CUSTODY AGREEMENT
THIS AGREEMENT made effective as of the ___ day of _______, 2000 by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its trust office located at 000
Xxxxxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and XXXXXXXX NEW
TECHNOLOGIES FUND II, INC., a Maryland corporation, having its principal office
and place of business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian as
custodian of the Fund which is to include:
A. Appointment as custodian of thesecurities and monies at any time owned
by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and recordkeeping
functions required of a duly registered investment company in
compliance with applicable provisions of federal, state, and local
laws, rules and regulations including, as may be required:
1. Providing information necessary for Fund and each Portfolio to
file required financial reports; maintaining and preserving
required books, accounts and records as the basis for such
reports; and performing certain daily functions in connection
with such accounts and records, and
2. Calculating daily net asset value of each Portfolio of the Fund,
and
3. Acting as liaison with independent auditors.
2. REPRESENTATIONS AND WARRANTIES OF FUND.
A. Fund represents and warrants that it is a corporation duly organized
as heretofore described and existing and in good standing under the
laws of Maryland;
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B. Fund represents and warrants that it has the power and authority under
applicable laws, its charter document and bylaws, and has taken all
action necessary, to enter into and perform this Agreement including
appropriate authorization from the Fund;
C. Fund represents and warrants that it has determined that the
accounting system licensed for use by Custodian from a third party
("Licensor") to maintain the accounting records of the Fund (the
"System") is appropriate and suitable for its needs;
D. Fund acknowledges that Custodian and Licensor have proprietary rights
in and to the System and that the System and the programs,
documentation and information of, and other materials relevant to, the
System or the business of Custodian ("Confidential Information") are
confidential and constitute trade secrets of Custodian;
E. Fund shall preserve the confidentiality of the Confidential
Information and prevent its disclosure to other than its own employees
and agents who reasonably have a need to know such information
pursuant to this Agreement, and shall take reasonable action to
protect the rights of Custodian and Licensor in the System. For
purposes of this paragraph, "reasonable action" shall mean taking such
actions and exercising such degree of care as Fund uses with reference
to its own highly confidential information. Certain reports as agreed
upon in writing by the Fund and Custodian will be furnished to the
Fund's custodian for its reasonable business needs.
3. REPRESENTATION AND WARRANTIES OF CUSTODIAN.
A. It is a trust company duly organized and existing and in good standing
under the laws of the State of Missouri.
B. It has the requisite power and authority under applicable laws, by its
charter and bylaws, and by agreement to enter into this Agreement and
has taken all action necessary to enter into and perform the services
contemplated herein and this Agreement has been duly executed and
delivered by Custodian and constitutes a legal, valid and binding
obligation of Custodian, enforceable in accordance with its terms.
4. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing Custodian as
custodian hereunder and approving the form of this Agreement; and
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B. Resolutions of the Board of Directors of Fund designating certain
persons to give instructions on behalf of Fund to Custodian and
authorizing Custodian to rely upon such instructions.
5. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets. Fund will deliver or cause to be delivered to
Custodian on the effective date of this Agreement, or as soon
thereafter as practicable, and from time to time thereafter, all
portfolio securities acquired by it and monies then owned by it
(except as permitted by the Investment Company Act of 1940) or from
time to time coming into its possession during the time this Agreement
shall continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not so
delivered. All securities so delivered to Custodian (other than bearer
securities) shall be registered in the name of Fund or its nominee, or
of a nominee of Custodian, or shall be properly endorsed and in form
for transfer satisfactory to Custodian.
B. Delivery of Accounts and Records. Fund shall turn over to Custodian
all of the Fund's relevant accounts and records previously maintained
by it. Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund, and Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of Fund to
provide any portion of such or to provide any information needed by
the Custodian knowledgeably to perform its function hereunder.
C. Delivery of Assets to Third Parties. Custodian will receive delivery
of and keep safely the assets of Fund delivered to it from time to
time and the assets of each Portfolio segregated in a separate
account. Custodian will not deliver, assign, pledge or hypothecate any
such assets to any person except as permitted by the provisions of
this Agreement or any agreement executed by it according to the terms
of Section 5.S. of this Agreement. Upon delivery of any such assets to
a subcustodian pursuant to Section 5.S. of this agreement, Custodian
will create and maintain records identifying those assets which have
been delivered to the subcustodian as belonging to the applicable
Portfolio of the Fund. The Custodian is responsible for the
safekeeping of the securities and monies of Fund only until they have
been transmitted to and received by other persons as permitted under
the terms of this Agreement, except for securities and monies
transmitted to subcustodians appointed under Section 5.S. hereof, for
which Custodian remains responsible. Custodian shall be responsible
only for the monies and securities of Fund held by it or its nominees,
subcustodian or its nominees, and eligible foreign subcustodians to
the extent the domestic custodian with which the Custodian contracts
is responsible to Custodian. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company,
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Treasury/Federal Reserve Book Entry System, Participant Trust Company
or other depository approved by the Fund (as such entities are defined
at 17 CFR Section 270.17f-4(b)).
D. Registration of Securities. Custodian will hold stocks and other
registrable portfolio securities of Fund registered in the name of
Fund or its nominee or in the name of any nominee of Custodian for
whose fidelity and liability Custodian will be fully responsible, or
in street certificate form, so-called, with or without any indication
of fiduciary capacity. Unless otherwise instructed, Custodian will
register all such portfolio securities in the name of its authorized
nominee, as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder or in any provision of
any subsequent Federal tax law exempting such transaction from
liability for stock transfer taxes. All securities, and the ownership
thereof by a Portfolio of the Fund, which are held by Custodian
hereunder, however, shall at all times be identifiable on the records
of the Custodian. The Fund agrees to hold Custodian and its nominee
harmless for any liability as a record holder of securities held in
custody.
E. Exchange of Securities. Upon receipt of instructions as defined herein
in Section 6.A, Custodian will exchange, or cause to be exchanged,
portfolio securities held by it for the account of the applicable
Portfolio of the Fund for other securities or cash issued or paid in
connection with any reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, conversion or
otherwise, and will deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without instructions,
Custodian is authorized to exchange securities held by it in temporary
form for securities in definitive form, to effect an exchange of
shares when the par value of the stock is changed, and, upon receiving
payment therefor, to surrender bonds or other securities held by it at
maturity or when advised of an earlier mandatory call for redemption,
except that Custodian shall receive instructions prior to surrendering
any convertible security. Pursuant to this paragraph, the Custodian
will inform the Fund of such corporate actions and capital changes
when it is informed of them through the publications it subscribes to.
F. Purchases of Investments of the Fund. Fund will, on each business day
on which a purchase of securities shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
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4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of such named Portfolio, but only insofar
as monies are available therein for such purpose, and receive the
portfolio securities so purchased by such named Portfolio, except that
Custodian may in its sole discretion advance funds to the Fund which
may result in an overdraft because the monies held by the Custodian on
behalf of the Fund are insufficient to pay the total amount payable
upon such purchase. Such payment will be made only upon receipt by
Custodian of the securities so purchased in form for transfer
satisfactory to Custodian. Custodian agrees to promptly inform Fund of
any failures by sellers to make proper deliveries of securities
purchased by the Fund.
G. Sales and Deliveries of Investments of the Fund - Other than Options
and Futures. Fund will, on each business day on which a sale of
investment securities of Fund has been made, deliver to Custodian
instructions specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
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9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of such Portfolio to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only upon
receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may deliver or cause
to be delivered securities for payment in accordance with the customs
prevailing among dealers in securities. Custodian agrees to promptly
inform Fund of any failures of purchasers to make proper payment for
securities sold by Fund.
H. Purchases or Sales of Security Options, Options on Indices and
Security Index Futures Contracts. Fund will, on each business day on
which a purchase or sale of the following options and/or futures shall
be made by it, deliver to Custodian instructions which shall specify
with respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
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g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and, when
available, the closing level thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned. If specifically allowed for in the
prospectus of the applicable Portfolio of the Fund:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by a Portfolio of the Fund; provided, however,
that the securities shall be released only upon payment to
Custodian of the monies borrowed, except that in cases
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where additional collateral is required to secure a borrowing
already made, further securities may be released or caused to be
released for that purpose upon receipt of instructions. Upon
receipt of instructions, Custodian will pay, but only from funds
available for such purpose, any such loan upon redelivery to it
of the securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
J. Routine Matters. Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with securities or
other property of Fund except as may be otherwise provided in this
Agreement or directed from time to time by the Board of Directors of
Fund.
K. Deposit Account. Custodian will open and maintain a special purpose
deposit account(s) in the name of Custodian on behalf of each
Portfolio ("Accounts"), subject only to draft or order by Custodian
upon receipt of instructions. All monies received by Custodian from or
for the account of a Portfolio shall be deposited in said Accounts.
Barring events not in the control of the Custodian such as strikes,
lockouts or labor disputes, riots, war or equipment or transmission
failure or damage, fire, flood, earthquake or other natural disaster,
action or inaction of governmental authority or other causes beyond
its control, at 9:00 a.m., Kansas City time, on the second business
day after deposit of any check into Fund's Account, Custodian agrees
to make Fed Funds available to the appropriate Portfolio of the Fund
in the amount of the check. Deposits made by Federal Reserve wire will
be available to the Fund immediately and ACH wires will be available
to the Fund on the next business day. Income earned on the portfolio
securities will be credited to the applicable Portfolio of the Fund
based on the schedule attached as Exhibit A, except that income earned
on portfolio securities held by domestic subcustodians other than
State Street Bank & Trust Company will be credited when received. The
Custodian will be entitled to reverse any credited amounts where
credits have been made and monies are not finally collected. If monies
are collected after such reversal, the Custodian will credit the
applicable Portfolio in that amount. Custodian may open and maintain
an Account in such other banks or trust companies as may be designated
by it and by properly
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authorized resolution of the Board of Directors of Fund, such Account,
however, to be in the name of Custodian on behalf of the applicable
portfolio of the Fund and subject only to its draft or order.
L. Income and other Payments to Fund. Custodian will:
1. Collect, claim and receive and deposit for the Account of each
Portfolio of the Fund all income and other payments which become
due and payable on or after the effective date of this Agreement
with respect to the securities deposited under this Agreement,
and credit the account of the applicable Portfolio of the Fund in
accordance with the schedule attached hereto as Exhibit A. Income
from foreign securities and assets held by eligible foreign
subcustodians shall be credited by Custodian upon receipt of
income from the domestic subcustodian contracting with the
foreign eligible subcustodians. If, for any reason, the Fund is
credited with income that is not subsequently collected,
Custodian may reverse that credited amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
notice of which is contained in publications of the
type to which a custodian for investment companies
normally subscribes for such purpose; and
b. the endorsement for collection, in the name of the
applicable Portfolio of the Fund, of all checks, drafts or
other negotiable instruments.
Custodian, however, will not be required to institute suit or
take other extraordinary action to enforce collection except upon
receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or other
actions. Custodian will receive, claim and collect all stock
dividends, rights and other similar items and will deal with the
same pursuant to instructions.
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Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights
held for the account of Fund on the last trade date prior to the
date of expiration of such rights.
M. Payment of Dividends and other Distributions. On the declaration of
any dividend or other distribution on the shares of Capital Stock of
any Portfolio ("Portfolio Shares") by the Board of Directors of Fund,
Fund shall deliver to Custodian instructions with respect thereto,
including a copy of the Resolution of said Board of Directors
certified by the Secretary or an Assistant Secretary of Fund wherein
there shall be set forth the record date as of which shareholders
entitled to receive such dividend or other distribution shall be
determined, the date of payment of such dividend or distribution, and
the amount payable per share on such dividend or distribution. Except
if the ex-dividend date and the reinvestment date of any dividend are
the same, in which case funds shall remain in the Custody Account, on
the date specified in such Resolution for the payment of such dividend
or other distribution, Custodian will pay out of the monies held for
the account of the applicable Portfolio of the Fund, insofar as the
same shall be available for such purposes, and wire to the account of
the Dividend Disbursing Agent for Fund, such amount as may be
necessary to pay the amount per share payable in cash on Portfolio
Shares issued and outstanding on the record date established by such
Resolution.
N. Shares of Fund Purchased by Fund. Whenever any Portfolio Shares are
repurchased or redeemed by Fund, Fund or its agent shall advise
Custodian of the aggregate dollar amount to be paid for such shares
and shall confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the Account of
Portfolio and either deposit the same in the account maintained for
the purpose of paying for the repurchase or redemption of Portfolio
Shares or deliver the same in accordance with such advice. Custodian
shall not have any duty or responsibility to determine that Fund
Shares have been removed from the proper shareholder account or
accounts or that the proper number of such shares have been canceled
and removed from the shareholder records.
O. Shares of Fund Purchased from Fund. Whenever Portfolio Shares are
purchased from Fund, Fund will deposit or cause to be deposited with
Custodian the amount received for such shares. Custodian shall not
have any duty or responsibility to determine that Portfolio Shares
purchased from Fund have been added to the proper shareholder account
or accounts or that the proper number of such shares have been added
to the shareholder records.
P. Proxies and Notices. Custodian will promptly deliver or mail or have
delivered or mailed to Fund all proxies properly signed, all notices
of meetings, all proxy statements and other notices, requests or
announcements affecting or relating to securities held by Custodian
for Fund and will, upon receipt of instructions, execute and deliver
or cause its nominee to execute and deliver or mail or have
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delivered or mailed such proxies or other authorizations as may be
required. Except as provided by this Agreement or pursuant to
instructions hereafter received by Custodian, neither it nor its
nominee will exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy, power of
attorney, or other similar instrument voting any of such securities,
or give any consent, approval or waiver with respect thereto, or take
any other similar action.
Q. Disbursements. Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and other obligations
of Fund (including but not limited to obligations in connection with
the conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. Daily Statement of Accounts. Custodian will, within a reasonable time,
render to Fund as of the close of business on each day, a detailed
statement of the amounts received or paid and of securities received
or delivered for the account of Fund during said day. Custodian will,
from time to time, upon request by Fund, render a detailed statement
of the securities and monies held for Fund under this Agreement, and
Custodian will maintain such books and records as are necessary to
enable it to do so and will permit such persons as are authorized by
Fund, including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, will permit federal and state regulatory agencies to examine
the securities, books and records. Upon the written instructions of
Fund or as demanded by federal or state regulatory agencies, Custodian
will instruct any subcustodian to give such persons as are authorized
by Fund, including Fund's independent public accountants, access to
such records or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory agencies to examine
the books, records and securities held by subcustodian which relate to
Fund. Fund will be entitled to receive reports produced by the System,
including, without limitation, those listed on Exhibit B hereof.
S. Appointment of Subcustodians
1. Notwithstanding any other provisions of this Agreement, all of or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian and approved by
the Fund's Board of Directors. Any such subcustodian must have
the qualifications required for custodian under the Investment
Company Act of 1940, as amended. The subcustodian may participate
directly or indirectly in the Depository Trust Company,
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Treasury/Federal Reserve Book Entry System, Participant Trust
Company or other depository approved by the Fund (as such
entities are defined at 17 CFR Sec. 270.17f-4(b)). The
appointment of State Street Bank and Trust Company or any other
subcustodian, depository or clearing agency used by the Custodian
and approved by the Fund will not relieve Custodian of any of its
obligations hereunder except as provided in Section 5.C hereof.
The Custodian will comply with Section 17f-4 of the Investment
Company Act of 1940, as amended, as to depositories and clearing
agencies used by Custodian and approved by the Fund. The
Custodian will not be entitled to reimbursement by Fund for any
fees or expenses of any subcustodian, depository or clearing
agency.
2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts reasonably necessary to effect Fund's
foreign securities transactions, may be held in the custody of
one or more banks or trust companies acting as subcustodians,
according to Section 5.S.1; and thereafter, pursuant to a written
contract or contracts as approved by Fund's Board of Directors,
may be transferred to an account maintained by such subcustodian
with an eligible foreign custodian, as defined in Rule
17f-5(c)(2), provided that any such arrangement involving a
foreign custodian shall be in accordance with the provisions of
Rule 17f-5 under the Investment Company Act of 1940 as that Rule
may be amended from time to time.
T. Accounts and Records. Custodian, with the direction and as interpreted
by the Fund, Fund's accountants and/or other tax advisors, will
prepare and maintain as complete, accurate and current all accounts
and records required to be maintained by Fund under the Internal
Revenue Code of 1986 ("Code") as amended and under the general Rules
and Regulations under the Investment Company Act of 1940 ("Rules") as
amended, and as agreed upon between the parties and will preserve said
records in the manner and for the periods prescribed in said Code and
Rules, or for such longer period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate and timely
information to complete Fund's records and perform daily calculation
of the Fund's net asset value, as provided in Section 5.W below.
Custodian shall incur no liability and Fund shall indemnify and hold
harmless Custodian from and against any liability arising from any
failure of Fund to furnish such information in a timely and accurate
manner, even if Fund subsequently provides accurate but untimely
information. It shall be the responsibility of Fund to furnish
Custodian with the declaration, record and payment dates and amounts
of any dividends or income and any other special actions required
concerning each of its securities when such information is not readily
available from generally accepted securities industry services or
publications.
U. Accounts and Records Property of Fund. Custodian acknowledges that all
of the
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accounts and records maintained by Custodian pursuant to this
Agreement are the property of Fund, and will be made available to Fund
for inspection or reproduction within a reasonable period of time,
upon demand. Custodian will assist Fund's independent auditors, or
upon approval of Fund, or upon demand, any regulatory body having
jurisdiction over the Fund or Custodian, in any requested review of
Fund's accounts and records but shall be reimbursed for all expenses
and employee time invested in any such review outside of routine and
normal periodic reviews. Upon receipt from Fund of the necessary
information, Custodian will supply necessary data for Fund's
completion of any necessary tax returns, questionnaires, periodic
reports to Shareholders and such other reports and information
requests as Fund and Custodian shall agree upon from time to time.
V. Adoption of Procedures. Custodian and Fund may from time to time adopt
procedures as they agree upon, and Custodian may conclusively assume
that no procedure approved by Fund, or directed by Fund, conflicts
with or violates any requirements of its prospectus, "Articles of
Incorporation", Bylaws, or any rule or regulation of any regulatory
body or governmental agency. Fund will be responsible to notify
Custodian of any changes in statutes, regulations, rules or policies
which might necessitate changes in Custodian's responsibilities or
procedures.
W. Calculation of Net Asset Value. Custodian will calculate Fund's net
asset value, in accordance with Fund's prospectus, once daily.
Custodian will prepare and maintain a daily evaluation of securities
for which market quotations are available by the use of outside
services normally used and contracted for this purpose; all other
securities will be evaluated in accordance with Fund's instructions.
Custodian will have no responsibility for the accuracy of the prices
quoted by these outside services or for the information supplied by
Fund or upon instructions.
X. Advances. In the event Custodian or any subcustodian shall, in its
sole discretion, advance cash or securities for any purpose (including
but not limited to securities settlements, purchase or sale of foreign
exchange or foreign exchange contracts and assumed settlement) for the
benefit of any Portfolio, the advance shall be payable by the Fund on
demand. Any such cash advance shall be subject to an overdraft charge
at the rate set forth in the then-current fee schedule from the date
advanced until the date repaid. As security for each such advance,
Fund hereby grants Custodian and such subcustodian a lien on and
security interest in all property at any time held for the account of
the applicable Portfolio, including without limitation all assets
acquired with the amount advanced. Should the Fund fail to promptly
repay the advance, the Custodian and such subcustodian shall be
entitled to utilize available cash and to dispose of such Portfolio's
assets pursuant to applicable law to the extent necessary to obtain
reimbursement of the amount advanced and any related overdraft
charges.
13
6. INSTRUCTIONS.
A. The term "instructions", as used herein, means written or facsimile
instructions or advice to Custodian from two designated
representatives of Fund. Certified copies of resolutions of the Board
of Directors of Fund naming two or more designated representatives to
give instructions in the name and on behalf of Fund may be received
and accepted from time to time by Custodian as conclusive evidence of
the authority of any two designated representatives to act for Fund
and may be considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until receipt
by Custodian of notice to the contrary. Unless the resolution
delegating authority to any person to give instructions specifically
requires that the approval of anyone else will first have been
obtained, Custodian will be under no obligation to inquire into the
right of the person giving such instructions to do so. Notwithstanding
any of the foregoing provisions of this Section 6, no authorizations
or instructions received by Custodian from Fund will be deemed to
authorize or permit any director, trustee, officer, employee, or agent
of Fund to withdraw any of the securities or similar investments of
Fund upon the mere receipt of such authorization or instructions from
such director, trustee, officer, employee or agent. Notwithstanding
any other provision of this Agreement, Custodian, upon receipt (and
acknowledgment if required at the discretion of Custodian) of the
instructions of any two designated representatives of Fund, will
undertake to deliver for Fund's account monies (provided such monies
are on hand or available) in connection with Fund's transactions and
to wire transfer such monies to such broker, dealer, subcustodian,
bank or other agent specified in such instructions.
B. If oral instructions are permitted pursuant to Section 6.A hereunder,
no later than the next business day immediately following such oral
instruction the Fund will send Custodian written confirmation of such
oral instruction. At Custodian's sole discretion, Custodian may record
on tape, or otherwise, any oral instruction whether given in person or
via telephone, each such recording identifying the parties, the date
and the time of the beginning and ending of such oral instruction.
7. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall not be liable for consequential damages. Custodian may
request and obtain the advice and opinion of counsel for Fund, or of
its own counsel with respect to questions or matters of law, and it
shall be without liability to Fund for any action taken or omitted by
it in good faith, in conformity with such advice or opinion. If
Custodian reasonably believes that it could not prudently act
according to the instructions of the Fund or the Fund's counsel, it
may in its discretion, with notice to the Fund, not act according to
such instructions.
B. Custodian may rely upon the advice of Fund and upon statements of
Fund's public accountants and other persons believed by it in good
faith to be expert in matters upon which they are consulted, and
Custodian shall not be liable for any actions taken, in good faith,
upon such statements.
14
C. If Fund requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian against any
liability on account of such action.
D. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably 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 Fund hereunder, a
certificate signed by the Fund's President, or other officer
specifically authorized for such purpose.
E. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Capital
Stock of Fund, or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any stock
dividend.
F. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
received by it on behalf of Fund, until Custodian actually receives
such money, provided only that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the end that
such money shall be received.
15
G. Custodian shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company,
or any other person with whom Custodian may deal in the absence of
negligence, or bad faith on the part of Custodian, except as provided
in Section 5.S.1 hereof.
H. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section 5.S.2
must, provide Fund for its approval, agreements with banks or trust
companies which will act as subcustodians for Fund pursuant to Section
5.S of this Agreement.
8. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
a separate fee schedule incorporated herein by reference, which may be
changed from time to time as agreed to in writing by Custodian and Fund.
Custodian may charge such compensation against monies held by it for the
account of Fund. Custodian will also be entitled, notwithstanding the
provisions of Sections 7.C or 7.D hereof, to charge against any monies held
by it for the account of Fund the amount of any loss, damage, liability,
advance, or expense for which it shall be entitled to reimbursement under
the provisions of this Agreement including fees or expenses due to
Custodian for other services provided to the Fund by the Custodian.
Custodian will not be entitled to reimbursement by Fund for any loss or
expenses of any subcustodian.
9. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than ninety (90) days prior to the date upon
which such termination will take effect. If the Custodian of the Fund
terminates this Agreement, the Fund may extend the effective date of the
termination ninety (90) days by written request to the Custodian thirty
(30) days prior to the end of the initial ninety (90) days notice period
unless the Custodian in good faith could not perform the duties hereunder.
Upon termination of this Agreement, Fund will pay to Custodian such
compensation for its reimbursable disbursements, costs and expenses paid or
incurred to such date and Fund will use its best efforts to obtain a
successor custodian. Unless the holders of a majority of the outstanding
shares of "Capital Stock" of Fund vote to have the securities, funds and
other properties held under this Agreement delivered and paid over to some
other person, firm or corporation specified in the vote, having not less
the Two Million Dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report, and meeting such
other qualifications for custodian as set forth in the Bylaws of Fund, the
Board of Directors of Fund will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian a bank or
trust company having such qualifications. Custodian will, upon termination
of this Agreement, deliver to the successor custodian so specified or
appointed, at Custodian's office, all securities then held by Custodian
hereunder, duly endorsed and in form for transfer, all funds and other
properties of Fund deposited with or held by Custodian hereunder, or will
cooperate in effecting changes in book-entries at the Depository Trust
Company or in the Treasury/Federal Reserve Book-Entry System pursuant to 31
CFR Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor custodian
16
has been delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust company at the selection of Custodian
and meeting the qualifications for custodian, if any, set forth in the
Bylaws of Fund and having not less than Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the successor
custodian under this Agreement and will be entitled to reasonable
compensation for its services. In the event that no such successor
custodian can be found, Fund will submit to its shareholders, before
permitting delivery of the cash and securities owned by Fund to anyone
other than a successor custodian, the question of whether Fund will be
liquidated or function without a custodian. Notwithstanding the foregoing
requirement as to delivery upon termination of this Agreement, Custodian
may make any other delivery of the securities, funds and property of Fund
which is permitted by the Investment Company Act of 1940, Fund's
Certificate of Incorporation and Bylaws then in effect or apply to a court
of competent jurisdiction for the appointment of a successor custodian.
10. NOTICES. Notices, requests, instructions and other writings received by
Fund at the address set forth above or such other address as Fund may have
designated to Custodian in writing will be deemed to have been properly
given to Fund hereunder; and notices, requests, instructions and other
writings received by Custodian at its offices at 000 Xxxxxxxxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000, or to such other address as it may have
designated to Fund in writing, will be deemed to have been properly given
to Custodian hereunder.
11. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
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 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.
17
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
G. Custodian will not release the identity of 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 Fund unless the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without prior
written consent of the other party.
I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statutes, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
---------------------------------
Title:
------------------------------
XXXXXXXX NEW TECHNOLOGIES FUND II, INC.
By:
---------------------------------
Title:
------------------------------
18
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
FOREIGN--Income will be credited contractually on pay day in the markets noted
with Contractual Income Policy. The markets noted with Actual income policy will
be credited income when it is received.
======================= ===================== ===================== ===================== ===================== ====================
MARKET INCOME POLICY MARKET INCOME POLICY MARKET INCOME POLICY
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Argentina Actual Hong Kong Contractual Poland Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Australia Contractual Hungary Actual Portugal Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Austria Contractual India Actual Russia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Bahrain Actual Indonesia Actual Singapore Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Bangladesh Actual Ireland Actual Slovak Republic Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Belgium Contractual Israel Actual South Africa Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Bermuda Actual Italy Contractual South Korea Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
* Bolivia Actual Ivory Coast Actual Spain Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Botswana Actual * Jamaica Actual Sri Lanka Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Brazil Actual Japan Contractual Swaziland Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Canada Contractual Jordan Actual Sweden Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Chile Actual Kenya Actual Switzerland Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
China Actual Lebanon Actual Taiwan Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Colombia Actual Luxembourg Actual Thailand Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Cyprus Actual Malaysia Actual * Trinidad & Actual
Tobago
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Czech Republic Actual Mauritius Actual * Tunisia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Denmark Contractual Mexico Actual Turkey Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Ecuador Actual Morocco Actual United Kingdom Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Egypt Actual Namibia Actual United States See Attached
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Euro CDs Actual New Zealand Contractual Venezuela Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Finland Contractual Norway Contractual Zambia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
France Contractual Oman Actual Zimbabwe Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Germany Contractual Pakistan Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Ghana Actual Peru Actual
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
----------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Greece Actual Philippines Actual
======================= ===================== ===================== ===================== ===================== ====================
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed with
Income Policy of Xxxxxxxxxxx.
00
XXXXXX XXXXXX--
============================ ========================= ========================== ========================= ========================
INCOME TYPE DTC FED PTC PHYSICAL
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
Dividends Contractual N/A N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
Fixed Rate Interest Contractual Contractual N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
Variable Rate Interest Contractual Contractual N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
GNMA I N/A N/A Contractual PD +1 N/A
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
GNMA II N/A N/A Contractual PD *** N/A
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
Mortgages Actual Contractual Contractual Actual
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
---------------------------- ------------------------- -------------------------- ------------------------- ------------------------
Maturities Actual Contractual N/A Actual
============================ ========================= ========================== ========================= ========================
Exceptions to the above Contractual Income Policy include securities
that are:
< Involved in a trade whose settlement either failed, or is pending
over the record date (excluding the United States);
< On loan under a self-directed securities lending program other
than IFTC's own vendor lending program;
< Known to be in a condition of default, or suspected to present a
risk of default or payment delay;
< In the asset categories, without limitation, of Private
Placements, Derivatives, Options, Futures, CMOs, and Zero Coupon
Bonds.
< Securities whose amount of income and redemption cannot be
calculated in advance of payable date, or determined in advance
of actual collection, examples include ADRs;
< Payments received as the result of a corporate action, not
limited to bond calls, mandatory or optional puts, and tender
offers.
*** For GNMA II securities, if the 19th day of the month is a business
day, Payable/Distribution Date is the next business day. If the 19th
is not a business day, but the 20th is a business day,
Payable/Distribution date is the first business day after the 20th. If
both the 19th and 20th are not business days, Payable/Distribution
will be the next business day thereafter.
20
