CUSTODIAN CONTRACT
Between
THE NEW ECONOMY FUND
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be
Held By It 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 6
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Investment and Availability of Federal Funds 7
2.7 Collection of Income 8
2.8 Payment of Fund Moneys 9
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased 11
2.10 Payments for Repurchases or Redemptions
of Shares of the Fund 12
2.11 Appointment of Agents 12
2.12 Deposit of Fund Assets in Securities System 13
2.13 Deposit of Fund Assets in Foreign Banks and
Foreign Securities Depositories 16
2.14 Ownership Certificates for Tax Purposes 20
2.15 Proxies 20
2.16 Communications Relating to Fund
Portfolio Securities 20
2.17 Proper Instructions 21
2.18 Actions Permitted Without Express Authority 22
2.19 Evidence of Authority 22
3. Duties of Custodian With Respect to the Books
of Account and Calculation of Net Asset Value
and Net Income 23
4. Records 23
5. Opinion of Fund's Independent Accountant 24
6. Reports to Fund by Independent Public Accountants 24
7. Compensation of Custodian 25
8. Responsibility of Custodian 25
9. Effective Period, Termination and Amendment 26
10. Successor Custodian 28
(i)
11. Interpretive and Additional Provisions 29
12. Massachusetts Law to Apply 30
13. Prior Contracts 30
14. Notices 30
15. Liabilities of Trustees, Officers, Etc. 31
(ii)
CUSTODIAN CONTRACT
This Contract between The New Economy Fund, a Massachusetts business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at Los Angeles, California, hereinafter called the "Fund",
and State Street Bank and Trust Company, a Massachusetts trust company, having
its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
00000, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets. The
Custodian agrees, subject to the terms of this Contract, to act as Custodian
for the Fund and in connection therewith hold all securities and cash received
by it, and all payments of income, payments of principal or capital
distri-butions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by the Fund for such new
or treasury shares of beneficial interest with no par value, ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held or received by the Fund and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall from time to time employ
one or more sub-custodians, but only in accordance with an applicable vote by
the Board of Trustees of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of the Fund all non-cash property, including all securities owned
by the Fund, other than securities which are maintained pursuant to Section
2.12 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System".
2.2 Delivery of Securities. The Custodian shall release and deliver securities
owned by the Fund held by the Custodian or in a Securities System account of
the Custodian only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the Fund and receipt of
full payment therefor;
2) Upon the receipt of full payment in connection with any repurchase
agreement
related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in accordance
with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar offers
for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the
Fund or into the name of any nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed pursuant to Section 2.11 or into
the name or nominee name of any sub-custodian appointed pursuant to Article 1;
or for exchange for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units; provided that,
in any such case, the new securities are to be delivered to the Custodian;
7) To the broker selling the same for examination in accordance with the
"street delivery" custom;
8) For exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the securities of the
issuer of such securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement; provided that, in any
such case, the new securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the Fund,
but only against receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumental- ities, except that in connection with any loans for which
collateral is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities owned by the
Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, but only against receipt of amounts
borrowed;
12) Upon receipt of instructions from the transfer agent ("Transfer Agent")
for the Fund, for delivery to such Transfer Agent or to the holders of shares
in connection with distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption; and
13) For any other proper corporate purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Trustees or of the Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, specifying the securities
to be delivered, setting forth the purpose for which such delivery is to be
made, declaring such purposes to be proper corporate purposes, and naming the
person or persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other than
bearer securities) shall be registered in the name of the Fund or in the name
of any nominee of the Fund or of any nominee of the Custodian which nominee
shall be assigned exclusively to the Fund, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other registered
investment companies having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section 2.11 or in the
name or nominee name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Fund under the terms of
this Contract shall be in "street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or order by
the Custodian acting pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Fund, other than cash maintained by the
Fund in a bank account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940. Funds held by the Custodian for the Fund
may be deposited by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every such bank
or trust company shall be qualified to act as a custodian under the Investment
Company Act of 1940. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in that
capacity.
2.5 Payments for Shares. The Custodian shall receive from the distributor for
the Fund's Shares or from the Transfer Agent of the Fund and deposit into the
Fund's account such payments as are received for Shares of the Fund issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund and the Transfer Agent of any receipt by it of
payments for Shares of the Fund.
2.6 Investment and Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the receipt of
Proper Instructions,
1) invest in such instruments as may be set forth in such instructions on the
same day as received all federal funds received after a time agreed upon
between the Custodian and the Fund; and
2) make federal funds available to the Fund as of specified times agreed upon
from time to time by the Fund and the Custodian in the amount of checks
received in payment for Shares of the Fund which are deposited into the Fund's
account.
2.7 Collection of Income. The Custodian shall collect on a timely basis all
income and other payments with respect to registered securities held hereunder
to which the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or agent thereof and shall
credit such income, as collected, to the Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach and
present for payment all coupons and other income items requiring presentation
as and when they become due and shall collect interest when due on securities
held hereunder. Income due the Fund on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection therewith, other
than to provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of the
income to which the Fund is properly entitled.
2.8 Payment of Fund Moneys. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out moneys of the Fund in the following cases only;
1) Upon the purchase of securities for the account of the Fund but only (a)
against the delivery of such securities to the Custodian (or any bank, banking
firm or trust company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b)
in the case of a purchase effected through a Securities System, in accordance
with the conditions set forth in Section 2.12 hereof of; or (c) in the case of
repurchase agreements entered into between the Fund and the Custodian, or
another bank, (i) against delivery of the securities either in certificate form
or through an entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such securities from
the Fund;
2) In connection with conversion, exchange or surrender of securities owned
by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as set forth
in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the
Fund: interest, taxes, management, accounting, transfer agent and legal fees,
and operating expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
6) For any other proper purpose, but only upon receipt of, in addition to
Proper Instruc-tions, a certified copy of a resolution of the Board of Trustees
or of the Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased. In
any and every case where payment for purchase of securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Fund to so
pay in advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by the
Custodian, except that in the case of repurchase agreements entered into by the
Fund with a bank which is a member of the Federal Reserve System, the Custodian
may transfer funds to the account of such bank prior to the receipt of written
evidence that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston or of the
safe-keeping receipt, provided that such securities have in fact been so
transferred by book-entry.
2.10 Payments for Repurchases or Redemptions of Shares of the Fund. From such
funds as may be available for the pur-pose but subject to the limitations of
the Declaration of Trust and any applicable votes of the Board of Trustees of
the Fund pursuant thereto, the Custodian shall, upon receipt of instructions
from the Transfer Agent, make funds available for payment to holders of Shares
who have delivered to the Transfer Agent a request for redemption or repurchase
of their Shares. In connection with the redemption or repurchase of Shares of
the Fund, the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commer-cial bank designated by the
redeeming shareholders. In connection with the redemption or repurchase of
Shares of the Fund, the Custodian shall honor checks drawn on the Custodian by
a holder of Shares, which checks have been furnished by the Fund to the holder
of Shares, when presented to the Custodian in accordance with such procedures
and controls as are mutually agreed upon from time to time between the Fund and
the Custodian.
2.11 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
which is itself qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided, however,
that the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by the Fund in a clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, which acts as a securities depository, or in the
book-entry system authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account ("Account") of the
Custodian in the Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the Fund which
are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such securities
have been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the account
of the Fund. The Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System that payment for
such securities has been transferred to the Account, and (ii) the making of any
entry on the records of the Custodian to reflect such transfer and payment for
the account of the Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the Fund at it
request. Upon request, the Custodian shall furnish the Fund confirmation of
each transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the Securities System for the
account of the Fund.
4) The Custodian shall provide the Fund with any report obtained by the
Custodian on the Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited in the Securities
System;
5) The Custodian shall have received the initial or annual certificate, as
the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the Custodian
shall be responsible for the safekeeping of all securities and other property
delivered to it under this Contract and shall be liable to the Fund for any
loss or damage to the Fund resulting from use of the Securities System by
reason of any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from failure of the Custodian
or any such agent to enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that the Fund has
not been made whole for any such loss or damage.
2.13 Deposit of Fund Assets in Foreign Banks and Foreign Securities
Depositories. Where the Custodian deposits, or causes or permits the deposit,
of securities and assets in certain foreign banks and foreign securities
depositories, the following shall apply:
(1) The Custodian shall identify such securities on its books as belonging to
the Fund where such securities are shown on the Custodian's account on the
books of the foreign bank or securities depository.
(2) Where securities are deposited by a foreign bank with a securities
depository, the Custodian shall cause the foreign bank to identify on its books
as belonging to the Custodian, as agent, the securities shown on the foreign
bank's account on the books of the securities depository.
(3) All of the Fund's securities maintained abroad through the Custodian will
be subject only to the Custodian's instructions or those of the Custodian's
agents.
(4) The Custodian will deposit securities in an account with a foreign bank
which includes only assets held for the Custodian for the Custodian's
customers.
(5) The Custodian will supply periodically, as mutually agreed with the Fund,
statements in respect of the securities, which would in-clude identifications
of the foreign entities having custody of the securities and descriptions
thereof. In addition, the Custodian will send the Fund advices and
notifications of any transfers of securities to or from the Fund's account with
the Custodian indicating the then location of the securities.
(6) The Custodian will authorize the holding of securities by a foreign bank
or securities depository only (a) to the extent that the securities are not
subject to any right, charge, security interest, lien or claim of any kind in
favor of the foreign entity except for their safe custody or administration and
(b) to the extent that beneficial ownership of such securities is freely
transferable without the payment of money or value other than for safe custody
or administration; provided, however, that the foregoing shall not apply to the
extent that any of the abovementioned rights, charges, etc., result from any
arrangements made by the Fund with any such foreign bank or securities
depository.
(7) The Custodian shall exercise reasonable care in the performance of the
Custodian's duties, including the selection of foreign banks which may have
custody of securities, but the Custodian will not be required to maintain any
insurance for the benefit of the Fund whose securities may be so held.
(8) The Custodian will indemnify and hold the Fund harmless from and against
any loss which shall occur as the result of the failure of a foreign bank or
securities depository holding the Fund's securities to exercise reasonable care
with respect to the safekeeping of such securities to the same extent that the
Custodian would be required to indemnify and hold the Fund harmless if the
Custodian were holding such securities in Boston.
(9) Access shall be afforded to the Fund's independent public accountants to
such of the Custodian's records and, subject to restric-tions under the
applicable laws, of any foreign bank or securities depository in respect of the
Fund's securities as shall be required by the Fund's accountants in connection
with their examination of the books and records pertaining to the affairs of
your company. As you may reasonably request from time to time, the Custodian
will furnish its auditor's reports on their system of internal accounting
controls as they relate to the service, and the Custodian will use our best
efforts to obtain and furnish similar reports of each foreign bank and foreign
securities depository holding the Fund's securities.
(10) If and when the proposed SEC Rule 17f-5 is adopted by the Commission,
and if any provisions of such Rule conflicts with any of the provisions herein,
it is understood and agreed that any such provision of Rule 17f-5 shall
supersede any such provision herein. Based on the provisions of Rule 17f-5, if
and when adopted, the Custodian may wish to reconsider the responsibility to
the Fund with respect to foreign securities held by the Custodian's foreign
branches, foreign banks, or foreign securities depositories.
2.14 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of the Fund held by it and in connection with transfers of
securities.
2.15 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of the
Fund or a nominee of the Fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.16 Communications Relating to Fund Portfolio Securities. The Custodian shall
transmit promptly to the Fund all written information (including, without
limitation, pendency of calls and maturities of securities and expirations of
rights in connection therewith) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Fund all written information
received by the Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or his agents) making the tender or
exchange offer. If the Fund desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Fund shall notify
the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
2.17 Proper Instructions. Proper Instructions as used throughout this Article
2 means a writing signed or initialed by one or more person or persons as the
Board of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund
shall cause all oral instructions to be confirmed in writing. Upon receipt of
a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees for the Fund accompanied by a detailed
description of procedures approved by the Board of Trustees, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Trustees
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets.
2.18 Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contracts,
provided that all such payments shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts and other
negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with the
sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise directed by the Board
of Trustees of the Fund.
2.19 Evidence of Authority. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other instrument or
paper believed by it to be genuine and to have been properly executed by or on
behalf of the Fund. The Custodian may receive and accept a certified copy of a
vote of the Board of Trustees of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Trustees pursuant to the
Declaration of Trust as described in such vote, and such vote may be considered
as in full force and effect until receipt by the Custodian of written notice to
the contrary.
3. Duties of Custodian with Respect to the Books of Account and Calculation of
Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of
the outstanding shares of the Fund or, if directed in writing to do so by the
Fund, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of the Fund as described in the Fund's currently effective
prospectus and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Fund to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net
asset value per share and the daily income of the Fund shall be made at the
time or times described from time to time in the Fund's currently effective
prospectus.
4. Records
The Custodian shall create and maintain all records relating to its activities
and obligation under this Contract in such manner as will meet the obligations
of the Fund under the Investment Company Act of 1940, with particular attention
to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal
and state tax laws and any other law or administrative rules or procedures
which may be applicable to the Fund. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by the Fund and held by the Custodian and shall,
when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
5. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1, and Form N-1R or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirement of such Commission.
6. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Contract; such
reports, which shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund, to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
not such inadequacies, shall so state.
7. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund
and the Custodian.
8. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness
of any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties. The Custodian
shall be responsible for the safekeeping of all securities and other property
delivered to it and shall be held to the exercise of reasonable care in
carrying out the provisions of this Contract, but shall be kept indemnified by
and shall be without liability to the Fund for any action taken or omitted by
it in good faith without negligence. It shall be entitled to rely on and may
act upon advice of counsel(who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice. Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check shall be in accordance
with a separate Agreement entered into between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or incurring liability of
some other form, the Fund, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.
9. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid
to the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided, however that the
Custodian shall not act under Section 2.12 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Fund have approved the initial use of a particular
Securities System and the receipt of an annual certificate of the Secretary or
an Assistant Secretary that the Board of Trustees have reviewed the use by the
Fund of such Securities System, as required in each case by Rule 17f-4 under
the Investment Company Act of 1940, as amended; provided further, however, that
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
10. Successor Custodian
If a successor custodian shall be appointed by the Board of Trustees of the
Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of it own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of vote referred to or of the
Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Contract as may in their joint opinion be consistent
with the general tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment
of this Contract.
12. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.
13. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
14. Notices
Any and all notices, requests, demands or other communications required or
permitted to be given hereunder shall be deemed to have been duly given when
personally delivered or mailed by first class certified or registered mail,
return receipt requested, addressed to the parties at the addresses set forth
below
(1) If to the Custodian, to:
State Street Bank and Trust Company
Xxx 000
Xxxxxx, XX 00000
Attn: Custody Shareholder Services Q5W
Capital Research and Management
(2) If to the Fund, to:
The New Economy Fund
000 Xxxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
15. Liabilities of Trustees, Officers, Etc.
The obligations of the Fund under this Contract are not binding upon any of
the Trustees, officers, employees, agents or shareholders of the Fund
individually, but bind only the Fund Estate. The Custodian agrees to look
solely to the assets of the Fund for the satisfaction of any liability of the
Fund in respect to this Contract and will not seek recourse against such
Trustees, officers, employees, agents or shareholders or any of them or any of
their personal assets for such satisfaction.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative as of the
11th day of November, 1983.
ATTEST THE NEW ECONOMY FUND
________________________ By _______________________________
Xxxxx X. Xxxxxxxx, President
ATTEST STATE STREET BANK AND TRUST COMPANY
________________________ By _______________________________
Assistant Secretary Vice President
