Depository, it being understood that this provision shall
not excuse the Custodian's performance under the express terms of this
Agreement and its liability therefor, (f) the risk of the bankruptcy
or insolvency of banking agents, counterparties to cash and securities
transactions, registrars or transfer agents, (g) the existence of
market conditions which prevent the orderly execution or settlement of
transactions or which affect the value of assets, and (h) the laws
relating to the safekeeping and recovery of a Fund's Foreign Assets
held in custody pursuant to the terms of this Agreement; provided,
however, that, in compliance with Rule 17f-5, neither Sovereign Risk
nor Country Risk shall include the custody risk of a particular
Eligible Foreign Custodian of a Fund's Foreign Assets.
8. The Agreement is further amended by deleting Subsection 16(i) in its entirety
and inserting the following amended Subsection 16(i) in its place:
(i) Entire Agreement. This Agreement and the Delegation Agreement, as
amended from time to time, constitute the entire understanding and
agreement of the parties thereto with respect to the subject matter
therein and accordingly, supercedes as of the effective date of this
Agreement any custodian agreement heretofore in effect between the
Funds and the Custodian.
9. All references throughout the Agreement to "Securities Depository or Clearing
Agency" are hereby changed to "Eligible Securities Depository." In Subsection
16(g) relating to defined terms, the reference to Section 5(b) for the
definition of "Securities Depository or Clearing Agency" (which has been changed
to "Eligible Securities Depository" is changed to Section 5(f). In addition, the
list of defined terms is amended to include "Approved Foreign Custody Manager"
with a reference to Section 5, "Force Majeure" with a reference to Section 6(b),
"Country Risk" with a reference to Section 6(b), and "Foreign Assets" with a
reference to Section 5(f).
10. Except as modified hereby, the Agreement is confirmed in all respects.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
UMB Bank, n.a.
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By: By:
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Name: Name:
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Title: Title:
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APPENDIX A
