AMENDMENT TO CUSTODIAL CONTRACT BETWEEN
MIMLIC SERIES FUND, INCORPORATED - INTERNATIONAL STOCK PORTFOLIO
AND
NORWEST BANK MINNESOTA, N.A.
This Amendment made in duplicate this 12th day of January, 1995, by and between
MIMLIC Series Fund, Inc. - International Stock Portfolio, a Minnesota
corporation (hereinafter called the "Fund") and Norwest Bank Minnesota, N.A. a
National Banking Association, having its principal place of business at Sixth
and Marquee, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, (hereinafter called the
"Custodian"),
WITNESSETH:
WHEREAS, the Fund and the Custodian have an existing Custodial Contract
effective as of the 27th day of April 1992, and
WHEREAS, That Custodial Contract, in Section 9 thereof, allows the Amendment of
its provisions by mutual agreement between the fund and the Custodian,
NOW THEREFORE, In consideration of the mutual covenants and agreements
hereinafter contained, the Fund and the Custodian hereby agree to the Amendment
of the Custodial Contract as described below such Amendments to be effective on
the 18th day of January, 1995.
I.
Section 2.9, "Liability for Payment on Advance of Receipt of Securities
Purchased," shall be amended to read:
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
The Custodian shall not make payment for the purchase of domestic
securities for the account of a Fund in advance of receipt of the securities
purchased in the absence of specific written instructions from the Company to so
pay in advance. In any and every case where payment for purchase of domestic
securities for the account of a Fund is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific written
instructions from the Company to so pay in advance, the Custodian shall be
absolutely liable to the Company (for the account of the Fund) for such
securities to the same extent as if the securities had been received by the
Custodian.
II.
Section 2.12, "Deposit of Fund Assets in Securities Systems," shall be amended
to read:
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS.
The Custodian may deposit and/or maintain domestic securities owned by
any Fund in a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Exchange Act, which acts as a securities
depository, or in a Federal Reserve Bank, as Custodian may select, and to permit
such deposited Assets to be registered in the name of Custodian or Custodian's
agent or nominee on the records of such Federal reserve Bank or such registered
clearing agency or the nominee of either (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 domestic securities of a 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 domestic securities
of a Fund which are maintained in a Securities System shall
identify by book-entry those securities belonging to such Fund;
3) The Custodian shall pay for domestic securities purchased for the
account of a Fund upon (i) the simultaneous 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
domestic securities sold for the account of a Fund upon (i) the
simultaneous receipt of advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such transfer and payment for the account of the Fund.
Copies of all advises from the Securities System of transfers of
securities for the account of a Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the
Company at its request. Upon request, the Custodian shall
furnish the Company confirmation of each transfer to or from the
account of a Fund in the form of a written advice or notice and
shall furnish to the Company copies of daily transaction sheets
reflecting each day's transactions in the Securities System for
the account of each Fund.
4) The Custodian shall provide the Company 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;
-2-
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 16 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Company (for the account of each
Fund) for any loss or damage to the applicable Fund(s) resulting
from the use of the Securities System by reason or 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 or employee to enforce
effectively such rights as it may have against the Securities
System; at the election of the Company, 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 applicable Funds have not been made
whole for any such loss or damage.
III.
The Custodial Contract shall be amended by the addition of Section 2.21, and its
subparagraphs:
2.21. DUTIES OF THE CUSTODIAN WITH RESPECT TO FUND PROPERTY HELD OUTSIDE OF
THE UNITED STATES
2.21(a) APPOINTMENT OF FOREIGN SUB-CUSTODIANS.
The Custodian is authorized and instructed, either directly or
indirectly (through one or more sub-custodian U.S. banks), to employed as
sub-custodians for any Fund's securities and other assets maintained outside of
the United States the foreign banking institutions, foreign securities
depositories and foreign clearing agencies designated on Exhibit A hereto, the
Custodian (including any of its agents and subcustodians) is authorized to
directly or indirectly employ or retain any sub-custodian, depository or
clearing agency only if said employed or retained institution qualifies as
either (a) an "eligible foreign custodian", as defined in Rule 17f-5 under the
Investment Company Act of 1940, or (b) a "bank", as defined in Section 2(a)(5)
of the Investment Company Act of 1940, that in turn qualifies as an eligible
domestic custodian under Section 17(f) of the Investment Company Act of 1940;
and provided further that the Custodian shall be liable to the Company for any
loss of any Fund assets custodied with any institution directly or indirectly
employed or retained by the Custodian (or any of its agents or sub-custodians)
that does not meet the qualifications of either clause (a) or (b) of the
preceding proviso.
Upon receipt of Proper Instructions, together with a certified
resolution of the Company's Board of Directors, the Custodian and the Company
may agree to amend Schedule A hereto from time to time to designate additional
or alternative foreign banking institutions, foreign securities depositories and
foreign clearing agencies to act as sub-custodian. Each foreign banking
institution shall be authorized to deposit securities in foreign securities
depositories and foreign clearing agencies authorized pursuant to Rule 17f-5
under the Investment Company Act of 1940. Upon receipt of Proper Instructions
from the Company the Custodian shall promptly
-3-
cease the employment of any one or more of such sub-custodians for maintaining
custody of the assets of the applicable Fund(s).
2.21(b) ASSETS TO BE HELD.
The Custodian shall limit the securities and other assets maintained
in the custody of the foreign sub-custodian to: (a) "foreign securities", as
defined in paragraph (c) (1) of Rule 17f-5 under the Investment Company Act of
1940, and (b) cash and cash equivalents in such amounts as the Custodian or the
Company may determine to be reasonably necessary to effect the foreign
securities transactions of the applicable Fund(s).
2.21(c) SEGREGATION OF SECURITIES.
The Custodian shall identify on its books as belonging to the Company
for the account of one or more of the Fund(s), the foreign securities of each
such Fund held by each foreign sub-custodian. Each agreement pursuant to which
the Custodian or its duly appointed U.S. sub-custodian employees a foreign
banking institution shall require that such institution establish a custody
account for the Custodian (or its U.S. sub-custodian, as the case may be) on
behalf of its customers and physically segregate in that account securities and
other assets of the Custodian's customers, and, in the event that such
institution deposits a Fund's securities in a foreign securities depository, the
sub-custodian shall identify on its books as belonging to the Custodian (or its
U.S. sub-custodian, as the case may be), as agent for the Custodian's customers,
the securities so deposited (all collectively referred to as the "Account").
2.21(d) AGREEMENT WITH FOREIGN BANKING INSTITUTION.
Each Agreement with a foreign banking institution shall provide that:
(a) each Fund's assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking institution
or its creditors, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for each Fund's assets will be freely
transferable without the payment of money or value other than for custody or
administration, which may include payment of stamp duties or government taxes;
(c) adequate records will be maintained identifying the assets as belonging to
the customers of Custodian; (d) officers of or auditors employed by, or other
representatives of the Custodian, including independent public accountants for
each Fund, will be given access to the books and records of the foreign banking
institution relating to its actions given under its agreement with the Custodian
or shall be given confirmation of the contents of such books and records; and
(e) assets of each Fund held by the foreign sub-custodian will be subject only
to the instructions of the Company, the Custodian or their agents.
2.21(e) ACCESS OF INDEPENDENT ACCOUNTANTS OF THE COMPANY.
Upon request of the Company, the Custodian will use its best efforts
to arrange for the independent accountants of the Company to be afforded access
to the books and records of any foreign banking institution employed as a
foreign sub-custodian insofar as such books and records
-4-
relate to the performance of such foreign banking institutions under its
agreement with the Custodian (or its U.S. sub-custodian, as the case may be).
2.21(f) REPORTS BY CUSTODIAN.
The Custodian will supply to the Company from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Fund held by foreign sub-custodians, including but not limited to an
identification of entities having possession of each applicable Fund's
securities and other assets and advices or notifications of any transfers of
securities to or from each custodial account maintained by a foreign
sub-custodian for the Custodian on behalf of each applicable Fund indicating, as
to securities acquired for the Fund, the identity of the entity having physical
possession of such securities.
2.21(g) FOREIGN SECURITIES TRANSACTIONS.
1) Upon receipt of Proper Instruction, which may be continuing
instructions when deemed appropriate by the parties, the
Custodian shall make or cause its foreign sub-custodian to
transfer, exchange or deliver foreign securities owned by the
Company for the account of a Fund, but except to the extent
explicitly herein only in any of the cases specified in Section
2.2.
2) Upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, the
Custodian shall pay out or cause its foreign sub-custodian to pay
out monies of a Fund, but except to the extent explicitly
provided herein only in any of the cases specified in Section
2.8.
3) Settlement and payment for securities received for the account of
a Fund and delivery of securities maintained for the account of a
Fund may, upon receipt of Proper Instructions, be effected in
accordance with the customary or established securities trading
or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivery securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer.
4) With respect to any transaction involving foreign securities, the
Custodian or any sub-custodian in its discretion may case a
Fund's account to be credited on either the contractual
settlement date or the actual settlement date with the proceeds
or any sale or exchange of foreign securities from the account of
the applicable Fund and to be debited on either the contractual
settlement date or the actual settlement date for the cost of
foreign securities purchased or acquired for such Fund according
to Custodian's then current internal policies and procedures
pertaining to securities settlement, which policies and
procedures may change from time to time. Custodian shall advise
the Company of any changes to such policies and procedures. The
Custodian may reverse any such credit or debit made on the
contractual settlement date if the transaction with respect to
which such credit or
-5-
debit was made fails to settle within a reasonable period,
determined by Custodian in its reasonable discretion, after the
contractual settlement date except that if any foreign securities
delivered pursuant to this section are returned by the recipient
thereof, the Custodian may cause any such credits and debits to
be reversed at any time.
5) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the
same extent as set forth in Section 2.3 of this Contract and the
Fund agrees to hold any such nominee harmless from any liability
as a holder of record of such securities.
6) Until the Custodian receives written instructions to the contrary
the Custodian shall, or shall cause the sub-custodian to collect
all interest and dividends paid on securities held in each
applicable Fund's account, unless such payment is in default.
Unless otherwise instructed, the Custodian shall convert
interest, dividends and principal received with respect to
securities in a Fund's account into United States dollar, and the
Custodian shall perform foreign exchange contracts for the
conversion of United States dollar to foreign currencies for the
settlement of trades whenever it is practicable to do so through
customary banking channels. Customary banking channels may vary
based upon industry practice in each jurisdiction, and shall
include the baking facilities of the Custodian's affiliates, in
accordance with such affiliate's then prevailing internal policy
on funds repatriation. All risk and expense incident to such
foreign collection and conversion is the responsibility of each
applicable Fund's account, and Custodian shall have no
responsibility for fluctuating exchange rates affecting
collections or conversions.
2.21(h) FOREIGN SECURITIES LENDING.
Notwithstanding any other provision contained in this Contract, the
Custodian and any sub-custodian shall delivery and receive securities loaned or
returned in connection with securities lending transactions only upon and in
accordance with Proper Instructions; provided, if the Custodian is not the
lending agent in connection with such securities lending, then neither the
Custodian or any sub-custodian shall undertake, or otherwise be responsible for,
(i) marking to market values for such loaned securities.
(ii) collection of dividends, interest or other disbursements or
distributions made with respect to such loaned securities
(iii) receipt of corporate action notices, communications, proxies
or instruments with respect to such loaned securities, and
(iv) custody, safekeeping, valuation or any other actions or
services with respect to any collateral securing any such
securities lending transactions.
-6-
In the event that the Custodian is the applicable Fund's lending agent
in connection with a specific securities loan, the Custodian shall undertake to
perform all of the above duties with regard to such loan, except that the
Company shall not receive, nor be enabled to vote, proxies in connection with
such loaned security.
2.21(i) LIABILITY OF FOREIGN SUB-CUSTODIANS.
Each agreement pursuant to which the Custodian (or its U.S.
sub-custodian bank, as applicable) employees a foreign banking institution as a
foreign sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Custodian's customers from and against any loss, damage, cost,
expense, liability or claim arising out of such sub-custodian's negligence,
fraud, bad faith, willful misconduct or reckless disregard of its duties. At
the election of the Company, it shall be entitled to be subrogated to the right
of the Custodian with respect to any claims against the Custodian's U.S.
sub-custodian bank (if any) or a foreign banking institution as a consequence of
any such loss, damage, cost, expense, liability or claim if and to the extent
that the Company has not been made whole for any such loss, damage, cost,
expense, liability or claim.
2.21(j) MONITORING RESPONSIBILITIES.
The Custodian shall furnish annually to the Company information
concerning the foreign sub-custodians employed by the Custodian (or its U.S.
sub-custodian bank, as applicable). Such information shall be similar in kind
and scope to that furnished to the Company in connection with the initial
approval of this Contract (and any contracts with U.S. and foreign
sub-custodians entered into pursuant hereto). In addition, the Custodian will
promptly inform the Company in the event that the Custodian learns of a material
adverse change in the financial condition of a foreign sub-custodian or is
notified by the Custodian's U.S. sub-custodian bank (if any) or a foreign
banking institution employed as a foreign sub-custodian that there appears to be
a substantial likelihood that its shareholders' equity will decline below $200
million (United States dollar or the equivalent thereof) or that its
shareholder's equity has declined below $200 million (in each case computed in
accordance with generally accepted United States accounting principles).
2.21(k) BRANCHES OF UNITED STATES BANKS.
Except as otherwise set forth in this Contract, the provisions hereof
shall not apply where the custody of any Fund's assets maintained in a foreign
branch of a banking institution which is a "bank" as defined by Section 2(a) (5)
of the Investment Company Act of 1940 which meets the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by Article 1 of this Contract.
2.21(l) EXPROPRIATION INSURANCE.
The Custodian represents that it does not intend to obtain any
insurance for the benefit of the Company of any Fund which protects against the
imposition of exchange control restrictions or the transfer from any foreign
jurisdiction of the proceeds of sale of any securities or
-7-
against confiscation, expropriation or nationalization of any securities or the
assets of the issuer of such securities is organized or in which securities are
held for safekeeping either by Custodian or any sub-custodians in such country.
The Custodian represents that its understanding of the position of the Staff of
the Securities and Exchange Commission is that any investment company investing
in securities of foreign issuers has the responsibility for reviewing the
possibility of the imposition of exchange control restrictions which would
affect the liquidity of such investment company's assets and the possibility of
exposure to political risk, including the appropriateness of insuring against
such risk.
IV.
Section 11 "Records," shall be amended to read:
11. RECORDS.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the company and each Fund under the Investment Company Act of
1940, with particular attention to Section 31 thereof and Rule 31a-1 and 31a-2
thereunder. The Custodian shall also maintain records as directed by the
Company in connection with applicable federal and state tax laws and any other
law or administrative rules or procedures which may be applicable to the Company
and the Funds. With respect to securities and cash deposited with a Securities
System, a sub-custodian or and agent of the Custodian, the Custodian shall
identify on its books all such securities and cash as belonging to the Company
for the account of the applicable Fund(s). All such records shall be the
property of the Company 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 Company. Such records shall be made available to the Company
for review by employees and agents of the Securities and Exchange Commission.
The Custodian shall furnish to the Company, and its agents as directed by the
Company, as of the close of business on the last day of each month a statement
showing all transactions and entries for the account of the Company during that
month, and all holdings as of month-end.
All records so maintained in connection with the performance of its
duties under this Agreement shall remain the property of the Company and, in the
even of termination of this Agreement, shall be delivered to the Company.
Subsequent to such delivery, and surviving the termination of this Agreement,
the Company shall provide the Custodian access to examine and photocopy such
records as the Custodian, in its discretion, deems necessary, for so long as
such records are retained by the Company.
-8-
V.
Section 15, "Responsibility of Custodian," shall be amended to read:
15. 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 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 Company or any Fund for any action taken or omitted by
it in good faith and without negligence. It shall be entitled to rely on and
may act upon advice of counsel of, or reasonably acceptable to, the Company 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 Company.
If the Company requires the Custodian to take any actions with respect
to securities, which action involves the payment of money or which action may,
in the reasonable opinion of the Custodian, result in the Custodian or its
nominee assigned to the Company being liable for the payment of money or
incurring liability of some other form, the Company, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form reasonably satisfactory to it.
If the Company 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 a Fund shall be
security therefor and should the Company fail to repay the Custodian promptly
with respect to any Fund, the Custodian shall be entitled to utilize available
cash and to dispose of assets to the extent necessary to obtain reimbursement.
The Custodian shall not be liable for any loss or damage to the
Company or any Fund resulting from participation in a securities depository
unless such loss or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against any securities
depository or from use of a sub-custodian or agent. Anything in this Contract
to the contrary notwithstanding, the Custodian shall exercise, in the
performance of its obligations undertaken or reasonably assumed with respect to
this Agreement, reasonable care, for which the Custodian shall be responsibility
to the same extent as if it were performing such duties directly. The Custodian
shall be responsible for the securities and cash held by or deposited with any
sub-custodian or agent to the same extent as if such securities and cash were
directly held by or
-9-
deposited with the Custodian. The Custodian hereby agrees that it shall
indemnify and hold the Company and each applicable Fund harmless from and
against any loss which shall occur as a result of the failure of a foreign
sub-custodian holding the securities and cash to provide a level of safeguards
for maintaining any Fund's securities and cash in the United States.
The Custodian agrees to indemnify and hold the Company and each of the
Funds harmless for any and all loss, liability and expense, including reasonable
legal fees and expenses, arising out of the Custodian's own negligence or
willful misconduct or that of its officers, agents, sub-custodians or employees
in the performance of the Custodian's duties and obligations under this
Contract.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized officers as of the day
and year first above written.
MIMLIC SERIES FUND, INCORPORATED - INTERNATIONAL STOCK PORTFOLIO
By:
---------------------------
Attest
By:
---------------------------
NORWEST BANK MINNESOTA, N.A.
By:
---------------------------
Attest
By:
---------------------------
-10-