CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT dated June 10, 1996, between Income Trust, a
Massachusetts business trust, (the "Trust"), on behalf of its underlying
portfolio, Quality Income Portfolio and First National Bank of Minneapolis, a
corporation organized under the laws of the United States of America with its
principal place of business at Minneapolis, Minnesota (hereinafter also called
the "Custodian").
WHEREAS, the Trust desires that its securities and cash be hereafter held and
administered by Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the Trust
and the Custodian agree as follows:
Section l. Definitions
The word "securities" as used herein shall be construed to include, without
being limited to, shares, stocks, treasury stocks, including any stocks of this
Trust, notes, bonds, debentures, evidences of indebtedness, options to buy or
sell stocks or stock indexes, certificates of interest or participation in any
profit-sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts, voting
trust certificates, certificates of deposit for a security, fractional or
undivided interests in oil, gas or other mineral rights, or any certificates of
interest or participation in, temporary or interim certificates for, receipts
for, guarantees of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of any right or
interest in or to any cash, property or assets and any interest or instrument
commonly known as a security. In addition, for the purpose of this Agreement,
the word "securities" also shall include other instruments in which the Trust
may invest including currency forward contracts and commodities such as interest
rate or index futures contracts, margin deposits on such contracts or options on
such contracts.
The words "custodian order" shall mean a request or direction, including a
computer printout, directed to the Custodian and signed in the name of the Trust
by any two individuals designated in the current certified list referred to in
Section 2.
The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.
Section 2. Names, Titles and Signatures of Authorized Persons
The Trust will certify to the Custodian the names and signatures of its present
officers and other designated persons authorized on behalf of the Trust to
direct the Custodian by custodian order as hereinbefore defined. The Trust
agrees that whenever any change
occurs in this list it will file with the Custodian a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Trust as having been
duly adopted by the Board of Directors or the Executive Committee of the Board
of Directors of the Trust designating those persons currently authorized on
behalf of the Trust to direct the Custodian by custodian order, as hereinbefore
defined, and upon such filing (to be accompanied by the filing of specimen
signatures of the designated persons) the persons so designated in said
resolution shall constitute the current certified list. The Custodian is
authorized to rely and act upon the names and signatures of the individuals as
they appear in the most recent certified list from the Trust which has been
delivered to the Custodian as hereinabove provided.
Section 3. Use of Subcustodians
The Custodian may make arrangements, where appropriate, with other banks having
not less than two million dollars aggregate capital, surplus and undivided
profits for the custody of securities and cash.
The Custodian also may enter into arrangements for the custody of "Foreign
Securities" and cash entrusted to its care through "Eligible Foreign Custodian,"
as those terms are defined by Rule 17f-5 under the Investment Company Act of
1940 (the "Act"), or such other entity as permitted by the Securities and
Exchange Commission (the "SEC") (such Eligible Foreign Custodians, collectively,
"Foreign Custodial Agents") provided, if required by the SEC, that the Board has
given its prior approval to the use of, and Custodian's contract with, each
Foreign Custodial Agent by resolution, and a certified copy of such resolution
has been provided to the Custodian. To the extent the provisions of this
Agreement are consistent with the requirements of the Act, rules, orders or
no-action letters of the SEC, they shall apply to all such foreign
custodianships. To the extent such provisions are inconsistent with or
additional requirements are established by the Act or such rules, orders or
no-action letters, the requirements of the Act or such rules, orders or
no-action letters will prevail and the parties will adhere to such requirements;
provided, however, in the absence of notification from the Trust of any changes
or additions to such requirements, the Custodian shall have no duty or
responsibility to inquire as to any such changes or additions.
All subcustodians of the Custodian (such subcustodians, collectively, the
"Subcustodians"), including all Foreign Custodial Agents, shall be subject to
the instructions of the Custodian and not to those of the Trust and shall act
solely as agent of the Custodian.
Section 4. Receipt and Disbursement of Money
(1) The Custodian shall open and maintain a separate account or accounts in the
name of the Trust and cause any Subcustodians to open and maintain such account
or accounts, subject only to checks, drafts or directives by the Custodian or
such Subcustodian pursuant
to the terms of this Agreement. The Custodian or such Subcustodian shall hold in
such account or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Trust. The Custodian or such Subcustodian
shall make payments of cash to or for the account of the Trust from such cash
only:
(a) for the purchase of securities for the portfolio of the Trust upon the
receipt of such securities by the Custodian or such Subcustodian;
(b) for the purchase or redemption of shares of capital stock of the Trust;
(c) for the payment of interest, dividends, taxes, management fees, or
operating expenses (including, without limitation thereto, fees for
legal, accounting and auditing services);
(d) for payment of distribution fees, commissions, or redemption fees, if
any;
(e) for payments in connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Trust held by or to be
delivered to the Custodian;
(f) for payments in connection with the return of securities loaned by the
Trust upon receipt of such securities or the reduction of collateral
upon receipt of proper notice;
(g) for payments for other proper corporate purposes; or
(h) upon the termination of this Agreement.
Before making any such payment for the purposes permitted under the terms of
items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1) of this section, the
Custodian shall receive and may rely upon a custodian order directing such
payment and stating that the payment is for such a purpose permitted under these
items (a), (b), (c), (d), (e), (f) or (g) and that in respect to item (g), a
copy of a resolution of the Board of Directors or of the Executive Committee of
the Board of Directors of the Trust signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose to be a proper corporate purpose, and
naming the person or persons to whom such payment is made. Notwithstanding the
above, for the purposes permitted under items (a) or (f) of paragraph (1) of
this section, the Custodian may rely upon a facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of the Trust to
endorse and collect all checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Trust and drawn on or to the
order of the Trust and to deposit same to the account of the Trust pursuant to
this Agreement.
(3) Subject to the prior authorization provisions of Section 3 of this
Agreement, the Trust authorizes the Custodian to establish and maintain in each
country or other jurisdiction in which the principal trading market for any
Foreign Securities is located, or in which any Foreign Securities are to be
presented for payment, an account or accounts which may include nostro accounts
with Custodian branches and omnibus accounts of Custodian at Foreign Custodial
Agents for receipt of cash in such currencies as directed by custodian order.
For purposes of this Agreement, cash so held in any such account shall be
evidenced by separate book entries maintained by Custodian and shall be deemed
to be cash held by Custodian. Cash received or credited by Custodian or any
Custodian branch or any Foreign Custodial Agent in a currency other than United
States dollars shall be maintained in such currency and shall not be converted
or remitted except in accordance with the custodian order, except as permitted
by Section 7.
Section 5. Receipt of Securities
Except as permitted by the second paragraph of this section, the Custodian
shall, and shall cause any Subcustodians to, hold in a separate account or
accounts, and physically segregated at all times from those of any other
persons, firms or corporations, pursuant to the provisions hereof, all
securities and cash received for the account of the Trust. The Custodian shall,
and shall cause any Subcustodians to, record and maintain a record of all
certificate numbers. Securities so received shall be held in the name of the
Trust, in the name of an exclusive nominee duly appointed by the Custodian or
such Subcustodian, or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the SEC may adopt, the
Custodian may deposit all or any part of the securities owned by the Trust in a
securities depository which includes any system for the central handling of
securities established by a national securities exchange or a national
securities association registered with the SEC under the Securities Exchange Act
of 1934, or such other person as may be permitted by the SEC, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities.
All securities are to be held or disposed of by the Custodian for, and subject
at all times to the instructions of, the Trust pursuant to the terms of this
Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities, except pursuant
to the directive of the Trust and only for the account of the Trust as set forth
in Section 6 of this Agreement.
Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any securities of the
Trust held by it pursuant to this Agreement. The Custodian agrees to transfer,
exchange or deliver securities held by it or any Subcustodian only:
(a) for sales of such securities for the account of the Trust, upon receipt
of payment therefor;
(b) when such securities are called, redeemed, retired or otherwise become
payable;
(c) for examination upon the sale of any such securities in accordance with
"street delivery" custom which would include delivery against interim
receipts or other proper delivery receipts;
(d) in exchange for or upon conversion into other securities alone or other
securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
(e) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(f) upon conversion of such securities pursuant to their terms into other
securities;
(g) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(h) for loans of such securities by the Trust upon receipt of collateral;
or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a), (b), (c), (d),
(e), (f), (g) and (h), securities or cash received in exchange therefore shall
be delivered to the Custodian, a Subcustodian, or to a securities depository.
Before making any such transfer, exchange or delivery, the Custodian shall
receive a custodian order or a facsimile from the Trust requesting such
transfer, exchange or delivery and stating that it is for a purpose permitted
under this section (whenever a facsimile is utilized, the Trust will also
deliver an original signed custodian order) and, in respect to item (i), a copy
of a resolution of the Board of Directors or of the Executive Committee of the
Board of Directors of the Trust signed by an officer of the Trust and certified
by its Secretary or an Assistant Secretary, specifying the securities, setting
forth the purpose for which such payment, transfer, exchange or delivery is to
be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom such transfer, exchange or delivery of such securities shall be made.
Section 7. Custodian's Acts Without Instructions
Unless and until the Custodian receives a contrary custodian order from the
Trust, the Custodian shall or shall cause a Subcustodian to:
(a) present for payment all coupons and other income items held by the
Custodian or such Subcustodian for the account of the Trust which call
for payment upon presentation and hold all cash received by it upon
such payment for the account of the Trust;
(b) present for payment all securities held by it or such Subcustodian
which mature or when called, redeemed, retired or otherwise become
payable;
(c) ascertain all stock dividends, rights and similar securities to be
issued with respect to any securities other than Foreign Securities;
(d) collect and hold for the account of the Trust all stock dividends,
rights and similar securities issued with respect to any securities;
(e) ascertain all interest and cash dividends to be paid to security
holders with respect to any securities other than Foreign Securities;
(f) collect and hold all interest and cash dividends for the account of the
Trust;
(g) present for exchange securities converted pursuant to their terms into
other securities;
(h) exchange interim receipts or temporary securities for definitive
securities;
(i) execute in the name of the Trust such ownership and other certificates
as may be required to obtain payments in respect thereto, provided that
the Trust shall have furnished to the Custodian or such Subcustodian
any information necessary in connection with such certificates; and
(j) convert interest and dividends received with respect to Foreign
Securities into United States dollars whenever it is practicable to do
so through customary banking channels, including the Custodian's own
banking facilities.
Section 8. Settlement Procedures
Settlement procedures for transactions in Foreign Securities, including receipts
and payments of cash held in any nostro account or omnibus account, shall be
carried out in accordance with instructions in the operational manual provided
by the Custodian (the "Operational Manual"). It is understood that such
settlement procedures may vary, as provided in the Operational Manual, from
securities market to securities market, to reflect particular settlement
practices in such markets.
With respect to any transaction involving Foreign Securities, the Custodian or
any Subcustodian in its discretion may cause the Trust to be credited on the
contractual settlement date with proceeds of any sale or exchange of Foreign
Securities and to be debited on the contractual settlement date for the cost of
Foreign Securities purchased or acquired. The Custodian may reverse any such
credit or debit if the transaction with respect to which such credit or debit
was made fails to settle within a reasonable period, determined by the Custodian
in its discretion, after the contractual settlement date except that if any
Foreign Securities delivered pursuant to this section are returned by the
recipient thereof, the Custodian may cause any such credits and debits to be
reversed at any time. With respect to any transactions as to which the Custodian
does not determine so to credit or debit the Trust, the proceeds from the sale
or exchange of Foreign Securities will be credited and the cost of such Foreign
Securities purchased or acquired will be debited on the date such proceeds or
Foreign Securities are received by the Custodian.
Notwithstanding the preceding paragraph, settlement, payment and delivery for
Foreign Securities may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering Foreign Securities to the purchaser thereof or to
a dealer therefor against a receipt with the exception of receiving later
payment for such Foreign Securities from such purchaser or dealer.
Section 9. Records
The Custodian hereby agrees that it shall create, maintain, and retain all
records relating to its activities and obligations under this Agreement in such
manner as will meet their obligations under this Agreement and the obligations
of the Trust under the Act, particularly Section 31 thereof and Rules 31a-1 and
31a-2 thereunder and Section 17(f) thereof and the rules thereunder, and
applicable federal, state and foreign tax laws and other laws or administrative
rules or procedures, in each case as currently in effect, which may be
applicable to the Trust. All records so maintained in connection with the
performance of its duties under this Agreement shall remain the property of the
Trust and, in
the event of termination of this Agreement, shall be delivered in accordance
with the provisions of this Agreement.
(a) With respect to securities and cash held by the Custodian's branches, such
securities and cash may be placed in an omnibus account for the customers of the
Custodian, and the Custodian shall maintain separate book entry records for each
such omnibus account.
(b) With respect to securities and cash deposited by the Custodian with a
Foreign Custodial Agent, the Custodian shall indemnify on its books as belonging
to the Trust the securities and cash shown on the Custodian's account on the
books of such Foreign Custodial Agent.
(c) With respect to securities and cash deposited with a securities depository
or clearing agency, incorporated or organized under the laws of a country other
than the United States, which operates the central system for handling of
securities or equivalent book-entries in that country or which operates a
transnational system for the central handling or securities or equivalent
book-entries (on "Eligible Foreign Securities Depository"), the Custodian shall
cause the securities and cash shown on the account on the books of the Eligible
Foreign Securities Depository to be identified as belonging to the Custodian as
agent for the Trust.
The Custodian hereby agrees that the books and records of the Custodian
(including any Custodian branch) pertaining to its actions under this Agreement
shall be open to the physical, on-premises inspection and audit by the
independent accountant (the "Accountant") employed by, or other representatives
of, the Trust, and, upon the request of the Accountant, confirmation of the
contents of those records shall be provided by the Custodian. The Custodian
shall use its best efforts to cause any Foreign Custodial Agent to afford access
to the Accountant to the books and records of such Foreign Custodial Agent with
respect to securities and cash held by such Foreign Custodial Agent for the
Trust. the Custodian also agrees to furnish the Accountant with such reports of
the Custodian's (including any Custodian branches') auditors as they relate to
the services provided under this Agreement and as are necessary for the
Accountant to conduct its examination of the books and records pertaining to
affairs of the Trust, and the Custodian shall use its best efforts to obtain and
furnish similar reports of any Foreign Custodial Agent holding securities and
cash for the Trust.
Section 10. Registration of Securities
Securities which are ordinarily held in registered form may be registered in the
name of the Custodian's nominee or, as to any securities in the physical
possession of an entity other than the Custodian, in the name of such entity's
nominee. The Trust
agrees to hold any such nominee harmless from any liability as a holder of
record of such securities. The Custodian may without notice to the Trust cause
any such securities to cease to be registered in the name of any such nominee
and to be registered in the name of the Trust. In the event that any security
registered in the name of the Custodian's nominee or held by any Subcustodians
and registered in the name of such Subcustodian's nominee is called for partial
redemption by the issuer of such security, the Custodian may allot, or cause to
be allotted, the called portion to the respective beneficial holders of such
class of security in any manner the Custodian deems to be fair and equitable.
Section 11. Transfer Taxes
The Trust shall pay or reimburse the Custodian and any Subcustodian for any
transfer taxes payable upon transfers of securities made hereunder, including
transfers resulting from the termination of this Agreement. The Custodian shall,
and shall use its best efforts to cause any Subcustodian to, execute such
certificates in connection with securities delivered to it under this Agreement
as may be required, under any applicable law or regulation, to exempt from
taxation any transfers and/or deliveries of any such securities which may be
entitled to such exemption.
Section 12. Voting and Other Action
Neither the Custodian or any Subcustodian nor any nominee of the Custodian or
such Subcustodian shall vote any of the securities held hereunder by or for the
account of the Trust. The Custodian shall, and shall use its best efforts to
cause any Subcustodian to, promptly deliver to the Trust all notices, proxies
and proxy soliciting materials with relation to such securities, such proxies to
be executed by the registered holder of such securities (if registered otherwise
than in the name of the Trust), but without indicating the manner in which such
proxies are to be voted.
The Custodian shall, and shall use its best efforts to cause any Subcustodian
to, transmit promptly to the Trust all written information (including, without
limitation, pendency of calls and maturities of securities and expirations of
rights in connection therewith) received by the Custodian or such Subcustodian
from issuers of the securities being held for the Trust. With respect to tender
or exchange offers, the Custodian shall, and shall use its best efforts to cause
any Subcustodian to, transmit promptly to the Trust all written information
received by the Custodian or such Subcustodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer.
Section 13. Custodian's Reports
The Custodian shall furnish the Trust as of the close of business each day a
statement showing all transactions and entries for the account of the Trust. The
books and records of the Custodian pertaining to its actions as Custodian under
this Agreement and securities held hereunder by the Custodian shall be open to
inspection and audit by officers of the Trust, internal auditors employed by the
Trust's investment adviser, and independent auditors employed by the Trust. The
Custodian shall furnish the Trust in such form as may reasonably be requested by
the Trust a report, including a list of the securities held by it in custody for
the account of the Trust, identification of any subcustodian, and identification
of such securities held by such subcustodian, as of the close of business of the
last business day of each month, which shall be certified by a duly authorized
officer of the Custodian. It is further understood that additional reports may
from time to time be requested by the Trust. Should any report ever be filed
with any governmental authority pertaining to lost or stolen securities, the
Custodian will concurrently provide the Trust with a copy of that report.
The Custodian also shall furnish such reports on its systems of internal
accounting control as the Trust may reasonably request from time to time.
Section 14. Security Interest, Liens and Transfers of Beneficial Ownership
The securities and cash held by the Custodian hereunder shall not be subject to
any right, change, security interest, lien or claim of any kind in favor of the
Custodian or its creditors, except a claim of payment for their safe custody or
administration, and beneficial ownership of such securities and cash shall be
freely transferable without the payment of money or value other than for safe
custody or administration. Any agreement the Custodian shall enter into with any
Subcustodian, including any Foreign Custodial Agent, shall contain a provision
which is substantially identical to the foregoing.
In the event that there shall be asserted any attachment or lien on or against
any securities or cash held in any omnibus account or nostro account referred to
in this Agreement which results from any claim against the Custodian (including
any branch) or any such account, which is not directly related to transactions
in securities or cash for the Trust, the Custodian will use its best efforts
promptly to discharge such attachment or lien. If the Custodian shall not have
discharged such attachment or lien within five business days, it shall notify
the Trust of the existence of the attachment or lien. If the attachment or lien
is not discharged on the date required for delivery or payment with respect to
any securities or cash in accordance with the provisions of the Operation
Manual:
(a) in the case of such securities, at the option of the Trust, the Custodian
shall either immediately transfer to the Trust a like amount of such securities
(provided the same shall be reasonably available) or immediately transfer an
amount in United States dollars equal to the market value of such securities,
valued in accordance with such procedures as may be mutually agreed to by the
parties thereto;
(b) in the case of cash, the Custodian shall immediately transfer to the Trust
an equal amount of cash in United States dollars.
Section 15. Compensation
For its services hereunder the Custodian shall be paid such compensation and
out-of-pocket or incidental expenses at such times as may from time to time be
agreed on in writing by the parties hereto in a Custodian Fee Agreement.
Section 16. Standard of Care
The Custodian shall not be liable for any action taken in good faith upon any
custodian order or facsimile herein described or certified copy of any
resolution of the Board of Directors or of the Executive Committee of the Board
of Directors of the Trust, and may rely on the genuineness of any such document
which it may in good faith believe to have been validly executed.
The Trust agrees to indemnify and hold harmless the Custodian, any Subcustodian,
or any nominee thereof from all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) incurred or assessed against any such
entity in connection with the performance of this Agreement, except such as may
arise from such entity's own negligent action, negligent failure to act or
willful misconduct. The Custodian is authorized to charge any account of the
Trust for such items. In the event of any advance of cash for any purpose made
by the Custodian resulting from orders or instructions of the Trust, or in the
event that the Custodian or any nominee thereof shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from such entity's
own negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the Trust shall be security
therefor.
The Custodian shall maintain a standard of care equivalent to that which would
be required of a bailee for hire and shall not be liable for any loss or damage
to the Trust resulting from participation in a securities depository unless such
loss or damage arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against any securities
depository or from use of a Subcustodian, unless such loss or damage arises by
reason of any negligence, misfeasance, or willful misconduct of officers or
employees of the Custodian, or from its failure to enforce effectively such
rights as it may have against such Subcustodian. Anything in the foregoing to
the contrary notwithstanding, the Custodian shall exercise, in the performance
of its obligations undertaken or reasonably assumed with respect to this
Agreement, including the recommendation to the Board of Foreign Custodial
Agents, reasonable care, for which the Custodian shall be responsible to the
same extent as if it were performing such duties directly and holding such
securities and cash in Minnesota, United States of America. The Custodian shall
be indemnified and held harmless by the Trust from and against any loss or
liability for any action taken or omitted to be taken hereunder in good faith
upon custodian order and may rely on the genuineness of all such orders and
documents as it in good faith believes to have been validly executed. The
Custodian shall be responsible for the securities and cash held by or deposited
with any Subcustodian to the same extent as if such securities and cash were
directly held by or deposited with the Custodian. The Custodian hereby agrees
that it shall indemnify and hold the Trust harmless from and against any loss
which shall occur as a result of the failure of a foreign Custodial Agent
holding the securities and cash to exercise reasonable care with respect to the
safekeeping of such securities and cash to the extent that the Custodian would
be required to indemnify and hold the Trust harmless if the Custodian were
itself holding such securities and cash in Minnesota. It is also understood that
the Custodian shall not have liability for loss except by reason of the
Custodian's negligence, fraud or willful misconduct, or by reason of negligence,
fraud or willful misconduct of any Subcustodian holding such securities or cash
for the Trust.
The Custodian warrants that the established procedures to be followed by any
Subcustodian, in the opinion of the Custodian after due inquiry, afford
protection for such securities and cash at least equal to that afforded by the
Custodian's established procedures with respect to similar securities and cash
held by the Custodian (including its securities depositories) in Minnesota.
However, the Custodian shall have no liability for any loss or liability
occasioned by delay in the actual receipt by it or any Subcustodian of notice of
any payment, redemption, or other transaction regarding securities unless such
delay is a result of its own negligence, fraud, or willful misconduct.
The Custodian shall not be responsible for any loss of the Trust, or to take any
action with respect to any attachment or lien on any omnibus account or nostro
account, except as provided in Section 14 of this Agreement, in such loss,
attachment or lien arises by reason of any cause or circumstances beyond the
control of the Custodian, including acts of civil or military
authority, expropriation, national emergency, acts of God, insurrection, war,
riots, or failure of transportation, communication or power supply, or the
failure of any person, firm or corporation (other than the Custodian or any
Subcustodian acting on behalf of the Custodian) to perform any obligation if
such failure results in any such loss.
Section 17. Insurance
The Custodian represents and warrants that it presently maintains and shall
maintain for the duration of this Agreement a bankers' blanket bond (the "Bond")
which provides standard fidelity and non-negligent loss coverage with respect to
securities and cash which may be held by the Custodian and securities and cash
which may be held by any Subcustodian which may be utilized by the Custodian
pursuant to this Agreement. The Custodian agrees that, if at any time the
Custodian for any reason discontinues such coverage, it shall immediately notify
the Trust in writing. The Custodian represents that only the named insured on
the Bond, which includes the Custodian but not any of its customers, is directly
protected against loss. The Custodian represents that while it might resist a
claim of one of its customers to recover for a loss not covered by the Bond, as
a practical matter, where a claim is brought and a loss is possibly covered by
the Bond, the Custodian would give notice of the claim to its insurer, and the
insurer would normally determine whether to defend the claim against the
Custodian or to pay the claim on behalf of the Custodian.
The Custodian also represents that it does not intend to obtain any insurance
for the benefit of the Trust which protects against the imposition of the
proceeds of sale of any securities or against confiscation, expropriation or
nationalization of any securities or the assets of the issuer of such securities
by a government or any foreign country in which the issuer of such securities is
organized or in which securities are held for safekeeping either by the
Custodian or any Subcustodian in such country. The Custodian represents that it
has discussed the availability of expropriation insurance with the Trust. The
Custodian also represents that it has advised the Trust as to its understanding
of the position of the Staff of the SEC that any investment company investing in
securities of foreign issuers has the responsibility for reviewing the
possibility of the imposition of exchange control restrictions which would
affect the liquidity of such investment company's assets and the possibility of
exposure to political risk, including the appropriateness of insuring against
such risk. The Custodian represents that the Trust has acknowledged that it has
the responsibility to review the possibility of such risks and what, if any,
action should be taken.
Section 18. Termination and Amendment of Agreement
The Trust and the Custodian mutually may agree from time to time in writing to
amend, to add to, or to delete from any provision of this Agreement.
The Custodian may terminate this Agreement by giving the Trust ninety days'
written notice of such termination by registered mail addressed to the Trust at
its principal place of business.
The Trust may terminate this Agreement at any time by written notice thereof
delivered, together with a copy of the resolution of the Board of Directors
authorizing such termination and certified by the Secretary of the Trust, by
registered mail to the Custodian.
Upon such termination of this Agreement, assets of the Trust held by the
Custodian shall be delivered by the Custodian to a successor custodian, if one
has been appointed by the Trust, upon receipt by the Custodian of a copy of the
resolution of the Board of Directors of the Trust certified by the Secretary,
showing appointment of the successor custodian, and provided that such successor
custodian is a bank or trust company, organized under the laws of the United
States or of any State of the United States, having not less than two million
dollars aggregate capital, surplus and undivided profits. Upon the termination
of this Agreement as a part of the transfer of assets, either to a successor
custodian or otherwise, the Custodian will deliver securities held by it
hereunder, when so authorized and directed by resolution of the Board of
Directors of the Trust, to a duly appointed agent of the successor custodian or
to the appropriate transfer agents for transfer of registration and delivery as
directed. Delivery of assets on termination of this Agreement shall be effected
in a reasonable, expeditious and orderly manner; and in order to accomplish an
orderly transition from the Custodian to the successor custodian, the Custodian
shall continue to act as such under this Agreement as to assets in its
possession or control. Termination as to each security shall become effective
upon delivery to the successor custodian, its agent, or to a transfer agent for
a specific security for the account of the successor custodian, and such
delivery shall constitute effective delivery by the Custodian to the successor
under this Agreement.
In addition to the means of termination hereinbefore authorized, this Agreement
may be terminated at any time by the vote of a majority of the outstanding
shares of the Trust and after written notice of such action to the Custodian.
Section 19. Limitations of Liability of the Trustees and Unitholders of Trust
A copy of the Declaration of Trust, dated May 24, 1995, together with all
amendments, is on file in the office of the Secretary of State of the
Commonwealth of Massachusetts. The execution and delivery of this Agreement have
been authorized by the Trustees and the Agreement has been signed by an
authorized officer of the Trust. It is expressly agreed that the obligations of
the Trust under this Agreement shall not be binding upon any of the Trustees,
unitholders, nominees, officers, agents or employees of the Trust, personally,
but bind only the assets and property of the Trust, as provided in the
Declaration of Trust.
Section 20. General
Nothing expressed or mentioned in or to be implied from any provision of this
Agreement is intended to, or shall be construed to give any person or
corporation other than the parties hereto, any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns.
This Agreement shall be governed by the laws of the State of Minnesota.
INCOME TRUST
Quality Income Portfolio
By /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
FIRST NATIONAL BANK OF MINNEAPOLIS
By /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Vice President
