Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 4 contracts

Samples: Custody Agreement (Madison Mosaic Tax-Free Trust), Custody Agreement (Madison Mosaic Government Money Market), Custody Agreement (Madison Mosaic Equity Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall ~~defend~~be paid as compensation for its services pursuant to this Agreement such compensation as may from time to time be agreed upon in writing between the two parties. Until modified in writing, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to such compensation shall be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3Schedule B attached hereto. The Custodian shall not be liable for any ~~money~~ action taken in good faith upon any certificate herein described or ~~collected funds~~ certified copy of any resolution of the Board, and may rely on the genuineness of any such document which it may in ~~U. S. dollars deposited in a Federal Reserve Bank other than~~ good faith believe to have been validly executed. The Company agrees to indemnify and hold harmless the Custodian ~~in accordance with a Certificate described in clause~~ and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (iiincluding reasonable counsel fees) ~~of paragraph 2 (e) of Article IV hereof, nor be liable for~~ incurred or ~~considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by~~ assessed against it ~~on behalf of the Funds until the Custodian actually receives and collects such money directly~~ or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement nominee in connection with the ~~appointment~~ performance of this Agreement, except such as may arise from its or ~~activities of such Depositories~~ its nominee's own bad faith, negligent action, negligent failure to act or ~~Sub-Custodians. 8~~willful misconduct. The Custodian is authorized to charge any account of the Fund for such items. In the event of any advance of cash for any purpose made by the Custodian resulting from orders or instructions of the Company, or in the event that the Custodian or its nominee shall ~~not~~ incur or be ~~under~~ assessed any ~~duty~~ taxes, charges, expenses, assessments, claims or ~~obligation~~ liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own bad faith, negligent action, negligent failure to ~~ascertain whether~~ act or willful misconduct, any ~~Securities~~ property at any time ~~delivered to or~~ held ~~by it~~ for the account of the ~~Funds are such as properly may~~ Company shall be ~~held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9~~security therefor. The Custodian ~~shall treat~~ agrees to indemnify and hold harmless the Company from all ~~records~~ charges, expenses, assessments, and ~~other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless~~ claims/liabilities (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including reasonable counsel fees~~, for which~~ ) incurred or assessed against it ~~shall be entitled to reimbursement under~~ in connection with the ~~provisions~~ performance of this ~~Agreement~~ Agreement, except such as ~~determined by agreement of~~ may arise from the ~~Custodian and the applicable Trust~~ Company's own bad faith, negligent action, negligent failure to act or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianwillful misconduct. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 3 contracts

Samples: Custodian Agreement (Rockland Funds Trust), Custodian Agreement (Rockland Funds Trust), Custodian Agreement (Amquest Matrix Funds Inc)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the ~~sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the~~ issue or sale of any ~~shares~~ of the ~~Funds~~Fund’s Shares, or the sufficiency of the amount to be received therefor; (dc) The legality of the redemption of any ~~shares~~ of the ~~Funds~~Fund’s Shares, or the propriety of the amount to be paid therefor; (ed) The legality of the declaration or payment of any dividend by the ~~Trust in respect~~ Fund; (e) The legality of ~~shares of~~ any borrowing by the ~~Funds~~Fund using Securities as collateral; (f) The legality of any ~~borrowing~~ loan of portfolio Securities pursuant to Article XIV of this Agreement, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by ~~the Trust~~a broker, ~~on behalf~~ dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities of the ~~Funds~~Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, ~~using~~ but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities ~~as collateral;~~of the Fund are lent pursuant to Article XIV of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the applicable Series of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (g) The sufficiency or value of any ~~deposit made~~ amounts of money and/or Securities held in any Margin Account, Segregated Security Account or Collateral Account in connection with transactions by the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of the Custodian’s receipt or non-receipt of any such payment; provided however that the Custodian, upon the Fund’s written request, shall, as Custodian, demand from any broker, dealer, futures commission merchant or Clearing Member identified by the Fund the payment of any variation margin payment or similar payment that the Fund asserts it is entitled to receive pursuant to the terms of a ~~Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof~~Margin Account Agreement or otherwise from such broker, dealer, futures commission merchant or Clearing Member. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, ~~draft,~~ draft or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund’s interest at the Book-Entry System or the Depository. 4. The Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange, offers, tenders, interest rate changes or similar matters relating to Securities held in the Depository, unless the Custodian shall have actually received timely notice from the Depository. In no event shall the Custodian have any responsibility or liability for the failure of the Depository to collect, or for the late collection or late crediting by the Depository of any amount payable upon Securities deposited in the Depository which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in the Depository, the Custodian shall make a claim against the Depository on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action, suit or proceeding in respect to any Securities held by the Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding paragraph 5 of this Article IX, the~~ The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 7. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in the Certificate, which shall, if requested by the Custodian, be accompanied by an approving resolution of the Fund’s Board adopted in accordance with Rule 17f-5 under the Investment Company Act of 1940, as amended. Notwithstanding anything to the contrary contained in this Agreement, the Custodian shall hold harmless and indemnify the Fund from and against any losses, actions, claims, demands, expenses and proceedings, including counsel fees, that occur as a ~~Certificate. Current Depository(s) and~~ result of any act or omission of any Foreign Sub-~~Custodians(s) are noted in Appendix B. The~~ Custodian ~~shall not be relieved~~ or Depository with respect to the safekeeping of ~~any obligation or liability under this Agreement in connection with~~ moneys and securities of the ~~appointment or activities of such Depositories or Sub-Custodians~~Fund. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations of Trust and the Trusts' By-Laws~~its organization documents. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) ~~the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10.~~ The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all reasonable out-of-pocket expenses and such compensation and fees as ~~shall be determined pursuant to Appendix C attached~~ are specified on Schedule A hereto~~, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds~~. The Custodian shall not deem amounts payable in respect of foreign custodial services to be out-of-pocket expenses, it being the parties’ intention that all fees for such services shall be as set forth on Schedule B hereto and shall be provided for the term of this Agreement without any automatic or unilateral increase. The Custodian shall have the right to unilaterally increase the figures on Schedule A on or after each succeeding March 1 by an amount equal to 50% of the increase in the Consumer Price Index for the calendar year ending on the December 31 immediately preceding the calendar year in which such March 1 occurs, provided, however, that during each such annual period commencing on a March 1, the aggregate increase during such period shall not be in excess of 10%. Any increase by the Custodian shall be specified in a written notice delivered to the Fund at least thirty days prior to the effective date of the increase. The Custodian may charge such compensation and any expenses incurred by the Custodian in the performance of its duties pursuant to such agreement against any money held by it for the account of the Fund. The Custodian shall also be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the ~~Funds. Notwithstanding the above, to the extent~~ Fund. (b) The Fund shall receive a credit for each calendar month against such compensation and ~~expenses~~ fees of the Custodian ~~are paid~~ as may be payable by the Fund with respect to such calendar month in an amount equal to the ~~Custodian~~ aggregate of its Earnings Credit for such calendar month. In no event may any Earnings Credits be carried forward to any fiscal year other than the fiscal year in which it was earned, or, unless permitted by ~~the Adviser pursuant~~ applicable law, transferred to, or utilized by, any other person or entity, provided that any such transferred Earnings Credit can be used only to ~~the services agreements between the Trusts~~ offset compensation and ~~the Adviser, no charges shall be made against the accounts~~ fees of the ~~Funds by~~ Custodian for services rendered to such transferee and cannot be used to pay the Custodian’s out-of-pocket expenses. For purposes of this sub-section (b), the Fund is permitted to transfer Earnings Credits only to The Dreyfus Corporation, its affiliates and/or any investment company now or in the future for which The Dreyfus Corporation or any of its affiliates acts as the sole investment adviser. For purposes of this sub-section (b), a fiscal year shall mean the twelve-month period commencing on the effective date of this Agreement and on each anniversary thereof. 1110. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V XI hereof. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof, confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, telex or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person. 11. The Custodian shall be entitled to rely upon any instrument, instruction or notice received by the Custodian and reasonably believed by the Custodian to be given in accordance with the terms and conditions of any Margin Account Agreement. Without limiting the generality of the foregoing, the Custodian shall be under no duty to inquire into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. 12. The ~~Custodian will (a) set up~~ books and ~~maintain proper books of account and complete~~ records ~~of all transactions~~ pertaining to the Fund which are in the ~~accounts maintained by~~ possession of the Custodian ~~hereunder in such manner as will meet~~ shall be the ~~obligations~~ property of the ~~Funds under~~ Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund’s authorized representatives, shall have access to such books and records during the Custodian’s normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund’s authorized representative at the Fund’s expense. 13. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry System or the ~~Depository~~ Depository, or O.C.C., and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 14. The Fund agrees to indemnify the Custodian ~~performs only~~ against and save the ~~services~~ Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney’s fees, howsoever arising or incurred because of ~~a custodian and shall have no responsibility for~~ or in connection with the ~~management, investment~~ Custodian’s payment or ~~reinvestment~~ non-payment of checks pursuant to paragraph 6 of Article XII as part of any check redemption privilege program of the ~~Securities~~ Fund, except for any such liability, claim, loss and demand arising out of the Custodian’s own negligence or willful misconduct. 15. Subject to the foregoing provisions of this Agreement, the Custodian may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the Custodian in accordance with the customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 16. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibilities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 3 contracts

Samples: Custody Agreement (Dreyfus Institutional Reserves Funds), Custody Agreement (Dreyfus Institutional Reserves Funds), Custody Agreement (Dreyfus Premier New Leaders Fund Inc)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion. The Custodian shall promptly notify the Fund whenever it intends to apply for and obtain advice or an opinion of counsel to at the ~~Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with~~ expense of the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawFund. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The Custodian acknowledges~~ In the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and event that the Custodian ~~shall not be entitled to seek satisfaction~~ should determine that there has been any loss or damage involving Securities of the Fund deposited with any ~~such obligation or liability from~~ Depository, the ~~Trusts' shareholders~~Custodian will enforce, ~~Trustees~~for the benefit of the Fund, ~~Officers, employees or agents~~the Custodian's rights against the Depository in connection with any of the Securities of the Fund deposited by the Custodian with the Depository. The ~~obligations of~~ Custodian shall credit to the ~~parties hereto under this paragraph shall survive~~ Fund's account hereunder the ~~termination of this Agreement~~amount, if any, recovered by the Custodian from or for the account of, any Depository as reimbursement for the loss of, or damage to, any Securities deposited by the Custodian hereunder with said Depository. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the ~~account of the Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the ~~account of the Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~capital stock of the Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of capital stock of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (f) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral;; or (g) The ~~sufficiency~~ legality of any ~~deposit made~~ loan of portfolio Securities pursuant to Article VIII of this Agreement, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by a ~~Certificate described~~ broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the fund are lent pursuant to Article VIII of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in ~~clause (ii) of paragraph 2 (e) of Article IV hereof~~the event that such dividends or interest are not paid and received when due. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the ~~Book-~~Book- Entry System or the Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 87. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations~~ its Articles of ~~Trust and the Trusts' By-Laws~~Incorporation. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all out-of-pocket expenses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf~~ Fund. The Custodian may charge such compensation and any expenses incurred by the Custodian in the performance of its duties pursuant to such agreement against any money held by it for the account of the ~~Funds~~Fund. The Custodian shall also be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to ~~Article~~ Articles IV or V hereof. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, ~~telex~~ telecopier or other similar device, or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming ~~instructions are~~ Certificate or facsimile thereof is not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions reasonably appear to have been received from an Authorized Person. 1210. The ~~Custodian will (a) set up~~ books and ~~maintain proper books of account and complete~~ records ~~of all transactions~~ pertaining to the Fund which are in the ~~accounts maintained by~~ possession of the Custodian ~~hereunder in such manner as will meet~~ shall be the ~~obligations~~ property of the ~~Funds under~~ Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund's authorized representative at the Fund's expense. 1311. The Custodian ~~and its Sub-Custodians~~ shall promptly ~~send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry System or the Depository and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 1412. The Fund agrees to indemnify the Custodian against and save the Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of or in connection with the Custodian's payment or non-payment of checks pursuant to paragraph 6 of Article VI as part of any check redemption privilege program of the Fund, except for any such liability, claim, loss and demand arising out of the Custodian's own negligence or willful misconduct. 13. The Custodian ~~performs only the services of a custodian and~~ shall have no ~~responsibility for the management~~duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, ~~investment~~ and no covenant or ~~reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent~~ obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 3 contracts

Samples: Custodian Agreement (Papp Focus Fund Inc), Custodian Agreement (Papp Small & Mid Cap Growth Fund Inc), Custodian Agreement (Papp America Pacific Rim Fund Inc)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the ~~sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the~~ issue or sale of any ~~shares~~ of the ~~Funds~~Fund's Shares, or the sufficiency of the amount to be received therefor; (dc) The legality of the redemption of any ~~shares~~ of the ~~Funds~~Fund's Shares, or the propriety of the amount to be paid therefor; (ed) The legality of the declaration or payment of any dividend by the ~~Trust in respect~~ Fund; (e) The legality of ~~shares of~~ any borrowing by the ~~Funds~~Fund using Securities as collateral; (f) The legality of any ~~borrowing~~ loan of portfolio Securities pursuant to Article XIV of this Agreement, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by ~~the Trust~~a broker, ~~on behalf~~ dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities of the ~~Funds~~Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, ~~using~~ but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities ~~as collateral;~~of the Fund are lent pursuant to Article XIV of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the applicable Series of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (g) The sufficiency or value of any ~~deposit made~~ amounts of money and/or Securities held in any Margin Account, Segregated Security Account or Collateral Account in connection with transactions by the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of the Custodian's receipt or non-receipt of any such payment; provided however that the Custodian, upon the Fund's written request, shall, as Custodian, demand from any broker, dealer, futures commission merchant or Clearing Member identified by the Fund the payment of any variation margin payment or similar payment that the Fund asserts it is entitled to receive pursuant to the terms of a ~~Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof~~Margin Account Agreement or otherwise from such broker, dealer, futures commission merchant or Clearing Member. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, ~~draft,~~ draft or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or the Depository. 4. The Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange, offers, tenders, interest rate changes or similar matters relating to Securities held in the Depository, unless the Custodian shall have actually received timely notice from the Depository. In no event shall the Custodian have any responsibility or liability for the failure of the Depository to collect, or for the late collection or late crediting by the Depository of any amount payable upon Securities deposited in the Depository which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in the Depository, the Custodian shall make a claim against the Depository on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action, suit or proceeding in respect to any Securities held by the Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding paragraph 5 of this Article IX, the~~ The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 7. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in the Certificate, which shall, if requested by the Custodian, be accompanied by an approving resolution of the Fund's Board adopted in accordance with Rule 17f-5 under the Investment Company Act of 1940, as amended. Notwithstanding anything to the contrary contained in this Agreement, the Custodian shall hold harmless and indemnify the Fund from and against any losses, actions, claims, demands, expenses and proceedings, including counsel fees, that occur as a ~~Certificate. Current Depository(s) and~~ result of any act or omission of any Foreign Sub-~~Custodians(s) are noted in Appendix B. The~~ Custodian ~~shall not be relieved~~ or Depository with respect to the safekeeping of ~~any obligation or liability under this Agreement in connection with~~ moneys and securities of the ~~appointment or activities of such Depositories or Sub-Custodians~~Fund. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations of Trust and the Trusts' By-Laws~~its organization documents. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) ~~the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10.~~ The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all reasonable out-of-pocket expenses and such compensation and fees as ~~shall be determined pursuant to Appendix C attached~~ are specified on Schedule A hereto~~, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds~~. The Custodian shall not deem amounts payable in respect of foreign custodial services to be out-of-pocket expenses, it being the parties' intention that all fees for such services shall be as set forth on Schedule B hereto and shall be provided for the term of this Agreement without any automatic or unilateral increase. The Custodian shall have the right to unilaterally increase the figures on Schedule A on or after each succeeding March 1 by an amount equal to 50% of the increase in the Consumer Price Index for the calendar year ending on the December 31 immediately preceding the calendar year in which such March 1 occurs, provided, however, that during each such annual period commencing on a March 1, the aggregate increase during such period shall not be in excess of 10%. Any increase by the Custodian shall be specified in a written notice delivered to the Fund at least thirty days prior to the effective date of the increase. The Custodian may charge such compensation and any expenses incurred by the Custodian in the performance of its duties pursuant to such agreement against any money held by it for the account of the Fund. The Custodian shall also be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the ~~Funds. Notwithstanding the above, to the extent~~ Fund. (b) The Fund shall receive a credit for each calendar month against such compensation and ~~expenses~~ fees of the Custodian ~~are paid~~ as may be payable by the Fund with respect to such calendar month in an amount equal to the ~~Custodian~~ aggregate of its Earnings Credit for such calendar month. In no event may any Earnings Credits be carried forward to any fiscal year other than the fiscal year in which it was earned, or, unless permitted by ~~the Adviser pursuant~~ applicable law, transferred to, or utilized by, any other person or entity, provided that any such transferred Earnings Credit can be used only to ~~the services agreements between the Trusts~~ offset compensation and ~~the Adviser, no charges shall be made against the accounts~~ fees of the ~~Funds by~~ Custodian for services rendered to such transferee and cannot be used to pay the Custodian's out-of-pocket expenses. For purposes of this sub-section (b), the Fund is permitted to transfer Earnings Credits only to The Dreyfus Corporation, its affiliates and/or any investment company now or in the future for which The Dreyfus Corporation or any of its affiliates acts as the sole investment adviser. For purposes of this sub-section (b), a fiscal year shall mean the twelve-month period commencing on the effective date of this Agreement and on each anniversary thereof. 1110. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V XI hereof. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof, confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, telex or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person. 11. The Custodian shall be entitled to rely upon any instrument, instruction or notice received by the Custodian and reasonably believed by the Custodian to be given in accordance with the terms and conditions of any Margin Account Agreement. Without limiting the generality of the foregoing, the Custodian shall be under no duty to inquire into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. 12. The ~~Custodian will (a) set up~~ books and ~~maintain proper books of account and complete~~ records ~~of all transactions~~ pertaining to the Fund which are in the ~~accounts maintained by~~ possession of the Custodian ~~hereunder in such manner as will meet~~ shall be the ~~obligations~~ property of the ~~Funds under~~ Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund's authorized representative at the Fund's expense. 13. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry System or the ~~Depository~~ Depository, or O.C.C., and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 14. The Fund agrees to indemnify the Custodian ~~performs only~~ against and save the ~~services~~ Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of ~~a custodian and shall have no responsibility for~~ or in connection with the ~~management, investment~~ Custodian's payment or ~~reinvestment~~ non-payment of checks pursuant to paragraph 6 of Article XII as part of any check redemption privilege program of the ~~Securities~~ Fund, except for any such liability, claim, loss and demand arising out of the Custodian's own negligence or willful misconduct. 15. Subject to the foregoing provisions of this Agreement, the Custodian may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the Custodian in accordance with the customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 16. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibilities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 3 contracts

Samples: Custody Agreement (Dreyfus Premier Manager Funds), Custody Agreement (Dreyfus Institutional Cash Advantage Funds), Custody Agreement (Dreyfus Citizens Select Funds)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage,~~ damage including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or ~~willful~~ misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts at the expense of the Funds,~~ Fund or of its own ~~counsel at its own expense~~counsel, the expenses for which may be charged to the Fund upon the mutual agreement of the Fund and the Custodian, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or ~~any Depository~~ the depositories arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The~~ If the Fund incurs any loss or damages resulting from the use of the Book-Entry System arising by reason of the negligence, misfeasance or misconduct on the part of any depository, the Custodian ~~acknowledges~~ agrees to initiate a claim through normal banking channels with the ~~limitation~~ depository for the amount of ~~liability~~ such loss or damage, subject to the provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph ~~shall survive the termination~~ 5 of this ~~Agreement~~Article VII. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any ~~Securities~~ securities, including covered calls, purchased by or for the ~~account of the Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid ~~therefor~~therefore; (b) The legality of the sale of any ~~Securities~~ securities, including covered calls, by or for the ~~account of the Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~capital stock of the Fund, or the sufficiency of the amount to be received ~~therefor~~therefore; (d) The legality of the ~~redemption~~ declaration of any dividend by the Fund, or the legality of the issue of any shares of the ~~Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or~~ Fund's capital stock in payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofstock dividend. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or ~~Depository~~the depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the ~~Securities~~ securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a ~~Certificate~~ certificate signed in the name of the Fund by any two officers, and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian ~~may~~ may, with the prior approval of the Fund, appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited ~~to,~~ to banking institutions located in foreign countries, ~~or Securities~~ of securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in ~~a Certificate~~written instructions from two officers of the Fund. ~~Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall~~ Such appointment may include, but is not ~~be relieved~~ limited to, the deposit of all or any ~~obligation or liability under this Agreement in connection~~ portion of the securities of the Fund with ~~the appointment or activities of such Depositories or Sub-Custodians~~MSTC. 87. The Custodian shall not be under any duty or obligation to ascertain whether any ~~Securities~~ securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as may properly ~~may~~ be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations~~ its Articles of ~~Trust and the Trusts' By-Laws~~Incorporation. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the ~~Custodian~~ Custodian, such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian ~~shall be entitled~~ may charge such compensation and any costs or expenses incurred by the Custodian in the performance of its duties pursuant to ~~charge~~ such agreement against any money held by it for the account of the ~~Funds~~ Fund, provided, however, that Custodian shall provide the ~~amount~~ Fund with 48 hours' prior written notice that such charge will be made. If the Custodian receives a written notice from the Fund that it disputes the costs or expenses proposed to be charged or the mathematical calculation of ~~any loss~~the Custodian's compensation within the 48-hour notice period, ~~damage~~Custodian shall not charge the Fund's account until the parties agree as to the correct calculation of the compensation or the correct charge for costs and/or expenses, ~~liability or expense~~as the case may be. Furthermore, ~~including counsel fees~~if the parties are unable to reach such an agreement within five business days from the time Custodian first receives the Fund's notice of dispute as herein provided, ~~for which it shall be entitled to reimbursement under the provisions of~~ either party may terminate this Agreement ~~as determined by agreement of~~ upon 30 days' prior written notice to the ~~Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired~~other party. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of ~~Securities~~ securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any ~~Certificate~~certificate, notice or other instrument in writing received by the Custodian and believed by the Custodian to be genuine and to be sent by two officers of the Fund as defined in Article IX. The Custodian shall be entitled to rely upon any ~~Oral Instructions and any Written Instructions actually~~ instructions received by the Custodian pursuant to Article ~~IV or V hereof~~III hereof with regard to the purchase and sale of money market securities and believed by the Custodian to be genuine and to be given by an authorized person. ~~Each Trust~~ The Fund agrees to forward to the Custodian ~~Written Instructions~~ written instructions from ~~Authorized Persons~~ an authorized person confirming ~~Oral Instructions~~ such oral instructions in such manner so that such ~~Written Instructions~~ written instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such ~~Oral Instructions~~ oral instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon ~~Oral Instructions~~ oral instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions appear to have been received from a duly authorized person. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 3 contracts

Samples: Custodian Agreement (Iaa Trust Asset Allocation Fund Inc), Custodian Agreement (Iaa Trust Money Market Fund Inc), Custodian Agreement (Iaa Trust Tax Exempt Bond Fund Inc)

Concerning the Custodian. 1(a) The acceptance by the Custodian of its appointment hereunder is expressly subject to the following terms, which shall govern and apply to each of the terms and provisions of this Section 13 (whether or not so stated therein or herein): (i) The Custodian shall have no duties, obligations or responsibilities under this Section 13 or with respect to the Required Loan Documents except for such duties, obligations or responsibilities as are expressly and specifically set forth in this Section 13 as duties obligations or responsibilities on its part to be performed, and the duties obligations and responsibilities of the Custodian shall be determined solely by the express provisions of this Section 13. ~~Except~~ No implied duties, obligations or responsibilities shall be read into this Agreement against, or on the part of, the Custodian. Any permissive right of the Custodian to take any action hereunder shall not be construed as ~~otherwise provided herein~~a duty. (ii) The Custodian makes no representations as to and shall not be responsible for or required to verify (x) the validity, legality, enforceability, due authorization, effectiveness, recordability, insurability, sufficiency, value, form, substance, or genuineness of any of the documents contained in any Required Loan Document or (y) the collectability, validity, transferability, insurability, value, effectiveness, perfection, priority or suitability of any Required Loan Document or any document contained therein. (iii) The Custodian shall have no responsibilities or duties with respect to any Required Loan Document while such Required Loan Document is not in its possession. (iv) The Custodian may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, statement, certificate, request, waiver, consent, opinion, report, receipt or other paper, electronic transmission or document furnished to it in accordance with this Section 13, not only as to its due execution and validity, but also as to the truth and accuracy of any information therein contained, which it in good faith believes to be genuine and signed or presented by the proper person (which in the case of any instruction from or on behalf of the Borrower shall be an authorized Person). The Custodian shall be entitled to reasonably presume the genuineness and due authority of any signature appearing thereon. The Custodian shall not be bound to make any independent investigation into the facts or matters stated in any such notice, instruction, statement, certificate, request, waiver, consent, opinion, report, receipt or other paper, electronic transmission or document, provided, however, that if the form thereof is specifically prescribed by the terms of this Section 13, the Custodian shall ~~not~~ examine the same to determine whether it substantially conforms on its face to the requirements set forth herein. (v) Neither the Custodian nor any of its directors, officers or employees shall be liable to anyone for any ~~loss~~ error of judgment, or ~~damage, including counsel fees, resulting from its action or omission to act or otherwise, except~~ for any ~~such loss~~ act done or ~~damage arising out~~ step taken or omitted to be taken by it (or any of its ~~own negligence or willful misconduct. Each Trust~~directors, ~~on behalf~~ officers of ~~its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder~~employees), ~~shall defend~~or for any mistake of fact or law, ~~indemnify and hold harmless the Custodian~~or for anything which it may do or refrain from doing in connection herewith, ~~its officers~~unless such action constitutes gross negligence, ~~employees and agents~~fraud, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission bad faith or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. ~~2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for:~~ (avi) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any ~~money~~ action taken by it in good faith and reasonably believed by it to be within powers conferred upon it, or ~~collected funds~~ taken by it pursuant to any direction or instruction received by it in ~~U. S. dollars deposited~~ accordance with this Section 13, or omitted to be taken by it by reason of the lack of direction or instruction required hereby for such action. (vii) The Custodian may consult with, and obtain advice from, legal counsel selected in ~~a Federal Reserve Bank other than~~ good faith, with respect to any question as to any of the provisions hereof or its duties hereunder, or any matter relating hereto, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by the Custodian in good faith in accordance with ~~a Certificate described~~ the advice or opinion of such counsel. The reasonable and documented out-of-pocket costs and expenses of such advice or opinion shall be reimbursed by the Borrower pursuant to, and to the extent provided for in, Section 12.9 hereof. (viii) No provision of this Agreement shall require the Custodian to expend or risk its own funds, take any action hereunder (or omit to take any action) or otherwise incur any financial liability in ~~clause~~ the performance of its duties under this Section 13 if it shall have grounds for believing that repayment of such funds or indemnity satisfactory is not assured to it. (iiix) ~~of paragraph 2 (e) of Article IV hereof~~The Custodian may act or exercise its duties or powers hereunder through agents or attorneys, ~~nor~~ and the Custodian shall not be liable or responsible for the actions or ~~considered to be~~ omissions of any such agent or attorney appointed and maintained with due care. (x) If the Custodian of shall request instructions from each applicable Borrower with respect to any ~~money~~act, ~~whether~~ action or ~~not represented by any check~~failure to act in connection with this Agreement, ~~draft, or other instrument for~~ the ~~payment of money, received by it on behalf of the Funds~~ Custodian shall be entitled to refrain from taking such action and continue to refrain from acting unless and until the Custodian ~~actually receives~~ shall have received written instructions from such Borrower without incurring any liability therefor to such Borrower, or any other Person. (xi) In no event shall the Custodian or its directors, affiliates, officers, agents and ~~collects such money directly~~ employees be held liable for any lost profits or exemplary, punitive, special, indirect or consequential damages of any kind resulting from any action taken or omitted to be taken by ~~the final crediting~~ it or them hereunder or in connection herewith even if advised of the ~~account representing the Funds' interest at the Book-Entry System or Depository~~possibility of such damages. 4. (xii) The Custodian shall not be ~~under any duty or obligation~~ deemed to ~~take action to effect collection~~ have notice of any ~~amount due~~ fact, claim or demand with respect hereto unless a Responsible Officer of the Custodian has actual knowledge thereof or written notice thereof. Any other provision of this Agreement to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IXcontrary notwithstanding, the Custodian shall have no notice of and shall not be ~~under~~ bound by any ~~duty or obligation to take action to effect collection~~ of ~~any amount, if~~ the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions ~~approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved~~ of any ~~obligation~~ other document or ~~liability under this Agreement in connection with~~ agreement unless the ~~appointment~~ Custodian is a signatory party to that document or ~~activities of such Depositories or Sub-Custodians~~agreement. ~~8. The~~ (xiii) Nothing in this Section 13 shall be deemed to impose on the Custodian ~~shall not be under~~ any duty to qualify to do business in any jurisdiction, other than (x) any jurisdiction where any Required Loan Document is or ~~obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly~~ may be held by the ~~Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The~~ Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time ~~owned by~~ hereunder, and (y) any jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to qualify could have a material adverse effect on the ~~Funds.~~ Custodian or its property or business or on the ability of the Custodian to perform its duties hereunder. (xiv) The Custodian shall have only the duties and responsibilities with respect to the matters set forth herein as is ~~not a selling agent for shares of the Funds~~ expressly set forth in writing herein and ~~performance of its duties as a custodial agent~~ shall not be deemed to be an agent, bailee or fiduciary for any party hereto. The Custodian shall be fully protected in acting or refraining from acting in good faith without investigation on any notice, instruction or request purportedly furnished to it by the Borrower in accordance with the terms hereof, in which case the parties hereto agree that the Custodian has no duty to make any further inquiry whatsoever. It is hereby acknowledged and agreed that the Custodian has no knowledge of (and is not required to know) the terms and provisions of any loan agreements or any other related documentation to which the Lender may be a ~~recommendation to~~ party or whether any actions by the Borrower or any other person or entity are permitted or a breach thereunder or consistent or inconsistent therewith. (xv) The provisions of this Section 13.3 shall survive the termination of this Agreement and the resignation or removal of the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 3 contracts

Samples: Loan and Security Agreement (Kayne Anderson BDC, Inc.), Loan and Security Agreement (Kayne Anderson BDC, Inc.), Loan and Security Agreement (Kayne Anderson BDC, Inc.)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust, on behalf of its Funds and only from applicable Fund Assets~~ The Portfolio (or insurance purchased by ~~a Trust~~ the Portfolio with respect to its liabilities ~~on behalf of its Funds~~ hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each Trust~~the Portfolio's duties ~~with respect to its Funds~~ hereunder or any other action or inaction of the ~~respective Trust~~ Portfolio or its Trustees, ~~Officers~~officers, employees or ~~agents as to the Funds~~agents, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each Trust~~ the Portfolio and its Trustees, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Portfolio hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Portfolio, except such as may arise from the negligent action, omission or willful misconduct of the ~~Trust~~Portfolio, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Portfolio at the expense of the ~~Funds~~Portfolio, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Portfolio, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Portfolio shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Portfolio for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust, on behalf of its Funds,~~ the Portfolio of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a Fund~~the Portfolio's ~~accounts~~ account or penalties imposed on the ~~Trusts, in connection with the Funds, therefrom or~~ Portfolio for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Portfolio, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Portfolio, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Portfolio, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Portfolio, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Portfolio; (f) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Portfolio using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Portfolio until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Portfolio's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Portfolio from the Dividend and Transfer Agent of the ~~Funds~~ Portfolio nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Portfolio of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Portfolio in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Portfolio with respect to ~~Funds~~ Portfolio Assets will be credited to the account of the ~~Funds~~ Portfolio as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is if refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as a Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Portfolio, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by ~~it for~~ the ~~account of the Funds are such as properly may be held by the Funds~~ Portfolio under the provisions of the ~~Declarations of Trust and the Trusts'~~ Portfolio's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Portfolio, ~~the Funds~~ and the ~~Funds'~~ Portfolio Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective Trust~~ Portfolio shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Portfolio agrees to pay to the ~~Custodian~~ Custodian, from Portfolio Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the ~~Trust, on behalf of the Funds~~Portfolio. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Portfolio the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable Trust~~ Portfolio or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Portfolio include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianPortfolio. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each Trust~~ The Portfolio agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each Trust~~ The Portfolio agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Portfolio. ~~Each Trust~~ The Portfolio agrees that the Custodian shall incur no liability to the ~~Funds~~ Portfolio in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Portfolio under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Portfolio. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts, for the account of the Funds,~~ Portfolio any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Portfolio may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Portfolio. The Custodian is not a selling agent for shares of the ~~Funds~~ Portfolio and performance of its duties as a custodial agent shall not be e deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Portfolio as an investment.

Appears in 2 contracts

Samples: Custody Agreement (Morgan Keegan Select Fund Inc), Custody Agreement (Morgan Keegan Select Fund Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall ~~defend~~be paid as compensation for its services pursuant to this Agreement such compensation as may from time to time be agreed upon in writing between the two parties. Until modified in writing, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to such compensation shall be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3Exhibit A attached hereto. The Custodian shall not be liable for any ~~money~~ action taken in good faith upon any certificate herein described or ~~collected funds~~ certified copy of any resolution of the Fund's Board of Directors, and may rely on the genuineness of any such document which it may in ~~U. S. dollars deposited in a Federal Reserve Bank other than~~ good faith believe to have been validly executed. The Fund agrees to indemnify and hold harmless the Custodian ~~in accordance with a Certificate described in clause~~ and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (iiincluding reasonable counsel fees) ~~of paragraph 2 (e) of Article IV hereof, nor be liable for~~ incurred or ~~considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by~~ assessed against it ~~on behalf of the Funds until the Custodian actually receives and collects such money directly~~ or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement nominee in connection with the ~~appointment~~ performance of this Agreement, except such as may arise from its or ~~activities of such Depositories~~ its nominee's own negligent action, negligent failure to act, bad faith or ~~Sub-Custodians. 8~~willful misconduct. The Custodian is authorized to charge any account of the Fund for such items. In the event of any advance of cash for any purpose made by the Custodian resulting from orders or instructions of the Fund, or in the event that the Custodian or its nominee shall ~~not~~ incur or be ~~under~~ assessed any ~~duty~~ taxes, charges, expenses, assessments, claims or ~~obligation~~ liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to ~~ascertain whether~~ act or willful misconduct, any ~~Securities~~ property at any time ~~delivered to or~~ held ~~by it~~ for the account of the ~~Funds are such as properly may~~ Fund shall be ~~held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9~~security therefore. The Custodian ~~shall treat~~ agrees to indemnify and hold harmless the Fund from all ~~records~~ charges, expenses, assessments, and ~~other information relating~~ claims/liabilities (including reasonable counsel fees) incurred or assessed against it in connection with the performance of this Agreement, except such as may arise from the Fund's own negligent action, negligent failure to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached heretoact, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianwillful misconduct. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 2 contracts

Samples: Custodian Agreement (Security Capital Employee Reit Fund Inc), Custodian Agreement (Security Capital U S Real Estate Shares Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any ~~loss or~~ loss, damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own ~~negligence or~~ negligence, willful misconduct, or breach of this agreement. ~~Each Trust~~The Fund, ~~on behalf of its Funds and~~ only from ~~applicable~~ Fund Assets (or insurance purchased by ~~a Trust~~ the Fund with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each Trust~~the Fund's duties ~~with respect to its Funds~~ hereunder or any other action or inaction of the ~~respective Trust~~ Fund or its ~~Trustees~~Directors, ~~Officers~~officers, employees or ~~agents as to the Funds~~agents, except such as may arise from the negligent action, ~~omission or~~ omission, willful misconduct or breach of this agreement by the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each Trust~~ the Fund and its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the ~~Trust~~Fund, its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Fund, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Fund for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust~~the Fund, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Fund, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph~~, except the~~ . The expenses of any additional counsel retained by the Indemnified Party shall be borne by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust~~ Fund in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the ~~Trust,~~ Fund on behalf of the ~~Funds~~Fund, using Securities as collateral; ~~(g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof.~~ 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 54. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 65. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 76. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. Any such Sub-Custodian shall be qualified to serve as such for assets of investment companies registered under the Investment Company Act of 1940, as amended ("1940 Act"). The Custodian shall promptly forward to the Fund all documents it receives from any Sub-Custodian appointed hereunder which are provided to assist directors of registered investment companies fulfill their responsibilities under Rule 17f-5 under the 1940 Act. Further, the Custodian shall promptly inform the Fund in writing if it receives any written statement of the Fund's account maintained by any Sub-Custodian which contains an error. 87. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Fund's By-Laws. 98. The Custodian shall treat all records and other information relating to the ~~Trusts, the Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective Trust~~ Fund shall have consented thereto in writing or (b) such disclosure is compelled by law. 109. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the ~~Trust~~Fund, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable Trust~~ Fund or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 1110. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each Trust~~ The Fund agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 1211. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 ~~thereunder~~thereunder and those records are the property of the Fund, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Fund. 1312. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Fund, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 1413. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment. 14. Anything to the contrary in their Contract notwithstanding, the Custodian shall be liable to the Fund for any loss or damage to the Fund resulting from use of a Sub-Custodian, Depository or Book-Entry System by reason of any negligence, misfeasance or misconduct of the Custodian or any of its agents, Sub-Custodians or of any of its or their employees or from failure of the Custodian or any such agent or Sub-Custodians to enforce effectively such rights as it may have against a Sub-Custodian, the Depository or Book-Entry 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 such Sub-Custodian, the Depository or Book-Entry 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 made whole for any such loss or damage.

Appears in 2 contracts

Samples: Custody Agreement (Philadelphia Fund Inc), Custody Agreement (Eagle Growth Shares Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own ~~negligence~~ negligence, bad faith or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ a Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ a Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ a Fund hereunder or any other action or inaction of the ~~respective~~ Trust or its ~~Trustees~~Directors, ~~Officers~~officers, employees or ~~agents as to the Funds~~agents, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to ~~the Funds~~ a Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-~~Custodians as to the Funds~~Custodians, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of ~~the Funds~~a Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Trust shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust, on behalf of its Funds,~~ the Trust of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in~~ a Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts, in connection with the Funds, therefrom or~~ Trust for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of ~~the Funds~~a Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of ~~the Funds~~a Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of ~~the Funds~~a Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of ~~the Funds~~a Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of ~~the Funds~~a Fund; (f) The legality of any borrowing by the Trust, on behalf of ~~the Funds~~a Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of ~~the Funds~~ a Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing ~~the Funds'~~ a Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to ~~the Funds~~ a Fund from the Dividend and Transfer Agent ~~of the Funds~~ nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of ~~the Funds of~~ any amount paid by the Custodian to the Dividend and Transfer Agent ~~of the Funds~~ in accordance with this Agreement. 5. Income due or payable to ~~the Funds~~ a Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action on behalf of any Fund of the Trust to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it the Fund, as a prerequisite to requiring the Custodian to take such action, shall ~~be assured~~ provide indemnity to ~~its satisfaction or reimbursement~~ the Custodian in an amount and form satisfactory to it. The Custodian will, however, promptly notify the Trust in writing of ~~its costs~~ such default and ~~expenses in connection with any such action or, at the Custodian's option, prepayment~~refusal to pay. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, provided, however, that any such Depository or Sub-Custodian be eligible to act as such under the Investment Company Act of 1940, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by ~~the Funds~~a Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. C. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of ~~the Funds~~ a Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Declaration of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the Funds and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for a Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C D attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust~~, on behalf of the Funds~~. The Custodian shall be entitled to charge against any money held by it for the account of ~~the Funds~~ a Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of ~~the Funds~~ a Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Trust in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Trust under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. ~~The~~ All books and records shall be the property of the ~~custodian~~ Trust and shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of ~~the Funds~~ a Fund as an investment.

Appears in 2 contracts

Samples: Custody Agreement (Bb&t Mutual Funds Group), Custody Agreement (Bb&t Mutual Funds Group)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the ~~Indemnifying~~ indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or ~~Sub-~~Sub- Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 2 contracts

Samples: Custody Agreement (Mosaic Focus Fund Trust), Custody Agreement (Mosaic Income Trust)

Concerning the Custodian. ~~1. Except as otherwise provided herein, the~~ 11.1 The Custodian shall not be ~~liable for~~ required to take any ~~loss~~ legal action upon the Company’s behalf or ~~damage, including counsel fees, resulting from its action~~ otherwise to protect or ~~omission to act~~ otherwise in respect of Investments or ~~otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds~~ Cash unless the Custodian so agrees and ~~only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless~~ unless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified first fully indemnified in a ~~Certificate the specified collateral and the executed promissory note, if any, against delivery~~ form satisfactory to it by the ~~lending bank~~ Company. 11.2 Where the Custodian is required to consider or ~~broker of the total amount payable as set forth~~ engage in ~~the Certificate. The Custodian may~~further activities, ~~at the option of the lending bank~~ litigation or ~~broker~~other exceptional matters, ~~keep such collateral in its possession, but such collateral~~ additional fees shall be subject to ~~all rights therein given~~ further negotiation at the ~~lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver~~ relevant time and in the ~~manner directed~~ absence of contrary agreement additional fees shall be charged by the ~~Trust~~ Custodian at its hourly rate from time to time ~~such Securities as additional collateral as may be specified~~ in ~~a Certificate~~ effect. 11.3 If the Custodian (in any capacity) is requested to ~~collateralize further~~ take any ~~transaction described~~ action in the ~~paragraph~~course of providing any services pursuant to this Agreement which, in the opinion of the Custodian may make it or any agent, delegate or sub-custodian liable for the payment of money or in any other way, and if the Custodian agrees to take any such action, then the Company expressly acknowledges that any liability in connection with such action taken by the Custodian will be covered by the indemnity provided pursuant to Clause 17.1. ~~Such Trust~~ In addition, the Custodian may, in its sole discretion, require further indemnification or other assurance as a prerequisite to taking such action. 11.4 In the performance of any services hereunder the Custodian may appoint such agents as it thinks fit, including sub-custodians, and agrees that it shall ~~cause all Securities released from collateral status~~ exercise reasonable care in selecting any such agent. The Custodian will not be liable for the acts or omissions of any such agent selected by it with reasonable care or for the solvency of any such agent. 11.5 The Company is hereby notified that the Custodian has delegated certain of the services to be ~~returned directly~~ provided by it hereunder relating to the processing of subscriptions, redemptions, sales, purchases and transfers of Investments, transfers of Cash and record keeping responsibilities (but for the avoidance of doubt excluding responsibilities relating to maintaining custody of the Company’s Cash and Investments under this Agreement) to one of its Affiliates. The Company and the Manager hereby consent to such delegation. 11.6 In order to secure all and any obligations of the Company to the Custodian, the Company hereby grants to the Custodian a continuing lien and ~~the Custodian shall receive~~ security interest over all Cash and Investments from time to time ~~such return~~ held in the Deposit Account and the Securities Account. 11.7 Notwithstanding that the Custodian holds the Cash and Investments in trust for the Company in accordance with the terms of ~~collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer~~this Agreement, the ~~title and number of shares~~ Custodian may without notice set-off any sum due to it from the Company against any Cash or ~~the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of~~ Investments held by the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the ~~option~~ power to ~~defend the Indemnified Party against any claim which may be the subject~~ pay out of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense assets of the ~~claim and the Indemnifying Party shall sustain no further legal or other expenses in~~ Company such ~~situation for which indemnification has been sought~~ amounts due to it under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent)Agreement. The ~~Custodian~~ Company expressly acknowledges ~~the limitation~~ such right of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets set-off and that the Custodian shall ~~not be entitled~~ have the right to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or retain all Investments held by it ~~for the account of the Funds are such as properly may be held~~ or by any agent, delegate or sub-custodian until payment in full by the ~~Funds under the provisions~~ Company of ~~the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat~~ all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved sums owing by the ~~Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled~~ Company to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. ~~11.~~ 11.8 The Custodian shall ~~be entitled~~ deliver to ~~rely upon any Certificate. The Custodian shall be entitled~~ the Company from time to ~~rely upon any Oral Instructions~~ time at such reasonable intervals as the Company may require a full and ~~any Written Instructions actually received~~ true account of all receipts and payments made and other action taken by the Custodian pursuant to ~~Article IV~~ this Agreement since the last date such an account was provided together with a list as at the date of such account of all Investments and Cash or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex other indebtedness or ~~otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received~~ obligations held by the Custodian ~~shall in no way affect the validity~~ or its agents for or on behalf of the ~~transactions~~ Company or ~~enforceability~~ otherwise pursuant to the terms hereof. If Investments are held by an agent of the ~~transactions hereby authorized by the Trust. Each Trust agrees that the~~ Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account shall state the name and address of and indicate the ~~Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with~~ Investments held by such ~~reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time~~agent. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 2 contracts

Samples: Custodian Agreement (Pine Grove Alternative Institutional Fund), Custodian Agreement (Pine Grove Alternative Fund)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage,~~ damage including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or ~~willful~~ misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts at the expense of the Funds,~~ Fund or of its own ~~counsel at its own expense~~counsel, the expenses for which may be charged to the Fund upon the mutual agreement of the Fund and the Custodian, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or ~~any Depository~~ the depositories arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The~~ If the Fund incurs any loss or damages resulting from the use of the Book-Entry System arising by reason of the negligence, misfeasance or misconduct on the part of a depository, the Custodian ~~acknowledges~~ agrees to initiate a claim through normal banking channels with the ~~limitation~~ depository for the amount of ~~liability~~ such loss or damage, subject to the provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph ~~shall survive the termination~~ 5 of this ~~Agreement~~Article VII. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any ~~Securities~~ securities, including covered calls, purchased by or for the ~~account of the Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid ~~therefor~~therefore; (b) The legality of the sale of any ~~Securities~~ securities, including covered calls, by or for the ~~account of the Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~capital stock of the Fund, or the sufficiency of the amount to be received ~~therefor~~therefore; (d) The legality of the ~~redemption~~ declaration of any dividend by the Fund, or the legality of the issue of any shares of the ~~Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or~~ Fund's capital stock in payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofstock dividend. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the ~~Custodian of~~ custodian of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or ~~Depository~~the depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the ~~Securities~~ securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a ~~Certificate~~ certificate signed in the name of the Fund by any two officers, and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian ~~may~~ may, with the prior approval of the Fund, appoint one or more ~~financial~~ banking institutions as depository or ~~banking institutions, as Depository or Depositories~~ depositories or as ~~Sub~~sub-~~Custodian~~ custodian or ~~Sub~~sub-~~Custodians~~custodians, including, but not limited ~~to,~~ to banking institutions located in foreign countries, ~~or Securities~~ of securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in ~~a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved~~ written instructions from two officers of ~~any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~Fund. 87. The Custodian shall not be under any duty or obligation to ascertain whether any ~~Securities~~ securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as may properly ~~may~~ be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations~~ its Articles of ~~Trust and the Trusts' By-Laws~~Incorporation. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the ~~Custodian~~ Custodian, such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian ~~shall be entitled~~ may charge such compensation and any costs or expenses incurred by the Custodian in the performance of its duties pursuant to ~~charge~~ such agreement against any money held by it for the account of the ~~Funds~~ Fund, provided, however, that the ~~amount~~ Custodian shall provide the Fund with 48 hours' prior written notice that such charge will be made. If the Custodian receives a written notice from the Fund that it disputes the costs or expenses proposed to be charged or the mathematical calculation of ~~any loss~~the Custodian's compensation within the 48-hour notice period, ~~damage~~Custodian shall not charge the Fund's account until the parties agree as to the correct calculation of the compensation or the correct charge for costs and/or expenses, ~~liability or expense~~as the case may be. Furthermore, ~~including counsel fees~~if the parties are unable to reach such an agreement within five business days from the time Custodian first receives the Fund's notice of dispute as herein provided, ~~for which it shall be entitled to reimbursement under the provisions of~~ either party may terminate this Agreement ~~as determined by agreement of~~ upon 30 days' prior written notice to the ~~Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired~~other party. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of ~~Sub~~sub-~~Custodians~~ custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of ~~Securities~~ securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any ~~Certificate~~certificate, notice or other instrument in writing received by the Custodian and believed by the Custodian to be genuine and to be sent by two officers of the Fund (as defined in Article IX). The Custodian shall be entitled to rely upon any ~~Oral Instructions and any Written Instructions actually~~ instructions received by the Custodian pursuant to Article ~~IV or V hereof~~III hereof with regard to the purchase and sale of money market securities and believed by the Custodian to be genuine and to be given by an authorized person. ~~Each Trust~~ The Fund agrees to forward to the Custodian ~~Written Instructions~~ written instructions from ~~Authorized Persons~~ an authorized person confirming ~~Oral Instructions~~ such oral instructions in such manner so that such ~~Written Instructions~~ written instructions are received by the Custodian, whether by hand delivery, facsimile, telex or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such ~~Oral Instructions~~ oral instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon ~~Oral Instructions~~ oral instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions appear to have been received from a duly authorized person. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 2 contracts

Samples: Custodian Agreement (Iaa Trust Money Market Fund Inc), Custodian Agreement (Iaa Trust Money Market Fund Inc)

Concerning the Custodian. 1(a) Custodian shall exercise such reasonable care, diligence, and prudence as a professional custodian for securities would exercise in carrying out its duties and responsibilities under this Agreement. ~~Except as otherwise provided herein, the~~ The Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any ~~such loss~~ loss, damage, claim or ~~damage~~ expense arising out of its own ~~negligence~~ negligence, bad faith or willful misconduct~~. Each Trust~~, ~~on behalf~~ and shall have no obligation hereunder for any loss or damage, including counsel fees, which are sustained or incurred by reason of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any ~~loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other~~ action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder Book Entry System or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agentsDepository. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of competent counsel ~~to the Trusts at the expense of the Funds, or of its own counsel at its own expense,~~ and shall be fully protected with respect to anything done or omitted by it in good faith in and conformity with ~~the~~ such advice or ~~opinion~~ opinion. The Local Government and Bank agree, jointly and severally, to indemnify the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of ~~counsel to~~ counsel, which the ~~Trusts, and shall~~ Custodian may sustain or incur or which may be ~~similarly protected with respect to anything done~~ asserted against the Custodian by reason of or as a result of any action taken or omitted by it the Custodian in ~~good faith in conformity~~ connection with ~~the advice~~ operating under this Agreement except those costs, expenses, damages, liabilities or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use claims arising out of the ~~Book-Entry System~~ negligence or ~~any Depository arising by reason of any negligence, misfeasance or~~ willful misconduct ~~on the part~~ of the Custodian or any of its ~~employees,~~ employees or duly appointed agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. ~~In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party")~~ This indemnity shall be ~~advised of all pertinent facts concerning the situation in question, and the party claiming~~ a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject continuing obligation of the ~~indemnification,~~ Local Government and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive Bank notwithstanding the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofresponsible for, ~~nor be liable for~~ or considered to be the Custodian of of, any ~~money, whether or not represented by any check, draft, or other instrument for the payment of money,~~ Eligible Collateral received by it ~~on behalf of~~ for deposit in the ~~Funds~~ Account until the Custodian actually receives and collects such ~~money~~ Eligible Collateral directly or by the final crediting of the Custodian’s account ~~representing~~ on the ~~Funds' interest at~~ books of the ~~Book-~~Book Entry System or the appropriate Depository~~. 4~~. The Custodian will be entitled to reverse any credits made on the Local Government’s behalf where such credits have been previously made and the Eligible Collateral is not finally collected. (c) The Custodian shall ~~not be under any duty~~ have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against the Custodian in connection with this Agreement. In no event shall Custodian be liable to ~~take action~~ Local Government, Bank or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement. (d) The Local Government’s authorized officer, upon reasonable notice, shall have access to ~~effect collection~~ the Custodian’s books and records maintained with respect to the Local Government’s interest in the Account during the Custodian’s normal business hours, Upon the reasonable request of the Local Government, copies of any ~~amount due to the Funds from the Dividend~~ such books and ~~Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid~~ records shall be provided by the Custodian to the ~~Dividend and Transfer Agent of~~ Local Government or the ~~Funds in accordance with this Agreement~~Local Government’s authorized officer at the Local Government’s expense. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) ~~Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX~~In performing hereunder, the Custodian ~~shall not be under any duty or obligation to take action to effect collection~~ may enter into subcontracts, agreements and understandings with third parties (including subsidiaries of ~~any amount~~The Bank of New York Company, ~~if the Securities upon which~~ Inc.), whenever and on such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions ~~approved in a Certificate~~as it deems necessary or appropriate. ~~Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian~~ No such subcontract, agreement or understanding shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to discharge the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianfrom its obligations hereunder. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Tri Party Collateral Agreement

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own ~~negligence~~ negligence, bad faith or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ a Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ a Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ a Fund hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, ~~Officers~~officers, employees or ~~agents as to the Funds~~agents, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to ~~the Funds~~ a Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-~~Custodians as to the Funds~~Custodians, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of ~~the Funds~~a Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Trust shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust, on behalf of its Funds,~~ the Trust of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in~~ a Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts, in connection with the Funds, therefrom or~~ Trust for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of ~~the Funds~~a Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of ~~the Funds~~a Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of ~~the Funds~~a Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of ~~the Funds~~a Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of ~~the Funds~~a Fund; (f) The legality of any borrowing by the Trust, on behalf of ~~the Funds~~a Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of ~~the Funds~~ a Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing ~~the Funds'~~ a Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to ~~the Funds~~ a Fund from the Dividend and Transfer Agent ~~of the Funds~~ nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of ~~the Funds of~~ any amount paid by the Custodian to the Dividend and Transfer Agent ~~of the Funds~~ in accordance with this Agreement. 5. Income due or payable to ~~the Funds~~ a Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action on behalf of any Fund of the Trust to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it the Fund, as a prerequisite to requiring the Custodian to take such action, shall ~~be assured~~ provide indemnity to ~~its satisfaction or reimbursement~~ the Custodian in an amount and form satisfactory to it. The Custodian will, however, promptly notify the Trust in writing of ~~its costs~~ such default and ~~expenses in connection with any such action or, at the Custodian's option, prepayment~~refusal to pay. 7. ~~The~~ Subject to applicable laws and regulations, Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, provided, however, that any such Depository or Sub-Custodian be eligible to act as such under the Investment Company Act of 1940 and the regulations thereunder, including, but not limited to, ~~banking institutions located in foreign countries, or~~ of Securities and monies at any time owned by ~~the Funds~~a Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. C. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of ~~the Funds~~ a Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Declaration of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the Funds and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for a Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C D attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust~~, on behalf of the Funds~~. The Custodian shall be entitled to charge against any money held by it for the account of ~~the Funds~~ a Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of ~~the Funds~~ a Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Trust in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Trust under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules ~~31 a-1~~ 31a-1 and ~~31 a-2~~ 31a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. ~~The~~ All books and records shall be the property of the ~~custodian~~ Trust and shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of ~~the Funds~~ a Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Variable Insurance Funds)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its ~~own~~ negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its~~ the Funds and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its~~ the Funds hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or of inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its~~ the Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the Funds, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "~~Indemnifying~~ Indemnification Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable ~~for~~for : (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be ~~paid~~ paid, therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, ~~banking institutions located in foreign countries, or Securities and monies at any time owned by~~ the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. B The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the ~~account~~ accounts of the Funds the amount of any loss, damage, liability or expense, including counsel ~~fees,~~ fees for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the ~~Custodian~~ custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any ~~Certificate~~Certificate if such reliance is made in good faith. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or and V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the ~~accounts~~ amounts maintained by the Custodian hereunder in such a manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) ~~preserve~~ preserver for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Rydex Dynamic Funds)

Concerning the Custodian. 1(a) The acceptance by the Custodian of its appointment hereunder is expressly subject to the following terms, which shall govern and apply to each of the terms and provisions of this Section 13 (whether or not so stated therein or herein): (i) The Custodian shall have no duties, obligations or responsibilities under this Section 13 or with respect to the Required Loan Documents except for such duties, obligations or responsibilities as are expressly and specifically set forth in this Section 13 as duties obligations or responsibilities on its part to be performed, and the duties obligations and responsibilities of the Custodian shall be determined solely by the express provisions of this Section 13. ~~Except~~ No implied duties, obligations or responsibilities shall be read into this Agreement against, or on the part of, the Custodian. Any permissive right of the Custodian to take any action hereunder shall not be construed as ~~otherwise provided herein~~a duty. (ii) The Custodian makes no representations as to and shall not be responsible for or required to verify (x) the validity, legality, enforceability, due authorization, effectiveness, recordability, insurability, sufficiency, value, form, substance, or genuineness of any of the documents contained in any Required Loan Document or (y) the collectability, validity, transferability, insurability, value, effectiveness, perfection, priority or suitability of any Required Loan Document or any document contained therein. (iii) The Custodian shall have no responsibilities or duties with respect to any Required Loan Document while such Required Loan Document is not in its possession. (iv) The Custodian may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, statement, certificate, request, waiver, consent, opinion, report, receipt or other paper, electronic communication or document furnished to it in accordance with this Section 13, not only as to its due execution and validity, but also as to the truth and accuracy of any information therein contained, which it in good faith believes to be genuine and signed or presented by the proper person (which in the case of any instruction from or on behalf of the Borrower shall be an Authorized Person). The Custodian shall be entitled to reasonably presume the genuineness and due authority of any signature appearing thereon. The Custodian shall not be bound to make any independent investigation into the facts or matters stated in any such notice, instruction, statement, certificate, request, waiver, consent, opinion, report, electronic communication, receipt or other paper or document, provided, however, that if the form thereof is specifically prescribed by the terms of this Section 13, the Custodian shall ~~not~~ examine the same to determine whether it substantially conforms on its face to the requirements set forth herein. (v) Neither the Custodian nor any of its directors, officers or employees shall be liable to anyone for any ~~loss~~ error of judgment, or ~~damage, including counsel fees, resulting from its action or omission to act or otherwise, except~~ for any ~~such loss~~ act done or ~~damage arising out~~ step taken or omitted to be taken by it (or any of its ~~own negligence or willful misconduct. Each Trust~~directors, ~~on behalf~~ officers of ~~its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder~~employees), ~~shall defend~~or for any mistake of fact or law, ~~indemnify and hold harmless the Custodian~~or for anything which it may do or refrain from doing in connection herewith, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other unless such action ~~or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission~~ constitutes gross negligence or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. ~~2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for:~~ (avi) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any ~~money~~ action taken by it in good faith and reasonably believed by it to be within powers conferred upon it, or ~~collected funds~~ taken by it pursuant to any direction or instruction received by it in ~~U. S. dollars deposited~~ accordance with this Section 13, or omitted to be taken by it by reason of the lack of direction or instruction required hereby for such action. (vii) The Custodian may consult with, and obtain advice from, legal counsel selected in ~~a Federal Reserve Bank other than~~ good faith, with respect to any question as to any of the provisions hereof or its duties hereunder, or any matter relating hereto, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by the Custodian in good faith in accordance with ~~a Certificate described~~ the advice or opinion of such counsel. The reasonable costs and expenses of such advice or opinion shall be reimbursed by the Borrower pursuant to Section 12 hereof. (viii) No provision of this Agreement shall require the Custodian to expend or risk its own funds, take any action hereunder (or omit to take any action) or otherwise incur any financial liability in ~~clause~~ the performance of its duties under this Section 13 if it shall have grounds for believing that repayment of such funds or indemnity satisfactory is not assured to it. (iiix) ~~of paragraph 2 (e) of Article IV hereof~~The Custodian may act or exercise its duties or powers hereunder through agents or attorneys, ~~nor~~ and the Custodian shall not be liable or responsible for the actions or ~~considered to be~~ omissions of any such agent or attorney appointed and maintained with due care. (x) If the Custodian of shall request instructions from the Borrower with respect to any ~~money~~act, ~~whether~~ action or ~~not represented by any check~~failure to act in connection with this Agreement, ~~draft, or other instrument for~~ the ~~payment of money, received by it on behalf of the Funds~~ Custodian shall be entitled to refrain from taking such action and continue to refrain from acting unless and until the Custodian ~~actually receives~~ shall have received written instructions from the Borrower without incurring any liability therefor to the Borrower, or any other Person. (xi) In no event shall the Custodian or its directors, affiliates, officers, agents and ~~collects such money directly~~ employees be held liable for any lost profits or exemplary, punitive, special, indirect or consequential damages of any kind resulting from any action taken or omitted to be taken by ~~the final crediting~~ it or them hereunder or in connection herewith even if advised of the ~~account representing the Funds' interest at the Book-Entry System or Depository~~possibility of such damages. 4. (xii) The Custodian shall not be ~~under any duty or obligation~~ deemed to ~~take action to effect collection~~ have notice of any ~~amount due~~ fact, claim or demand with respect hereto unless a Responsible Officer of the Custodian has actual knowledge thereof or written notice thereof. Any other provision of this Agreement to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IXcontrary notwithstanding, the Custodian shall have no notice of and shall not be ~~under~~ bound by any ~~duty or obligation to take action to effect collection~~ of ~~any amount, if~~ the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions ~~approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved~~ of any ~~obligation~~ other document or ~~liability under this Agreement in connection with~~ agreement unless the ~~appointment~~ Custodian is a signatory party to that document or ~~activities of such Depositories or Sub-Custodians~~agreement. ~~8. The~~ (xiii) Nothing in this Section 13 shall be deemed to impose on the Custodian ~~shall not be under~~ any duty to qualify to do business in any jurisdiction, other than (x) any jurisdiction where any Required Loan Document is or ~~obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly~~ may be held by the ~~Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The~~ Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time ~~owned by~~ hereunder, and (y) any jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to qualify could have a material adverse effect on the ~~Funds.~~ Custodian or its property or business or on the ability of the Custodian to perform its duties hereunder. (xiv) The Custodian shall have only the duties and responsibilities with respect to the matters set forth herein as is ~~not a selling agent for shares of the Funds~~ expressly set forth in writing herein and ~~performance of its duties as a custodial agent~~ shall not be deemed to be an agent, bailee or fiduciary for any party hereto. The Custodian shall be fully protected in acting or refraining from acting in good faith without investigation on any notice, instruction or request purportedly furnished to it by the Borrower in accordance with the terms hereof, in which case the parties hereto agree that the Custodian has no duty to make any further inquiry whatsoever. It is hereby acknowledged and agreed that the Custodian has no knowledge of (and is not required to know) the terms and provisions of any loan agreements or any other related documentation to which the Lender may be a ~~recommendation to~~ party or whether any actions by the, the Borrower or any other person or entity are permitted or a breach thereunder or consistent or inconsistent therewith. (xv) The provisions of this Section 13.3 shall survive the termination of this Agreement and the resignation or removal of the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 1 contract

Samples: Loan and Security Agreement (Kayne Anderson BDC, Inc.)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its ~~own~~ negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its~~ the Funds and only from ~~applicable~~ Fund Assets (or insurance ~~purchased~~ purchase by a the Trust with respect to its liabilities on behalf of ~~its~~ the Funds hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its~~ the Funds hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable ~~attorneys'~~ attorneys fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ trust at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, ~~have a~~ having differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the ~~use~~ xxx of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its~~ the Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the Funds, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the ~~sufficiency~~ propriety of the amount to be ~~received~~ paid therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by my the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be e entitled to charge against any money held by it for the ~~account~~ accounts of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any ~~Certificate~~Certificate if such reliance is made in good faith. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on or the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such a manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules ~~31 a-1~~ 31a-1 and ~~31 a-2~~ 31a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Rydex Variable Trust)

Concerning the Custodian. ~~1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission~~ b. Buyer hereby agrees to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold the Custodian harmless ~~the Custodian~~in respect of any and all losses, ~~its officers~~costs, ~~employees~~ expenses, liabilities, judgments, assessments, penalties, damages, deficiencies, suits, actions, proceedings, or demands, and ~~agents, with respect to any loss, claim, liability or cost (including~~ reasonable attorneys' ~~fees) arising or alleged to arise~~ fees and expenses incident thereto resulting from ~~or relating to each Trust's duties with respect to its Funds hereunder or~~ any ~~other~~ action or ~~inaction~~ refusal to act by the Custodian taken in accordance with the instructions of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agentsBuyer. The Custodian shall ~~defend~~promptly notify Buyer of any asserted liability for which the Custodian would be entitled to indemnification by Buyer, ~~indemnify~~ and ~~hold harmless each Trust~~ Buyer and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian legal representatives shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian mayhave, at ~~the option of the lending bank~~ Buyer's election, a right to compromise or ~~broker~~defend any such matter involving asserted liability, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of through counsel ~~to the Trusts at the expense of the Funds, or~~ of its own ~~counsel~~ choosing, at its ~~own~~ expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that ~~nothing contained herein~~ Buyer shall ~~preclude recovery by a Trust~~indemnify the Custodian against any damage resulting from the failure to pay any claims on all such litigation pending. In the event Buyer undertakes to compromise and defend any such liability, ~~on behalf~~ Buyer shall notify the Custodian in writing promptly of its ~~Funds, of principal and of interest~~ intention to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in questiondo so, and the ~~party claiming a right to indemnification (~~Custodian shall cooperate with Buyer and its counsel in the ~~"Indemnified Party") will use a reasonable care to identify and notify~~ compromising of or the ~~Indemnifying Party promptly concerning~~ defending against any ~~situation which presents~~ such liabilities or ~~appears to present a claim for indemnification against~~ claims, at the ~~Indemnifying Party~~expense of Buyer. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the resignation or termination of ~~this Agreement~~the Custodian. ~~2. Without limiting~~ c. The Sellers, jointly and severally, hereby agree to indemnify and hold the ~~generality of the foregoing, the Custodian, acting in the capacity of~~ Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust harmless in respect of ~~shares of the Funds; (f) The legality of~~ any ~~borrowing~~ and all losses, costs, expenses, liabilities, judgments, assessments, penalties, damages, deficiencies, suits, actions, proceedings or demands, and reasonable attorneys' fees and expenses incident thereto resulting from any action or refusal to act by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with ~~a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be~~ the ~~Custodian~~ instructions of any ~~money, whether~~ Seller or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4Representative. The Custodian shall ~~not be under any duty or obligation to take action to effect collection~~ promptly notify the Representative of any ~~amount due~~ asserted liability for which the Custodian would be entitled to indemnification by the ~~Funds~~ Sellers, and the Sellers and their legal representatives shall have, at the election of the Representative, a right to compromise or defend any such matter involving asserted liability, through counsel of their own choosing, at their expense; provided, however, that the Sellers shall indemnify the Custodian against any damage resulting from the ~~Dividend and Transfer Agent of~~ failure to pay any claims on all such litigation pending. In the ~~Funds nor~~ event the Sellers undertake to ~~take~~ compromise or defend any ~~action to effect payment or distribution by~~ such liability, the ~~Dividend and Transfer Agent of the Funds of any amount paid by~~ Representative shall notify the Custodian in writing promptly of their intention to ~~the Dividend~~ do so, and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall ~~not be under any duty~~ cooperate with the Sellers and their counsel in the compromising of or ~~obligation to take action to effect collection of any amount, if~~ the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with defending against any such ~~action or~~liabilities or claims, at the ~~Custodian's option, prepayment. 7~~expense of the Sellers. The ~~Custodian may appoint one~~ indemnification shall survive the resignation or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved termination of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11d. The Escrow Agent may resign at any time by giving thirty (30) days written notice of such resignation to Buyer and Representative. ~~The Custodian~~ If no successor Escrow Agent has been named at the expiration of the thirty (30) day period, the Escrow Agent shall have no further obligation hereunder except to hold the Escrow Fund as a depository. Upon notification by Buyer of the appointment of the successor, the Escrow Agent shall promptly deliver the Escrow Fund and all materials in its possession relating to the Escrow Fund to such successor, and the duties of the resigning Escrow Agent shall thereupon in all respects terminate, and it shall be released and discharged from all further obligations hereunder. Similarly, the Escrow Agent may be discharged from its duties as Escrow Agent under this Agreement upon thirty (30) days written notice from Buyer and Representative and upon payment of any and all fees due to Escrow Agent. In such event, the Escrow Agent shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward on instructions from Buyer as to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity disposition and delivery of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactionsEscrow Fund. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custodial Agreement (Kimberton Enterprises Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including reasonable counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust~~The Corporation, on behalf of ~~its Funds~~ each Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by ~~a Trust~~ the Corporation with respect to its liabilities on behalf of ~~its Funds~~ a Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising ~~or alleged to arise~~ from or relating to ~~each Trust~~the Corporation's duties with respect to ~~its Funds~~ a Fund hereunder or any other action or inaction of the ~~respective Trust~~ Corporation or its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each Trust~~ the Corporation and its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to ~~the Funds~~a Fund, except such as may arise from the negligent action, omission or willful misconduct of the ~~Trust~~Corporation, its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law that arise under or relate to this agreement apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Corporation at the expense of the ~~Funds~~Corporation, or of its own counsel at its own expense, . and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Corporation, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of the substance of the legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Corporation for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-~~Custodians~~ Custodians, but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust~~the Corporation, on behalf of ~~its Funds~~a Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Corporation, in connection with ~~the Funds~~a Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto ~~may be~~ is asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying ~~Party~~ Parry promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the ~~Indemnifying~~ Indemnified Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of ~~the Funds~~a Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of ~~the Funds~~a Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of ~~the Funds~~a Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of ~~the Funds~~a Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust~~ Corporation in respect of shares of ~~the Funds~~a Fund; (f) The legality of any borrowing by the ~~Trust~~Corporation, on behalf of ~~the Funds~~a Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of ~~the Funds~~ a Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent ~~of the Funds~~ nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of ~~the Funds of~~ any amount paid by the Custodian to the Dividend and Transfer Agent ~~of the Funds~~ in accordance with this Agreement. 5. Income due or payable to ~~the Funds~~ a Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the ~~Government~~ Govemment National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. ~~The~~ Provided that the provisions of Section 17(f) of the Investment Company Act of 1940 and the rules adopted thereafter are fully complied with, the Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by ~~the Funds~~a Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of ~~the Funds~~ a Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Corporation's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Corporation, the Funds and ~~the Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person ~~unless~~ unless: (a) the ~~respective Trust~~ Corporation shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Corporation agrees to pay to the ~~Custodian~~ Custodian, for each Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the ~~Trust~~Corporation, on behalf of ~~the Funds~~each Fund. The Custodian shall be entitled to charge against any money held by it for the account of ~~the Funds~~ a Fund the amount of any loss, damage, liability or expense, including reasonable counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable Trust~~ Corporation or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of ~~the Funds~~ a Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any ~~Certificate~~Certificate reasonably believed by it to be genuine. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each Trust~~ The Corporation agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each Trust~~ The Corporation agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Corporation. ~~Each Trust~~ The Corporation agrees that the Custodian shall incur no liability to ~~the Funds~~ a Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of ~~the Funds~~ each Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules ~~31 a-1~~ 31a-1 and ~~31 a-2~~ 31a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Corporation. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Corporation, for the account of ~~the Funds~~a Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Corporation may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of ~~the Funds~~ any Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of ~~the Funds~~ a Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Croft Funds Corp)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the ~~Custodian~~ custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage~~dam- age, including counsel fees, resulting from its action or ~~omission~~ omis- sion to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own ~~negligence~~ negligence, misfeasance or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the sale or redemption 'of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the FundsShares, or the propriety of the amount to be received or paid therefor; (ec) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral~~; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2~~ ; (e) The legality of ~~Article IV hereof. 3~~any loan of portfolio Securi- ties, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian ~~shall~~ specifically, but not ~~be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii)~~ by way of ~~paragraph 2 (e) of Article IV hereof~~limitation, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation periodically to ~~take action to effect collection of any~~ check or notify the Fund that the amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such ~~Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or~~ cash collateral held by it for the ~~account~~ Fund is suf- ficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the ~~Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9~~Fund. ~~The Custodian shall treat all records and other information relating to the Trusts~~In addition, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be ~~entitled~~ under no duty or obligation to ~~receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto~~see that any broker, dealer or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as financial institution to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of portfolio Securities of the ~~Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian~~ Fund are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian lent pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity XIV of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.this

Appears in 1 contract

Samples: Custody Agreement (Merrill Lynch High Income Municipal Bond Fund Inc)

Concerning the Custodian. 1. A. Except as otherwise provided herein, the Custodian shall not be liable for any loss or ~~damage, including counsel fees,~~ damage resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder),~~ The Corporation shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~agreement, (c)~~ the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the CustodianCorporation's duties ~~with respect to the Funds~~ hereunder or any other action or inaction of the ~~Custodian~~ Corporation or its ~~Trustees~~Directors, ~~Officers~~officers, ~~employees,~~ employees or agents~~, nominees or Sub-Custodians as to the Funds~~, except such as may arise from the negligent action, ~~omission or~~ omission, willful misconduct or breach of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received this Agreement by the Custodian~~, have a differing interpretation of such question of law~~. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. B. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a1.) The validity of the issue of any Securities purchased by or for the account of ~~the Funds~~a Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b2.) The legality of the sale of any Securities by or for the account of ~~the Funds~~a Fund, or the propriety of the amount for which the same are sold; (c3.) The legality of the issue or sale of any shares of ~~the Funds~~a Fund, or the sufficiency of the amount to be received therefor; (d4.) The legality of the redemption of any shares of ~~the Funds~~a Fund, or the propriety of the amount to be paid therefor; (e5.) The legality of the declaration or payment of any dividend by ~~the Trust~~ a Fund in respect of shares of the ~~Funds~~Fund; (f6.) The legality of any borrowing by ~~the Trust,~~ a Fund on behalf of ~~the Funds~~a Fund, using Securities as collateral~~; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof~~. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. C. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to ~~the Funds~~ a Fund from ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. ~~5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account~~ D. Notwithstanding Section D of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IXV, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or (including prepayment thereof) of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 7E. The Corporation acknowledges and hereby authorizes the Custodian to hold Securities through its various agents described in Appendix B annexed hereto. The Corporation hereby represents that such authorization has been duly approved by the Board Of Directors of the Corporation as required by the Act. The Custodian acknowledges that although certain Fund Assets are held by its agents, the Custodian remains primarily liable for the safekeeping of the Fund Assets. In addition, the Corporation acknowledges that the Custodian may appoint one or more financial ~~or banking~~ institutions, as ~~Depository~~ agent or ~~Depositories~~ agents or as ~~Sub~~sub-~~Custodian~~ custodian or ~~Sub~~sub-~~Custodians~~custodians, including, but not limited to, banking institutions located in foreign countries, or for the purpose of holding Securities and ~~monies~~ moneys at any time owned by the Funds~~, upon terms and conditions approved in a Certificate~~. ~~Current Depository(s) and Sub-Custodians(s) are noted in Appendix B.~~ The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such ~~Depositories~~ agents or ~~Sub~~sub-~~Custodians~~custodians. Any such agent or sub-custodian shall be qualified to serve as such for assets of investment companies registered under the Act. Upon request, the Custodian shall promptly forward to the Corporation any documents it receives from any agent or sub-custodian appointed hereunder which may assist trustees of registered investment companies fulfill their responsibilities under Rule 17f-5 of the Act. 8. F. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of ~~the Funds~~ a Fund are such as properly may be held by ~~the Funds~~ that Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Corporation's By-Laws. 9. G. The Custodian shall treat all records and other information relating to the ~~Trusts, the~~ Funds and ~~the Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (ai) the ~~respective Trust~~ Corporation shall have consented thereto in writing or (bii) such disclosure is ~~compelled~~ required by law. ~~10.~~ H. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Corporation agrees to pay to the Custodian such compensation as shall be determined pursuant to Appendix C D attached hereto, or as shall be determined pursuant to amendments to such Appendix ~~approved by the Custodian and the Trust, on behalf of the Funds.~~ D. The Custodian shall be entitled to charge against any money held by it for the account of ~~the Funds~~ each Fund, the amount of any of its fees, any loss, damage, liability or expense, including counsel ~~fees, for which it shall be entitled~~ fees related to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredthat Fund. The expenses which the Custodian may charge against the ~~accounts~~ account of ~~the Funds~~ a Fund include, but are not limited to, the expenses of ~~Sub~~agents or sub-~~Custodians~~ custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianthat Fund. ~~11. The Custodian shall be entitled to rely upon any Certificate.~~ I. The Custodian shall be entitled to rely upon any Oral Instructions and any Written ~~Instructions actually received by the Custodian pursuant to Article IV or V hereof~~Instructions. ~~Each Trust~~ The Corporation agrees to forward to the Custodian Written Instructions ~~from Authorized Persons~~ confirming Oral Instructions in such a manner so that such Written Instructions are received by the Custodian, whether by hand delivery, ~~telex~~ facsimile or otherwise, on the ~~first~~ same business ~~day following the~~ day on which such Oral Instructions ~~are given to the Custodian~~were given. ~~Each Trust~~ The Corporation agrees that the ~~fact that~~ failure of the Custodian to receive such confirming instructions ~~are not received by the Custodian~~ shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Corporation. ~~Each Trust~~ The Corporation agrees that the Custodian shall incur no liability to the ~~Funds in~~ Corporation for acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. ~~12.~~ J. The Custodian will (ai) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Corporation under the ~~Investment Company Act of 1940~~Act, with particular attention to Section 31 thereof and Rules ~~31 a-1~~ 31a-1 and ~~31 a-2 thereunder~~31a-2 thereunder and those records are the property of the Corporation, and (bii) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. ~~The~~ All such books and records shall be the property of the ~~custodian~~ Corporation; and shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Corporation. ~~13.~~ K. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly~~ send to the ~~Trusts, for the account of the Funds,~~ Corporation any report received on the systems of internal accounting control of the ~~Book~~Custodian, or its agents or sub-~~Entry System or the Depository and with such reports on their own systems of internal accounting control~~ custodians, as the ~~Trusts~~ Corporation may reasonably request from time to time. ~~14.~~ L. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as ~~a custodial agent~~ custodian shall not be deemed to be a recommendation to the ~~Custodian~~Corporation's ~~depositors~~ shareholders or others of shares of the Funds as an investment. M. The Custodian shall take all reasonable action, that the Corporation may from time to time request, to assist the Corporation in obtaining favorable opinions from the Corporation's independent accountants, with respect to the Custodian's activities hereunder, in connection with the preparation of the Corporation's Form N-lA, Form N-SAR, or other reports to the Securities and Exchange Commission. N. The Corporation hereby pledges to and grants the Custodian a security interest in any Fund Assets to secure the payment of any liabilities of the Corporation to the Custodian, whether acting in its capacity as Custodian or otherwise, or on account of money borrowed from the Custodian. This pledge is in addition to any other pledge of collateral by the Corporation to the Custodian.

Appears in 1 contract

Samples: Custody Agreement (One Fund Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust~~The Corporation, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by ~~a Trust~~ the Corporation with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each Trust~~the Corporation's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or inaction of the ~~respective Trust~~ Corporation or its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each Trust~~ the Corporation and its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the ~~Trust~~Corporation, its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Corporation at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Corporation, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, ~~have~~ having a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Corporation for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust~~the Corporation, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Corporation, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other ~~harmless,~~ harmless the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the ~~issue~~ issuer or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust~~ Corporation in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the ~~Trust~~Corporation, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend~~ dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) ~~Dividends~~ dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any ~~obligation~~ obligations or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any ~~Securities~~ securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Corporation's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Corporation, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective Trust~~ Corporation shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Corporation agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the ~~Trust~~Corporation, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, ~~liability~~ liability, or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable Trust~~ Corporation or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each Trust~~ The Corporation agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each Trust~~ The Corporation agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Corporation. ~~Each Trust~~ The Corporation agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Corporation. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Corporation, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Corporation may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Penn Capital Funds Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its ~~own~~ negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its~~ the Funds and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its~~ the Funds hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' ’ fees) arising or alleged to arise from or relating to ~~each~~ the Trust's ’s duties with respect to ~~its~~ the Funds hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' ’ fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's ’s duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, . with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its~~ the Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund~~'s accounts~~ ’s account or penalties imposed on the ~~Trusts~~Trust, in connection with the Funds, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "“Indemnifying Party"”) shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "“Indemnified Party"”) will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of ~~any~~ any) additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's ’s prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund’s interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's ’s option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current ~~Depository(s~~Depository (s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the ~~Trusts'~~ Trust’s By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts,~~ Trust the Funds and the Funds' ’ Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to ~~receive~~ received and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund’s account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the ~~account~~ accounts of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any ~~Certificate~~Certificate if such reliance is made in good faith. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Rydex Variable Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~agreement, (c)~~ the ~~date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable~~ Trust's duties with respect to the Fund ~~on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name~~ hereunder or any other action or inaction of the ~~issuer~~Trust or its Trustees, ~~the title and the number of shares~~ officers, employees or ~~the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and~~ agents as to the Fund~~'s then current Prospectus~~, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall ~~deliver on the borrowing date specified in a Certificate the specified collateral~~ defend, indemnify and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by hold harmless the Trust and its Trustees, officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged or arise from ~~time~~ or relating to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing ~~interpretation~~ Interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of ~~its~~ Its employees, agents, nominees or Sub-Custodians but not for any special, ~~incidental~~Incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery ~~on,~~ on Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party"'s) will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall ~~take~~ make over the complete defense of the claim and the ~~Indemnifying Party~~ other party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by ~~the~~ such Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the Trust, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV ~~hereof~~herein; or (h) The genuineness of any Certificate, Written Instructions or other writing herein described. 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV ~~hereof~~herein, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities ~~issued~~ Issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, approved by the Board of Trustees of the Trust, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. C. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Declaration of Trust and the ~~Trusts'~~ Fund By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C D attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.the

Appears in 1 contract

Samples: Custody Agreement (Gradison Custodian Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its~~ the Funds and only from ~~applicable Fund~~ Funds Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its~~ the Funds hereunder), shall defend, indemnify ~~and~~ .and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its~~ the Funds hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Directors, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its~~ the Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a Fund's accounts~~ the Funds' account or penalties imposed on the ~~Trusts~~Trust, in connection with the Funds, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "~~Indemnifying~~ Indemnified Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the ~~Indemnifying~~ Indemnified Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Analysts Investment Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or inaction of the ~~respective~~ Trust or its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, ~~nominees~~ nominees, or Sub-~~Custodians~~ Custodian but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the Trust, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian (s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation ~~all~~ an records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Gateway Trust)

Concerning the Custodian. 1. The Custodian shall exercise the standard of care of a professional custodian engaged in the banking or trust company industry and having professional expertise in financial and securities processing transactions and custody. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominees nor its agents (which the Custodian is hereby authorized to retain to perform certain of its functions hereunder and which may include subsidiaries or affiliates of the Custodian) shall ~~not~~ be liable for any ~~loss~~ lose or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be by fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The ~~Custodian~~ custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or of damage resulting from the use of the Book-Entry System or any Depository arising by reason of any ~~negligence, misfeasance~~ negligence or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In the event that the Custodian should determine that there has been any ~~case in which one party hereto may be asked to indemnify~~ lose or damage involving Securities of the ~~other or hold the other harmless~~Fund deposited with any Depository, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party Custodian shall take ~~over~~ such action with respect to its rights and remedies, if any, against such Depository as the ~~complete defense of the claim and the Indemnifying Party~~ Custodian shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent)reasonably deem appropriate. The Custodian ~~acknowledges~~ shall credit to the ~~limitation~~ Fund's account hereunder the amount, if any, as determined by the Custodian, of ~~liability provisions of Article XI of each Trust's Declaration of Trust and agrees that~~ the ~~obligations and liabilities of each Trust under this Agreement~~ payments, if any, recovered by the Custodian from, or for the account of, any Depository as reimbursement for the lose of, or damage to, any Securities deposited by the Custodian hereunder with said Depository. With respect to any lose or damage which the Custodian may be liable hereunder, the Custodian shall be ~~limited by and~~ liable to the Fund only to the extent of the ~~Trust~~ Fund's general damages, determined based on the market value of the property which is the subject of the lose at the date of discovery of the loss. General damages shall mean only those damages as directly and ~~its assets and that~~ necessarily result from the ~~Custodian shall not be entitled~~ Custodian's negligence or willful misconduct without reference to ~~seek satisfaction~~ any special conditions or circumstances of the Fund's Series or of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreementtransaction. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the ~~account of the Funds~~Fund, the legality of the purchase thereof, or of the ~~propriety~~ property of the amount paid therefor; (b) The legality of the sale of any Securities by or for the ~~account of the Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any ~~shares of the Funds~~Shares, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares~~ Shares, of ~~the Funds, or~~ the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (f) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; ~~(g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof.~~ 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds' interest at~~ Securities belonging to the Fund which compose a portion of the fungible bulk of Securities registered in the name of the Custodian (or its nominee) or in the name of the Book-Entry System or the Depository or their successor or successors, or their nominee or nominees, as shown on the Custodian's account on the books of the Book-Entry system or the Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i1) it shall be directed to take such action by a ~~Certificate and~~ Certificate, (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or~~action, ~~at the Custodian's option, prepayment~~and (iii) it shall agree to take such action. 76. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall Shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund and specifically allocated to a Series are such as properly may be held by the ~~Funds~~ Fund and allocated to such Series under the provisions of ~~the Declarations~~ its Articles of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian Incorporation and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to timethen current prospectus. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Canada Life of America Series Fund Inc)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the ~~Custodian~~ Custo- dian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or ~~omission~~ omis- sion to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopin- ion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, ~~misfeasance~~ misfeas- ance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. ~~Without~~ without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor; (ec) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; (ge) The legality of any loan of portfolio Securi- ties, nor shall the Custodian be under any duty or obliga- tion to see to it that any cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custo- dian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or xxxxx- cial institution to which portfolio Securities of the Fund are lent pursuant to Article IX of this Agreement makes pay- ment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account, Senior Security Account, Exempt Account or Securities Collateral Account in connection with transactions by the Fund. In addition, the Custodian shall be under no duty or obligation to ~~a Certificate described in clause (ii)~~ see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of ~~paragraph 2 (e)~~ any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any pay- ment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of ~~Article IV hereof~~the Custodian's receipt or non-receipt of any such payment. 3. The Custodian shall not be liable ~~for any money~~ for, or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered con- sidered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account ~~representing~~ represent- ing the ~~Funds'~~ Fund's interest at the Book-Entry System or the Depository. 4. The Custodian shall not be under any duty or ~~obligation~~ obli- gation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this ~~Agreement~~Agree- ment. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or ~~obligation~~ obli- gation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is ~~refused~~ refused, after due demand or ~~presentation~~pre- sentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or ~~Depositories or~~ Depositories, as Sub-Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon such terms and conditions as may be approved in a ~~Certificate. Current Depository(s)~~ Certificate or contained in an agreement exe- cuted by the Custodian, the Fund and ~~Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~appointed institu- tion. 87. The ~~Custodian~~ custodian shall not be under any duty or ~~obligation~~ obli- gation (a) to ascertain whether any Securities at any time delivered to to, or held by it it, for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the ~~provisions~~ provi- sions of ~~the Declarations~~ its Declaration of Trust and ~~the Trusts' By-Laws. 9. The Custodian shall treat all records~~ its then current prospectus and ~~other information relating to the Trusts~~statement of additional information, ~~the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing~~ or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such ~~disclosure is compelled~~ transactions as may properly be engaged in by ~~law~~the Fund. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all out-of-pocket expen- ses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf~~ Fund. The Custodian may charge such compensation and any expenses incurred by the Custodian in the performance of its duties pursuant to such agreement against any money held by it for the account of the ~~Funds~~Fund. The Custodian shall also be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund of the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses for which the Custodian ~~may charge against the accounts of the Funds~~ shall be entitled to xxxx- bursement hereunder shall include, but are not limited to, the expenses of ~~Sub~~sub-~~Custodians~~ custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. Such reliance by the Custodian shall include, without limitation, reliance on the validity, legality and propriety of any instructions continued there- in. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian ~~pursuant to Article IV or V hereof~~hereinabove provided for. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, ~~telex~~ telecopier or ~~otherwise~~other similar device, on or other- wise, by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such ~~confirming~~ confirm- ing instructions are not received by the Custodian shall in no way affect the validity of the transactions or ~~enforceability~~ enforce- ability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions reasonably appear to have been received from an Authorized Person. 1210. The Custodian ~~will (a) set up and maintain proper books of account and complete records of all transactions~~ shall be entitled to rely upon any instrument or notice in ~~the accounts maintained~~ writing received by the Custodian ~~hereunder~~ and reasonably believed by the Custodian to be a certifica- tion described in ~~such manner as will meet~~ paragraph 2 of Article X herein. Without limiting the ~~obligations~~ generality of the ~~Funds~~ foregoing, the Custodian shall be under no duty to acquire into, and shall not be liable for, the accuracy of any statements or representa- tions contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, or futures commission merchant. 11. The books and records pertaining to the Fund which are in the possession of the Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund's authorized representative, and the Fund shall reimburse the Custodian its expenses of providing such copies. 1312. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund - with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry System or the ~~Depository~~ Deposi- tory, and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 13. The Fund agrees to indemnify the Custodian against and save the Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of or in connection with the Custodian's payment or non-payment of checks pursu- ant to paragraph 6 of Article XIII as part of any check redemption privilege program of the Fund, except for any such liability, claim, loss and demand arising out of the Custodian's own negligence or willful misconduct. 14. ~~The~~ Subject to the foregoing provisions of this Agree- ment, the Custodian ~~performs only~~ may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the ~~services of a custodian and shall have no responsibility for~~ Custodian in accord- ance with the ~~management, investment or reinvestment of the Securities~~ customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 15. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibil- ities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 1 contract

Samples: Custody Agreement (Merrill Lynch Federal Securities Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall ~~defend, indemnify and hold harmless each Trust and~~ be paid as compensation for its ~~Trustees, Officers, employees or agents with respect~~ services pursuant to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that this Agreement such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable compensation as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust may from time to time ~~such Securities as additional collateral as may~~ be ~~specified~~ agreed upon in ~~a Certificate to collateralize further any transaction described in~~ writing between the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3two parties. The Custodian shall not be liable for any ~~money~~ action taken in good faith upon any certificate herein described or ~~collected funds~~ a certified copy of any resolution of the Trustees of the Trust, and may rely on the genuineness of any such document which it may in ~~U. S. dollars deposited in a Federal Reserve Bank other than~~ good faith believe to have been validly executed. The Trust agrees to indemnify and hold harmless the Custodian and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (including counsel fees) incurred or assessed against it or its nominee in ~~accordance~~ connection with ~~a Certificate described in clause (ii)~~ the performance of ~~paragraph 2 (e) of Article IV hereof~~this Agreement, ~~nor be liable for~~ except such as may arise from the Custodian's or ~~considered~~ its nominee's own negligent action, negligent failure to ~~be the Custodian of any money, whether~~ act or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4willful misconduct. The Custodian ~~shall not be under~~ is authorized to charge any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the ~~Funds as follows: (a) Dividends~~ Trust for such items. The Custodian, however, expressly agrees that, notwithstanding anything to the contrary herein, or in law, that it will ~~be credited on~~ look solely to the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government assets of the ~~United States or agencies or instrumentalities thereof (excluding securities issued by~~ Trust for any obligations of the ~~Government National Mortgage Association) will~~ Trust hereunder and nothing herein shall be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under construed to create any ~~duty or obligation to take action to effect collection~~ personal liability of any ~~amount, if~~ Trustee or any shareholder of the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7Trust. The Custodian ~~may appoint one or more financial or banking institutions~~expressly acknowledges that the Declaration of Trust establishing the INVESCO Treasurer's Series Trust, dated January 27, 1988, a copy of which, together with all amendments thereto (the "Declaration"), is on file in the office of the Secretary of the Commonwealth of Massachusetts, provides that the name INVESCO Treasurer's Series Trust refers to the Trustees under the Declaration collectively as ~~Depository or Depositories or as Sub-Custodian or Sub-Custodians, including~~Trustees, but not ~~limited to~~as individuals or personally; and no Trustee, ~~banking institutions located in foreign countries~~shareholder, officer, employee or ~~Securities and monies at~~ agent of the INVESCO Treasurer's Series Trust shall be held to any ~~time owned by~~ personal liability, nor shall resort be had to their private property for the ~~Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved~~ satisfaction of any obligation or ~~liability under this Agreement~~ claim or otherwise, in connection with the ~~appointment or activities~~ affairs of ~~such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for~~ said INVESCO Treasurer's Series Trust, but the ~~account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of~~ "Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian Property" only shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianliable. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custodian Agreement (Invesco Treasurers Series Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust~~The Corporation, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by ~~a Trust~~ the Corporation with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each Trust~~the Corporation's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or inaction of the ~~respective Trust~~ Corporation or its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each Trust~~ the Corporation and its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the ~~Trust~~Corporation, its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Corporation at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Corporation, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Corporation for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by ~~a Trust~~the Corporation, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Corporation, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the ~~Trust~~ Corporation in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the ~~Trust~~Corporation, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Corporation's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Corporation, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective Trust~~ Corporation shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Corporation agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets or from the Funds; Advisor, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the ~~Trust~~Corporation, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable Trust~~ Corporation or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each Trust~~ The Corporation agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each Trust~~ The Corporation agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Corporation. ~~Each Trust~~ The Corporation agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 ~~a-1~~ a-l and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Corporation. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Corporation, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Corporation may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Frontier Funds Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of ~~its~~ its, own negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, . indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or inaction of the ~~respective~~ Trust or its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph., except the expenses of any additional counsel retained by the Indemnified Party. In no ~~case~~ means shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor;, (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the Trust, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be up liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the ~~account of the Funds~~ Fund as follows: (a) Dividends will be credited on an the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, ~~but~~ not limited to, ~~banking~~ banking, institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of ~~any~~ my obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Articles of ~~Trust~~ Incorporation and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian. for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written ~~Instructions~~ instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions ~~are~~ an received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or ~~the~~ The Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of ~~shares~~ share of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Gateway Trust)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage,~~ damage including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or ~~willful~~ misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts at the expense of the Funds,~~ Fund or of its own ~~counsel at its own expense~~counsel, the expenses for which may be charged to the Fund upon the mutual agreement of the Fund and the Custodian, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or ~~any Depository~~ the depositories arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The~~ If the Fund incurs any loss or damages resulting from the use of the Book-Entry System arising by reason of the negligence, misfeasance or misconduct on the part of any depository, the Custodian ~~acknowledges~~ agrees to initiate a claim through normal banking channels with the ~~limitation~~ depository for the amount of ~~liability~~ such loss or damage, subject to the provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph ~~shall survive the termination~~ 5 of this ~~Agreement~~Article VII. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any ~~Securities~~ securities, including covered calls, purchased by or for the ~~account of the Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid ~~therefor~~therefore; (b) The legality of the sale of any ~~Securities~~ securities, including covered calls, by or for the ~~account of the Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~capital stock of the Fund, or the sufficiency of the amount to be received ~~therefor~~therefore; (d) The legality of the ~~redemption~~ declaration of any dividend by the Fund, or the legality of the issue of any shares of the ~~Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or~~ Fund's capital stock in payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofstock dividend. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or ~~Depository~~the depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the ~~Securities~~ securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a ~~Certificate~~ certificate signed in the name of the Fund by any two officers, and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian ~~may~~ may, with the prior approval of the Fund, appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited ~~to,~~ to banking institutions located in foreign countries, ~~or Securities~~ of securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in ~~a Certificate~~written instructions from two officers of the Fund. ~~Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall~~ Such appointment may include, but is not ~~be relieved~~ limited to, the deposit of all or any ~~obligation or liability under this Agreement in connection~~ portion of the securities of the Fund with ~~the appointment or activities of such Depositories or Sub-Custodians~~DTC. 87. The Custodian shall not be under any duty or obligation to ascertain whether any ~~Securities~~ securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as may properly ~~may~~ be held by the ~~Funds~~ Fund under the provisions of ~~the Declarations~~ its Declaration of ~~Trust and the Trusts' By-Laws~~Trust. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the ~~Custodian~~ Custodian, such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian ~~shall be entitled~~ may charge such compensation and any costs or expenses incurred by the Custodian in the performance of its duties pursuant to ~~charge~~ such agreement against any money held by it for the account of the ~~Funds~~ Fund, provided, however, that Custodian shall provide the ~~amount~~ Fund with 48 hours' prior written notice that such charge will be made. If the Custodian receives a written notice from the Fund that it disputes the costs or expenses proposed to be charged or the mathematical calculation of ~~any loss~~the Custodian's compensation within the 48-hour notice period, ~~damage~~Custodian shall not charge the Fund's account until the parties agree as to the correct calculation of the compensation or the correct charge for costs and/or expenses, ~~liability or expense~~as the case may be. Furthermore, ~~including counsel fees~~if the parties are unable to reach such an agreement within five business days from the time Custodian first receives the Fund's notice of dispute as herein provided, ~~for which it shall be entitled to reimbursement under the provisions of~~ either party may terminate this Agreement ~~as determined by agreement of~~ upon 30 days' prior written notice to the ~~Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired~~other party. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of ~~Securities~~ securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any ~~Certificate~~certificate, notice or other instrument in writing received by the Custodian and believed by the Custodian to be genuine and to be sent by two officers of the Fund as defined in Article IX. The Custodian shall be entitled to rely upon any ~~Oral Instructions and any Written Instructions actually~~ instructions received by the Custodian pursuant to Article ~~IV or V hereof~~III hereof with regard to the purchase and sale of money market securities and believed by the Custodian to be genuine and to be given by an authorized person. ~~Each Trust~~ The Fund agrees to forward to the Custodian ~~Written Instructions~~ written instructions from ~~Authorized Persons~~ an authorized person confirming ~~Oral Instructions~~ such oral instructions in such manner so that such ~~Written Instructions~~ written instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such ~~Oral Instructions~~ oral instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon ~~Oral Instructions~~ oral instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions appear to have been received from a duly authorized person. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custodian Agreement (Country Mutual Funds Trust)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage,~~ damage including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Fund, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor; (ec) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; (ge) The legality of any loan of portfolio Securities, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are Ient pursuant to Article XIV of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account, Senior Security Account, Exempt Account or Collateral Account in connection with transactions by the Fund. In addition, the Custodian shall be under no duty or obligation to ~~a Certificate described in clause (ii)~~ see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of ~~paragraph 2 (e)~~ any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of ~~Article IV hereof~~the Custodian’s receipt or non-receipt of any such payment. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund’s interest at the Book-Entry System or the Depository. 4. The Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange, offers, tenders, interest rate changes or similar matters relating to Securities held in the Depositary, unless the Custodian shall have actually received timely notice from the Depositary. In no event shall the Custodian have any responsibility or liability for the failure of the Depositary to collect, or for the late collection or late crediting by the Depositary of any amount payable upon Securities deposited in the Depositary which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in the Depositary the Custodian shall make a claim against the Depositary on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action suit or proceeding in respect to any Securities held by the Depositary which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding paragraph 5 of this Article IX, the~~ The Custodian shall not be under any duty or obligation to take action to effect ~~collection~~ collection, of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 7. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or ~~Depositories or~~ Depositories, as Sub-Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon such terms and conditions as may be approved in a ~~Certificate. Current Depository(s)~~ Certificate or contained in an agreement executed by the Custodian, the Fund and ~~Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~appointed institution. 8. The Custodian shall not be under any duty or obligation (a) to ascertain whether any Securities at any time delivered to to, or held by it it, for the account of the ~~Funds~~ Fund and specifically allocated to a Series are such as properly may be held by the ~~Funds~~ Fund or such Series under the provisions of ~~the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts~~its then current prospectus, ~~the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing~~ or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such ~~disclosure is compelled~~ transactions as may properly be engaged in by ~~law~~the Fund. 109. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all out-of-pocket expenses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian may charge such compensation and any expenses with respect to a Series incurred by the Custodian in the performance of its duties pursuant to such agreement against any money specifically allocated to such Series. Unless and until the Fund instructs the Custodian by a Certificate to apportion any loss, damage, liability or expense among the Series in a specified manner, the Custodian shall also be entitled to charge against any money held by it for the account of a Series such Series’ pro rata share (based on such Series net asset value at the ~~Funds~~ time of the charge to the aggregate net asset value of all Series at that time) of the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses for which the Custodian ~~may charge against the accounts of the Funds~~ shall be entitled to reimbursement hereunder shall include, but are not limited ~~to,~~ to the expenses of ~~Sub~~sub-~~Custodians~~ custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 1110. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian ~~pursuant to Article IV or V hereof~~hereinabove provided for. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, ~~telex~~ telecopier or other similar device, or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions reasonably appear to have been received from an Authorized Person. 11. The Custodian shall be entitled to rely upon any instrument, instruction or notice received by the Custodian and reasonably believed by the Custodian to be given in accordance with the terms and conditions of any Margin Account Agreement. Without limiting the generality of the foregoing, the Custodian shall be under no duty to inquire into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. 12. The ~~Custodian will (a) set up~~ books and ~~maintain proper books of account and complete~~ records ~~of all transactions~~ pertaining to the Fund which are in the ~~accounts maintained by~~ possession of the Custodian ~~hereunder in such manner as will meet~~ shall be the ~~obligations~~ property of the ~~Funds under~~ Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund’s authorized representatives shall have access to such books and records during the Custodian’s normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund’s authorized representative, and the Fund shall reimburse the Custodian its expenses of providing such copies. Upon reasonable request of the Fund, the Custodian shall provide in hard copy or on micro-film, whichever the Custodian elects, any records included in any such delivery which are maintained by the Custodian on a computer disc, or are similarly maintained, and the Fund shall reimburse the Custodian for its expenses of providing such hard copy or micro-film. 13. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry ~~System~~ System, the Depository, or ~~the Depository~~ O.C.C., and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 14. The Fund agrees to indemnify the Custodian ~~performs only~~ against and save the ~~services~~ Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney’s fees, howsoever arising or incurred because of ~~a custodian and shall have no responsibility for~~ or in connection with the ~~management, investment~~ Custodian’s payment or ~~reinvestment~~ non-payment of checks pursuant to paragraph 6 of Article XIII as part of any check redemption privilege program of the ~~Securities~~ Fund, except for any such liability, claim, loss and demand arising out of the Custodian’s own negligence or willful misconduct. 15. Subject to the foregoing provisions of this Agreement, the Custodian may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the Custodian in accordance with the customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 16. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibilities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 1 contract

Samples: Custody Agreement (Aim Treasurers Series Trust)

Concerning the Custodian. ~~1. Except as otherwise provided herein,~~ For its services hereunder the Custodian shall ~~not~~ be ~~liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any~~ paid such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except compensation at such times as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time ~~such Securities as additional collateral as may~~ be ~~specified~~ agreed on in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted writing by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto ~~under this paragraph shall survive the termination of this~~ in a Custodian Fee Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any ~~money~~ action taken in good faith upon any custodian order or ~~collected funds~~ facsimile herein described, trade affirmation report, or certified copy of any resolution of the Board or of the Executive Committee of the Board, and may rely on the genuineness of any such document which it may, in ~~U. S. dollars deposited in a Federal Reserve Bank other than~~ good faith, believe to have been validly prepared or executed. The Trust agrees to indemnify and hold harmless the Custodian ~~in accordance with a Certificate described in clause~~ and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (iiincluding counsel fees) ~~of paragraph 2 (e) of Article IV hereof, nor be liable for~~ incurred or ~~considered to be the Custodian of any money, whether~~ assessed against it or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement nominee in connection with the ~~appointment~~ performance of this Agreement, except such as may arise from the Custodian's or ~~activities of such Depositories~~ its nominee's own negligent action, negligent failure to act or ~~Sub-Custodians. 8~~willful misconduct. The Custodian is authorized to charge any account of the Trust for such items. In the event of any advance of cash for any purpose made by the Custodian resulting from orders or instructions of the Trust, or in the event that the Custodian or its nominee shall ~~not~~ incur or be ~~under~~ assessed any ~~duty~~ taxes, charges, expenses, assessments, claims or ~~obligation~~ liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to ~~ascertain whether~~ act or willful misconduct, any ~~Securities~~ property at any time ~~delivered to or~~ held ~~by it~~ for the account of the ~~Funds are such as properly may~~ Trust shall be ~~held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9~~security therefore. The Custodian shall ~~treat all records and other information relating~~ maintain a standard of care equivalent to ~~the Trusts, the Funds and the Funds' Assets as confidential~~ that which would be required of a bailee for hire and shall not ~~disclose~~ be liable for any ~~such records~~ loss or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay damage to the ~~Custodian~~ Trust resulting from participation in a securities depository unless such ~~compensation as shall be determined pursuant to Appendix C attached hereto~~loss or damage arises by reason of any negligence, misfeasance, or ~~as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf~~ willful misconduct of ~~the Funds. The Custodian shall be entitled to charge against any money held by it for the account~~ officers or employees of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, ~~whether~~ or from its failure to enforce effectively such rights as it may have against any securities depository or from use of an agent, unless such loss or damage arises by ~~hand delivery~~reason of any negligence, ~~telex~~ misfeasance, or ~~otherwise, on the first business day following the day on which such Oral Instructions are given to~~ willful misconduct of officers or employees of the Custodian~~. Each Trust agrees that the fact that~~ , or from its failure to enforce effectively such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactionsrights as it may have against any agent. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custodian Agreement (Advisory Hedged Opportunity Fund)

Concerning the Custodian. 1. ~~Except~~ The Custodian shall use reasonable care in the performance of its duties hereunder, and, except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of ~~its~~ Its own ~~negligence~~ negligence, bad faith, or willful ~~misconduct~~misconduct or that of its officers, employees, or agents. ~~Each~~ The Trust, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or ~~inaction~~ Inaction of the ~~respective~~ Trust or ~~its~~ Its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the ~~Funds,~~ Fund. except such as may arise from the negligent action, ~~omission~~ omission, bad faith or willful misconduct of the Custodian, ~~its officers~~Its Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, . claim, liability or cost (including reasonable attorneys' fees) arising or ~~alleged~~ allege to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the ~~Funds,~~ Fund except such as may arise from the negligent action, ~~omission or~~ omission, bad faith c willful misconduct of the Trust, ~~its~~ Its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Fund, or of its own counsel at ~~its~~ Its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or ~~Sub-~~Sub - Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is Is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity (but not the authenticity) of the ~~issue~~ Issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid ~~therefor~~thereof or; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the Trust, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected funds in In U. S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it It on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date ~~irrespective~~ Irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities ~~issued~~ Issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date ~~irrespective~~ Irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding~~ Notwithstanding, paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is Is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of ~~its~~ Its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the ~~Declarations~~ Declaration of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the ~~Funds~~ Fund and the ~~Funds'~~ Fund Assets as confidential and shall not disclose -18- any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the ~~Funds~~Fund. The Custodian shall be entitled to charge against any money held by it It for the account of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including counsel fees, for which it It shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Fund include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely ~~upon~~ upon. any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in In such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 ~~a-1~~ a-l and 31 a-2 thereunder, and (b) preserve for `the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. Upon reasonable request of the Trust, the Custodian shall provide copies of any such books and records to the Trust or Its representative and the Trust shall reimburse the Custodian its cost of providing such copies. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts, for the account of the Funds~~Trust, any report received on the systems of internal accounting control of the Book-Entry ~~System or~~ System, the Depository and with such reports on ~~their~~ Its own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (Gradison McDonald Cash Reserves Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any ~~loss or~~ loss, damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own ~~negligence or~~ negligence, willful misconduct, or breach of this agreement. ~~Each~~ The Trust, ~~on behalf of its Funds and~~ but only from ~~applicable Fund~~ Trust Assets (or insurance purchased by a the Trust with respect to its liabilities ~~on behalf of its Funds~~ hereunder), shall ~~defend,~~ defend indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and ~~agents,~~ agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties ~~with respect to its Funds~~ hereunder or any other action or inaction of the ~~respective~~ Trust or its ~~Trustees~~Directors, ~~Officers~~officers, employees or ~~agents as to the Funds~~agents, except such as may arise from the negligent action, ~~omission or~~ omission, willful misconduct or breach of this agreement by the Custodian, its directors, officers, employees or agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Trust hereunder or any other action or inaction of the Custodian or its ~~Trustees~~directors, ~~Officers~~officers, employees, agents, nominees or ~~Sub-Custodians~~ Subcustodians as to the ~~Funds~~Trust, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its ~~Trustees~~Directors, ~~Officers~~officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Trust, or of ~~its~~ the Custodian's own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of ~~its~~ the Custodian's own counsel, unless counsel to the ~~Funds~~ Trust shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or ~~Sub-Custodians~~ Subcustodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its Funds~~the Trust, of principal and of interest to the date of recovery on, Securities or Foreign Securities incorrectly omitted from ~~or included in a Fund~~the Trust's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Trust, ~~therefrom or~~ for any failures to deliver Securities or Foreign Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph~~, except the~~ . The expenses of any additional counsel retained by the Indemnified Party shall be borne by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Trust, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Trust, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Trust, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Trust, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Trust; (f) The legality of any borrowing by the ~~Trust,~~ Trust on behalf of the ~~Funds~~Trust, using Securities as collateral; ~~(g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof.~~ 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Trust from the Dividend and Transfer Agent of the ~~Funds~~ Trust nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Trust of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Trust in accordance with this Agreement. 54. Income due or payable to the ~~Funds~~ Trust with respect to ~~Funds~~ Trust Assets will be credited to the account of the ~~Funds~~ Trust as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 65. Notwithstanding paragraph 5 4 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities or Foreign Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 76. ~~The~~ With the consent of the Trust, as evidenced by Written Instructions, the Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as ~~Sub-Custodian~~ Subcustodian or ~~Sub-Custodians~~Subcustodians, including, but not limited to, banking institutions located in foreign countries, or for Securities, Foreign Securities and monies at any time owned by the ~~Funds~~Trust, upon terms and conditions approved in a Certificate. Current Depository(s) and ~~Sub-Custodians(s~~Subcustodian(s) are noted in Appendix B. The Custodian shall not act as a custodian of Foreign Securities of the Trust until the Trust has directed it to so act in Written Instructions. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or ~~Sub-Custodians~~Subcustodians. Any such Subcustodian shall be qualified to serve as such for assets of investment companies registered under the 1940 Act. If the Custodian appoints a foreign Subcustodian, the Custodian shall limit the securities and other assets of the Trust maintained in the custody of any foreign Subcustodian to Foreign Securities and cash or cash equivalents in such amounts as the Custodian or the Trust may determine to be reasonably necessary to effect the Trust's foreign securities transactions. The Custodian shall identify on its books as belonging to the Trust the Foreign Securities held by each such foreign Subcustodian. The Custodian shall promptly forward to the Trust all documents it receives from any Subcustodian appointed hereunder which are provided to assist directors of registered investment companies to fulfill their responsibilities under Rule 17f-5 under the 1940 Act. Further, the Custodian shall promptly inform the Trust in writing if it receives any written statement of the Trust's account maintained by any Subcustodian which contains an error. 87. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Trust are such as properly may be held by the ~~Funds~~ Trust under the provisions of the ~~Declarations~~ Declaration of Trust and the ~~Trusts'~~ Trust's By-~~Laws~~laws. 98. The Custodian shall treat all records and other information relating to the ~~Trusts, the Funds~~ Trust and the ~~Funds'~~ Trust Assets as confidential and shall not disclose any such records or information to any other person unless (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 109. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Trust's account from Trust Assets only, such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix ~~approved~~ agreed to from time to time by the Custodian and the Trust~~, on behalf of the Funds~~. The Custodian shall be entitled to charge against any money held by it for the account of the ~~Funds~~ Trust the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the ~~accounts~~ account of the ~~Funds~~ Trust include, but are not limited to, the expenses of ~~Sub-Custodians~~ Subcustodians incurred in settling transactions involving the purchase and sale of Securities or Foreign Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianTrust. 1110. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Trust in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 1211. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Trust under the ~~Investment Company Act of 1940~~1940 Act, with particular attention to Section 31 thereof and Rules ~~31 a-1~~ 31a-1 and ~~31 a-2 thereunder~~31a-2 thereunder and those records are the property of the Trust, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 1312. The Custodian and its ~~Sub-Custodians~~ Subcustodians shall promptly send to the ~~Trusts~~Trust, for the account of the ~~Funds~~Trust, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 1413. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of ~~the~~ Securities, Foreign Securities or monies from time to time owned by the ~~Funds~~Trust. The Custodian is not a selling agent for shares of the ~~Funds~~ Trust and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Trust as an investment. 14. Anything to the contrary in their Contract notwithstanding, the Custodian shall be liable to the Trust for any loss or damage to the Trust resulting from use of a Subcustodian, Depository or Book-Entry System, by reason of any negligence, misfeasance or misconduct of the Custodian or any of its agents, Subcustodians or of any of its or their employees or from failure of the Custodian or any such agent or Subcustodians to enforce effectively such rights as it may have against a Subcustodian, the Depository or Book-Entry System; at the election of the Trust, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against such Subcustodian, the Depository or Book-Entry 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 Trust has not made whole for any such loss or damage. 15. The Custodian shall take all reasonable action as the Trust may from time to time request to obtain favorable opinions from the Trust's independent accountants with respect to the Trust's activities hereunder in connection with the preparation of the Trust's Form N-IA, Form N-SAR or other reports or documents required to be filed by the Trust with the Securities and Exchange Commission and with respect to any other requirements of such Commission. 16. The Trust hereby pledges to and grants the Custodian a security interest in any Securities or other property or assets of the Trust in the possession of the Custodian to secure the payment of any liabilities of the Trust to the Custodian, whether acting in its capacity as Custodian or otherwise, on account of money borrowed from the Custodian. This pledge is in addition to any other pledge of collateral by the Trust to the Custodian.

Appears in 1 contract

Samples: Custody Agreement (Lindner Investments)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall ~~defend, indemnify and hold harmless each Trust and~~ be paid as compensation for its ~~Trustees, Officers, employees or agents with respect~~ services pursuant to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that this Agreement such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable compensation as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust may from time to time ~~such Securities as additional collateral as may~~ be ~~specified~~ agreed upon in ~~a Certificate to collateralize further any transaction described in~~ writing between the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3two parties. The Custodian shall not be liable for any ~~money~~ action taken in good faith upon any certificate herein described or ~~collected funds~~ certified copy of any resolution of the Board of Directors or of the Executive Committee, and may rely on the genuineness of any such document which it may in ~~U. S. dollars deposited in a Federal Reserve Bank other than~~ good faith believe to have been validly executed. The Fund agrees to indemnify and hold harmless the Custodian ~~in accordance with a Certificate described in clause~~ and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (iiincluding counsel fees) ~~of paragraph 2 (e) of Article IV hereof, nor be liable for~~ incurred or ~~considered to be the Custodian of any money, whether~~ assessed against it or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement nominee in connection with the ~~appointment~~ performance of this Agreement, except such as may arise from its or ~~activities of such Depositories~~ its nominee's own negligent action, negligent failure to act or ~~Sub-Custodians. 8~~willful misconduct. The Custodian is authorized to charge any account of the Fund for such items other than those items which are associated with asserted claims and liabilities of the Custodian for its conduct. Payment to the Custodian for items which are associated with asserted claims and liabilities of the Custodian for its conduct may only be charged against an account of the Fund by the Custodian upon receipt of an officers' certificate from the Fund authorizing such payment. In the event of any advance of cash for any purpose made by the Custodian resulting from orders or instructions of the Fund, or in the event that the Custodian or its nominee shall ~~not~~ incur or be ~~under~~ assessed any ~~duty~~ taxes, charges, expenses, assessments, claims or ~~obligation~~ liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to ~~ascertain whether~~ act or willful misconduct, any ~~Securities~~ property at any time ~~delivered to or~~ held ~~by it~~ for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian Fund shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodiansecurity therefor. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (State Bond Money Funds Inc)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its ~~own~~ negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its Funds~~ the Fund and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its Funds~~ the Fund hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the ~~Funds~~ Fund hereunder or any other action or inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the ~~Funds~~Fund, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the ~~Funds~~Fund, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the ~~Funds~~ Fund shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery from the Custodian by a the Trust, on behalf of ~~its Funds~~the Fund, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the ~~Funds~~Fund, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the ~~Funds~~Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the ~~Funds~~Fund, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the ~~Funds~~Fund, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the ~~Funds~~Fund, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the ~~Funds~~Fund; (f) The legality of any borrowing by the Trust, on behalf of the ~~Funds~~Fund, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof., 3. The Custodian shall not be liable for any money or collected ~~funds~~ fund in ~~U. S.~~ U.S. dollars deposited in a Federal Reserve Bank ~~other than the Custodian~~ in accordance with a Certificate described in clause (ii) of paragraph ~~2 (e~~2(e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the ~~Funds~~ Fund with respect to ~~Funds~~ Fund Assets will be credited to the account of the ~~Funds~~ Fund as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt ofof funds. (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or of Securities and monies at any time owned by the ~~Funds~~Fund, upon terms and conditions approved in a Certificate. Current ~~Depository(s~~Depository (s) and Sub-~~Custodians(s~~Custodian(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund under the provisions of the Declarations of Trust and the ~~Trusts'~~ Trust's By-Laws. 9. The Custodian shall treat all records and other information relating to the ~~Trusts~~Trust, the ~~Funds~~ Fund and the ~~Funds'~~ Fund's Assets as confidential and shall not disclose any such records or information to any other person ~~unless~~ unless: (a) the ~~respective~~ Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Trust agrees to pay to the ~~Custodian~~ Custodian, for the Fund's account from Fund Assets only, such compensation as shall be determined pursuant to Appendix C C, attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the ~~Funds~~Fund. The Custodian shall be ~~entitled~~ entitled, upon 10 days written notice to the Trust, to charge against any money held by it for the ~~account~~ accounts of the ~~Funds~~ Fund the amount of any loss, damage, liability or expense, including reasonable counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the ~~applicable~~ Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the ~~Funds~~ Fund include, but are not limited to, the reasonable expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 11. The Custodian shall be entitled to rely upon any ~~Certificate~~Certificate if such reliance is made in good faith. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. ~~Each~~ The Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. ~~Each~~ The Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. ~~Each~~ The Trust agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions, except as otherwise set forth herein. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the ~~Funds~~ Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the ~~custodian~~ Custodian shall be open to inspection and audit at reasonable times and with prior notice by ~~officers~~ Officers and auditors employed by the ~~Trusts~~Trust. 13. The Custodian and its Sub-Custodians shall promptly send to the ~~Trusts~~Trust, for the account of the ~~Funds~~Fund, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the ~~Trusts~~ Trust may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the ~~Funds~~Fund, except as otherwise set forth herein. The Custodian is not a selling agent for shares of the ~~Funds~~ Fund and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the ~~Funds~~ Fund as an investment.

Appears in 1 contract

Samples: Custody Agreement (44 Wall Street Equity Fund Inc /Md/)

Concerning the Custodian. ~~1. Except as otherwise provided herein, the~~ (a) The Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any ~~such loss~~ loss, damage, claim or ~~damage~~ expense arising out of its own negligence or willful misconduct~~. Each Trust~~, ~~on behalf~~ and shall have no obligation hereunder for any loss or damage, including counsel fees, which are sustained or incurred by reason of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any ~~loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other~~ action or inaction of by the ~~respective Trust~~ Book Entry System or ~~its Trustees, Officers, employees or agents as~~ any Depository. In no event shall Custodian be liable to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuerLocal Government, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder Bank or any ~~other action~~ third party for special, indirect or ~~inaction~~ consequential damages, or lost profits or loss of ~~the Custodian or its Trustees~~business, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agentsarising in connection with this Agreement. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel ~~to the Trusts at the expense of the Funds, or of its own counsel at its own expense,~~ and shall be fully protected with respect to anything done or omitted by it in good faith in and conformity with ~~the~~ such advice or ~~opinion~~ opinion. The Local Government and the Bank agree, jointly and severally, to indemnify the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of ~~counsel to~~ counsel, which the ~~Trusts, and shall~~ Custodian may sustain or incur or which may be ~~similarly protected with respect to anything done~~ asserted against the Custodian by reason of or as a result of any action taken or omitted by it the Custodian in ~~good faith in conformity~~ connection with ~~the advice~~ operating under this Agreement, except those costs, expenses, damages, liabilities or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use claims arising out of the ~~Book-Entry System~~ negligence or ~~any Depository arising by reason of any negligence, misfeasance or~~ willful misconduct ~~on the part~~ of the Custodian or any of its ~~employees,~~ employees or duly appointed agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. ~~In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party")~~ This indemnity shall be ~~advised~~ a continuing obligation of ~~all pertinent facts concerning~~ the ~~situation in question,~~ Local Government and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive Bank notwithstanding the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under not obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofresponsible for, ~~nor be liable for~~ or considered to be the ~~Custodian of~~ custodian of, any ~~money, whether or not represented by any check, draft, or other instrument for the payment of money,~~ Securities received by it ~~on behalf of~~ for deposit in the ~~Funds~~ Account until the Custodian actually receives and collects such ~~money~~ Securities directly or by the final crediting of the Custodian's account ~~representing~~ on the ~~Funds' interest at~~ books of the ~~Book-~~Book Entry System or the appropriate Depository~~. 4~~. The Custodian will be entitled to reverse any credits made on the Local Government's behalf where such credits have been previously made and the Securities are not finally collected. (c) The Custodian shall ~~not be under any duty~~ have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against the Custodian in connection with this Agreement. (d) The Local Government's authorized officer, upon reasonable notice, shall have access to ~~take action~~ the Custodian's books and records maintained with respect to ~~effect collection~~ the Local Government's interest in the Account during the Custodian's normal business hours. Upon the reasonable request of the Local Government, copies of any ~~amount due to the Funds from the Dividend~~ such books and ~~Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid~~ records shall be provided by the Custodian to the ~~Dividend and Transfer Agent of~~ Local Government or the ~~Funds in accordance with this Agreement~~Local Government's authorized officer at the Local Government's expense. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may ~~appoint one or more financial or banking institutions~~enter into subcontracts, ~~as Depository or Depositories or as Sub-Custodian or Sub-Custodians~~agreements and understandings, ~~including, but not limited to, banking institutions located in foreign countries, or Securities~~ whenever and ~~monies at any time owned by the Funds, upon~~ on such terms and conditions ~~approved in a Certificate. Current Depository(s)~~ as it deems necessary or appropriate, to perform its services hereunder; such subcontracts, agreements and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly understandings may be ~~held by the Funds under the provisions~~ with third parties and may be with other subsidiaries of ~~the Declarations~~ The Bank of ~~Trust and the Trusts' By-Laws. 9~~New York Mellon Corporation or any successor to The Bank of New York Mellon Corporation or with other persons not a party hereto. ~~The Custodian~~ No such subcontract, agreement or understanding shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to discharge the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodianfrom its obligations hereunder. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Third Party Custodian Agreement

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its ~~own~~ negligence or willful misconduct. ~~Each~~ The Trust, on behalf of ~~its~~ the Funds and only from ~~applicable~~ Fund Assets (or insurance purchased by a the Trust with respect to its liabilities on behalf of ~~its Funds~~ the Fund hereunder), shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its Trustees, ~~its officers~~Officers, ~~employees~~ Employees and ~~agents,~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~each~~ the Trust's duties with respect to ~~its~~ the Funds hereunder or any other action or inaction of the ~~respective~~ Trust or its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its ~~officers~~Trustees, ~~employees~~ Officers, Employees or ~~agents~~Agents. The Custodian shall defend, indemnify and hold harmless ~~each~~ the Trust and its Trustees, Officers, ~~employees~~ Employees or ~~agents~~ Agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or of inaction of the Custodian or its Trustees, Officers, ~~employees~~Employees, ~~agents~~Agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, ~~employees~~ Employees or ~~agents~~Agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the ~~Trusts~~Trust, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the ~~Trusts~~ Trust for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a the Trust, on behalf of ~~its~~ the Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from ~~or included in a~~ the Fund's ~~accounts~~ account or penalties imposed on the ~~Trusts~~Trust, in connection with the Funds, ~~therefrom or~~ for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "~~Indemnifying~~ Indemnification Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; ; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Rydex Dynamic Funds)

Concerning the Custodian. 1. ~~Except~~ The Custodian shall use reasonable care in the performance of its duties hereunder, and, except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agree- ment, except for any such loss or damage arising out of its own ~~negligence~~ negligence, bad faith, or willful ~~misconduct. Each Trust, on behalf~~ misconduct or that of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, ~~agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees~~ or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund, at the expense of the ~~Funds~~Fund, or of its own ~~counsel~~ counsel, at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any ~~negligence, misfeasance~~ negligence or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. ~~Without limiting the generality of~~ Notwithstanding the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be ~~liable~~ li- able for: (a) The validity (but not the authenticity) of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor, as specified in a Certificate, Oral Instructions, or Written Instructions; (b) The legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor, as specified in a Certificate; (ec) The legality of the declaration or payment of any dividend by the ~~Trust~~ Fund, as specified in ~~respect of shares of the Funds~~a resolution, Certificate, Oral Instructions, or Written Instructions; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; (ge) The legality of any loan of portfolio Securi- ties, nor shall the Custodian be under any duty or obligation to see to it that the cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan, except that this sub- paragraph shall not excuse any liability the Custodian may have for failing to act in accordance with Article X hereof or any Certificate, Oral Instructions, or Written Instructions given in accordance with this Agreement. The Custodian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obliga- tion to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent pursuant to Article X of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termina- tion of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account, Senior Security Account or Collateral Account in connection with transactions by the Fund, except that this sub-paragraph shall not excuse any liability the Custodian may have for failing to ~~a Certificate described~~ establish, maintain, make deposits to or withdrawals from such accounts in ~~clause (ii)~~ accordance with this Agreement. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of ~~paragraph 2 (e)~~ any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of ~~Article IV hereof~~the Custodian's receipt or non-receipt of any such payment. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives ~~and collects~~ such money directly or by the final crediting of the account representing the ~~Funds' interest~~ Fund's inter- est at the Book-Entry System or the Depository. 4. With respect to Securities held in a Depository, except as otherwise provided in paragraph 5(b) of Article III hereof, the Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rate changes or similar matters relating to such Securities, unless the Custodian shall have actually received timely notice from the Depository in which such Securities are held. In no event shall the Custodian have any responsibility or liability for the failure of a Depository to collect, or for the late col- lection or late crediting by a Depository of any amount pay- able upon Securities deposited in a Depository which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in a Depository the Custodian shall make a claim against the Depository on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action suit or proceeding in respect to any Securities held by a Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required, or alternatively, the Fund shall be subrogated to the rights of the Custodian with respect to such claim against the Depository should it so request in a Certificate. This paragraph shall not, however, excuse any failure by the Custodian to act in accordance with a Certificate, Oral Instructions, or Written Instructions given in accordance with this Agreement. 5. The Custodian shall not be under any duty or ~~obligation~~ obliga- tion to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding paragraph 5 of this Article IX, the~~ The Custodian shall not be under any duty or ~~obligation~~ obliga- tion to take action to effect collection of any ~~amount,~~ amount if the Securities upon which such amount is payable are in default, or if payment is refused after the Custodian has timely and properly, in accordance with this Agreement, made due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or~~action, at but the ~~Custodian's option, prepayment~~Custodian shall have such a duty if the Securities were not in default on the payable date and the Custodian failed to timely and properly make such demand for payment and such failure is the reason for the non-receipt of payment. 7. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions, as Depository or Depositories or~~ institutions as Sub-Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon such terms and conditions as may be approved in a ~~Certificate. Current Depository(s)~~ Certificate or contained in an agreement executed by the Custodian, the Fund and ~~Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~appointed institution. 8. The Custodian agrees to indemnify the Fund against and save the Fund harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of the negligence, bad faith or willful misconduct of any Sub-Custodian of the Securities and moneys owned by the Fund, provided such Sub-Custodian is a banking institution located in a foreign country and appointed by the Custodian pursuant to paragraph 7 of this Article. 9. The Custodian shall not be under any duty or ~~obligation~~ obliga- tion (a) to ascertain whether any Securities at any time delivered to to, or held by it it, for the account of the ~~Funds~~ Fund and specifically allocated to a Series are such as properly may be held by the ~~Funds~~ Fund or such Series under the provisions of ~~the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts~~its then current prospectus, ~~the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing~~ or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such ~~disclosure is compelled~~ transactions as may properly be engaged in by ~~law~~the Fund. 10. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all reasonable out-of-pocket expenses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust~~Fund. The Custodian may charge such compensation, ~~on behalf~~ and any such expenses with respect to a Series incurred by the Custodian in the performance of ~~the Funds~~its duties under this Agreement against any money specifically allocated to such Series. The Custodian shall also be entitled to charge against any money held by it for the account of ~~the Funds~~ a Series the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.it

Appears in 1 contract

Samples: Custody Agreement (TCW Dw Total Return Trust)

Concerning the Custodian. 1. Except as otherwise provided herein, the Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or ~~Sub-~~Sub- Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased by or for the account of the Funds, the legality of the purchase thereof, or the propriety of the amount paid therefor; ; (b) The legality of the sale of any Securities by or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; ; (e) The legality of the declaration or payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the Funds from the Dividend and Transfer Agent of the Funds nor to take any action to effect payment or distribution by the Dividend and Transfer Agent of the Funds of any amount paid by the Custodian to the Dividend and Transfer Agent of the Funds in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Git Tax Free Trust)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or ~~otherwise~~otherwise either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of ~~law~~ law, apply for and obtain the advice and opinion of counsel to the ~~Trusts at the expense of the Funds,~~ Fund or of its own counsel ~~at its own expense,~~ reasonably satisfactory to the Fund and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice or opinion, provided that such action is not in violation of applicable federal or state laws or regulations. Upon the prior agreement of the Fund, the cost of any such advice or opinion ~~of counsel to the Trusts, and shall~~ will be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received borne by the ~~Custodian, have a differing interpretation of such question of law~~Fund. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The Custodian acknowledges~~ In the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and event that the Custodian ~~shall not be entitled to seek satisfaction~~ determines that there has been any loss or damage involving Securities of any Series of the Fund deposited with any Depository, the Custodian shall assert whatever rights, and seek whatever remedies, it shall have against the Depository with respect to such ~~obligation~~ loss or ~~liability~~ damage. The Custodian shall credit to any Series' account hereunder the amount, if any, as determined by the Custodian, of the payments, if any, recovered by the Custodian from any Depository as reimbursement for any such loss or damage involving any Securities deposited by the Custodian hereunder with said Depository. In the event the Custodian in connection with such a loss or damage neither asserts such rights and seeks such remedies, nor credits to the Series' account hereunder the amount which the Fund and the Custodian agree would be recovered by any such Series from the ~~Trusts' shareholders~~Depository by the Custodian's assertion of such rights and remedies, ~~Trustees~~then, ~~Officers~~and only then, ~~employees or agents. The obligations~~ the Fund shall be subrogated to the rights of the ~~parties hereto under this paragraph shall survive~~ Custodian against the ~~termination of this Agreement~~Depository. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for ~~the account~~ any Series of the ~~Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor; (ec) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; (ge) The legality of any loan of portfolio Securities, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of any Series of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the account of any Series of the Fund is sufficient collateral, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of any Series of the Fund are lent pursuant to Article IX of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of such Series during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account, Senior Security Account, Exempt Account or Collateral Account in connection with transactions by any Series of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer, futures commission merchant or Clearing Member makes payment to any Series of the Fund of any variation margin payment or similar payment which such Series may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, or to see that any variation margin payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount such Series is entitled to receive, provided, however, that if any variation margin payment which a ~~Certificate described in clause (ii)~~ Series is entitled to receive or any portion of ~~paragraph 2 (e) of Article IV hereof~~such payment is not received by the Custodian, the Custodian promptly shall notify the Trust to that effect. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of a Series of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing ~~the Funds~~such Series' interest at in the Book-Entry System or the Depository. 4. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds nor~~ Fund not to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or ~~Depositories~~ Depositories, as sub-custodian or sub-custodians, or as Sub-Custodian or ~~Sub~~Co-~~Custodians,~~ Custodians including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by a Series of the ~~Funds~~Fund, upon such terms and conditions as may be approved in a ~~Certificate. Current Depository(s)~~ Certificate or contained in an agreement executed by the Custodian, the Fund and ~~Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~appointed institution. 87. The Custodian shall not be under any duty or obligation (a) to ascertain whether any Securities at any time delivered to to, or held by it it, for the account of a Series of the ~~Funds~~ Fund are such as properly may be held by the ~~Funds~~ Fund or such Series under the provisions of ~~the Declarations of Trust and the Trusts' By~~its then-~~Laws. 9. The Custodian shall treat all records and other information relating to the Trusts~~current prospectus, ~~the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing~~ or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such ~~disclosure is compelled~~ transactions as may properly be engaged in by ~~law~~the Fund. 108. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all out-of-pocket expenses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian ~~shall be entitled~~ may charge such compensation and any expenses incurred by the Custodian in the performance of its duties with respect to ~~charge~~ a Series against any money held by it for the account of such Series only in accordance with paragraph 2(c) of Article III hereof. Unless and until the ~~Funds~~ Fund instructs the ~~amount of~~ Custodian by a Certificate to apportion among the Series in a specified manner any loss, damage, liability or ~~expense, including counsel fees,~~ expense for which ~~it shall be~~ the Custodian is entitled to reimbursement under the provisions of this ~~Agreement as determined by agreement~~ Agreement, the Custodian shall allocate any such loss, damage, liability or expense to each Series according to such Series' pro rata share (based on the ratio of such Series' net asset value at the time of the ~~Custodian and~~ charge to the ~~applicable Trust or by~~ aggregate net asset value of all Series at that time) of the ~~final order~~ amount of any ~~court~~ such loss, damage, liability or ~~arbitrator having jurisdiction and as to which all rights of appeal shall have expired~~expense. The expenses for which the Custodian ~~may charge against the accounts of the Funds~~ shall be entitled to reimbursement hereunder shall include, but are not limited to, the expenses of ~~Sub~~sub-~~Custodians~~ custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 119. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian ~~pursuant to Article IV or V hereof~~hereinabove provided for. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, ~~telex~~ telecopier or other similar device, or otherwise, by the close of business on the ~~first~~ business ~~day following the~~ day on which such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions reasonably appear to have been received from an Authorized Person. 1210. The Custodian ~~will (a) set up and maintain proper books of account and complete records of all transactions~~ shall be entitled to rely upon any instrument or notice in ~~the accounts maintained~~ writing received by the Custodian ~~hereunder~~ and reasonably believed by the Custodian to be a certification furnished in ~~such manner as will meet~~ accordance with a Margin Account Agreement. Without limiting the ~~obligations~~ generality of the ~~Funds~~ foregoing, the Custodian shall be under no duty to inquire into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. 11. The books and records pertaining to the Fund which are in the possession of the Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund's authorized representative, and the Fund shall reimburse the Custodian its expenses of providing such copies. 1312. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry ~~System~~ System, the Depository, or ~~the Depository~~ O.C.C., and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 13. The Fund agrees to indemnify the Custodian against and save the Custodian harmless form all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of or in connection with the Custodian's payment or non-payment of checks pursuant to paragraph 6 of Article XII as part of any check redemption privilege program of the Fund, except for any such liability, claim, loss and demand arising out of the Custodian's own negligence or willful misconduct. 14. ~~The~~ Subject to the foregoing provisions of this Agreement, the Custodian ~~performs only~~ may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the ~~services of a custodian and shall have no responsibility for~~ Custodian in accordance with the ~~management, investment or reinvestment of the Securities~~ customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 15. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibilities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 1 contract

Samples: Custody Agreement (Pimco Advisors Funds)

Concerning the Custodian. 1. Except as ~~otherwise provided herein~~hereinafter provided, neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or ~~damage~~dam age, including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Fund, at the expense of the ~~Funds~~Fund, provided the Custodian has received writ ten authorization from the Fund to use the Fund's counsel, or of its own ~~counsel~~ counsel, at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Fund for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Fund, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) The legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor; (ec) The legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Fund; (fd) The legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Fund using Securities as collateral; (ge) The legality of any loan of portfolio Securities, nor shall the Custodian be under any duty or obligation to see to it that any cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan. The Custodian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent pursuant to Article XIV of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account, Senior Security Account or Collateral Account in connection with transactions by the Fund. In addition, the Custodian shall be under no duty or obligation to ~~a Certificate described in clause (ii)~~ see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of ~~paragraph 2 (e)~~ any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of ~~Article IV hereof~~the Custodian's receipt or non-receipt of any such payment. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Fund until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Fund's interest at the Book-Entry System or the Depository. 4. The Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange, offers, tenders, interest rate changes or similar matters relating to Securities held in the Depository, unless the Custodian shall have actually received timely notice from the Depository. In no event shall the Custodian have any responsibility or liability for the failure of the Depository to collect, or for the late collection or late crediting by the Depository of any amount payable upon Securities deposited in the Depository which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in the Depository the Custodian shall make a claim against the Depository on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action suit or proceeding in respect to any Securities held by the Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Fund from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. ~~Notwithstanding paragraph 5 of this Article IX, the~~ The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 7. The Custodian may appoint one or more ~~financial or~~ banking ~~institutions,~~ institutions as Depository or ~~Depositories or~~ Depositories, as Sub-Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not limited to, banking institutions located in foreign countries, or of Securities and ~~monies~~ moneys at any time owned by the ~~Funds~~Fund, upon such terms and conditions as may be approved in a ~~Certificate. Current Depository(s)~~ Certificate or contained in an agreement executed by the Custodian, the Fund and ~~Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with~~ the ~~appointment or activities of such Depositories or Sub-Custodians~~appointed institution. 8. The Custodian shall not be under any duty or obligation (a) to ascertain whether any Securities at any time delivered to to, or held by it it, for the account of the ~~Funds~~ Fund and specifically allocated to a Series are such as properly may be held by the ~~Funds~~ Fund or such Series under the provisions of ~~the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts~~its then current prospectus, ~~the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing~~ or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such ~~disclosure is compelled~~ transactions as may properly be engaged in by ~~law~~the Fund. 109. The Custodian shall be entitled to receive and the ~~Trusts agree~~ Fund agrees to pay to the Custodian all out-of-pocket expenses and such compensation as ~~shall~~ may be ~~determined pursuant~~ agreed upon from time to ~~Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by~~ time between the Custodian and the ~~Trust, on behalf of the Funds~~Fund. The Custodian may charge such compensation and any expenses with respect to a series incurred by the Custodian in the performance of its duties pursuant to such agreement against any money specifically al located to such Series. Unless and until the Fund instructs the Custodian by a Certificate to apportion any loss, damage, liability or expense among the Series in a specified manner, the Custodian shall also be entitled to charge against any money held by it for the account of a Series such Series' pro rata share (based on such Series net asset value at the ~~Funds~~ time of the charge to the aggregate net asset value of all Series at that time) of the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expiredAgreement. The expenses for which the Custodian ~~may charge against the accounts of the Funds~~ shall be entitled to reimbursement hereunder shall include, but are not limited to, the expenses of ~~Sub-Custodians~~ sub- custodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the CustodianFund. 1110. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be a Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian ~~pursuant to Article IV or V hereof~~hereinabove provided for. ~~Each Trust~~ The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming such Oral Instructions or Written ~~Instructions from Authorized Persons confirming Oral~~ Instructions in such manner so that such ~~Written Instructions are~~ Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, ~~telex~~ telecopier or other similar device, or otherwise, on by the ~~first~~ close of business of the same day ~~following the day on which~~ that such Oral Instructions or Written Instructions are given to the Custodian. ~~Each Trust~~ The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the ~~Trust~~Fund. ~~Each Trust~~ The Fund agrees that the Custodian shall incur no liability to the ~~Funds~~ Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such ~~transactions~~transactions provided such instructions reasonably appear to have been received from an Authorized Person. 11. The Custodian shall be entitled to rely upon any instrument, instruction or notice received by the Custodian and reasonably believed by the Custodian to be given in accordance with the terms and conditions of any Margin Account Agreement. Without limiting the generality of the foregoing, the Custodian shall be under no duty to require into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limitation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. 12. The ~~Custodian will (a) set up~~ books and ~~maintain proper books of account and complete~~ records ~~of all transactions~~ pertaining to the Fund which are in the ~~accounts maintained by~~ possession of the Custodian ~~hereunder in such manner as will meet~~ shall be the ~~obligations~~ property of the ~~Funds under~~ Fund. Such books and records shall be prepared and maintained as required by the Investment Company Act of 1940, ~~with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder~~as amended, and ~~(b) preserve for the periods prescribed by~~ other applicable ~~Federal statute or regulation all records required to be so preserved~~securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the ~~custodian~~ Fund, copies of any such books and records shall be ~~open to inspection and audit at reasonable times and with prior notice by officers and auditors employed~~ provided by the ~~Trusts~~Custodian to the Fund or the Fund's authorized representative, and the Fund shall reimburse the Custodian its expenses of providing such copies. 13. The Custodian ~~and its Sub-Custodians~~ shall ~~promptly send to~~ provide the ~~Trusts, for the account of the Funds,~~ Fund with any report ~~received~~ obtained by the Custodian on the ~~systems~~ system of internal accounting control of the Book-Entry ~~System~~ System, the Depository, or ~~the Depository~~ O.C.C., and with such reports on ~~their~~ its own systems of internal accounting control as the ~~Trusts~~ Fund may reasonably request from time to time. 14. ~~The~~ Subject to the foregoing provisions of this Agreement, the Custodian ~~performs only~~ may deliver and receive Securities, and receipts with respect to such Securities, and arrange for payments to be made and received by the ~~services of a custodian and shall have no responsibility for~~ Custodian in accordance with the ~~management, investment or reinvestment of the Securities~~ customs prevailing from time to time ~~owned by the Funds~~among brokers or dealers in such Securities. 15. The Custodian ~~is not a selling agent for shares of the Funds~~ shall have no duties or responsibilities whatsoever except such duties and ~~performance of its duties~~ responsibilities as ~~a custodial agent~~ are specifically set forth in this Agreement, and no covenant or obligation shall ~~not~~ be ~~deemed to be a recommendation to~~ implied in this Agreement against the Custodian~~'s depositors or others of shares of the Funds as an investment~~.

Appears in 1 contract

Samples: Custody Agreement (Bancroft Convertible Fund Inc)

Concerning the Custodian. 1. ~~Except as otherwise provided herein~~Notwithstanding any other provision of this Agreement, the ~~Custodian~~ CUSTODIAN shall not be liable for any loss or damage, including reasonable counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own ~~negligence~~ negligence, negligent failure to act, or willful misconduct. Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder), shall defend, indemnify and hold harmless the Custodian, its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of Custodian hereunder,~~ CUSTODIAN shall be under ~~not~~ no duty or obligation to inquire into, and shall not be liable for: (a) The validity of the issue of any Securities purchased ~~by or for the account of the Funds~~hereunder, the legality of ~~the purchase thereof~~any such purchase, or the propriety of the amount paid ~~therefor~~for any such purchase; (b) The legality of the sale of any Securities ~~by or for the account of the Funds~~hereunder, or the propriety of the amount for which the same are sold;; or (c) The legality of the declaration of any dividend by the FUND, or the legality of the issue ~~or sale~~ of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any shares of the Funds, or the propriety of the amount to be paid therefor; (e) The legality of the declaration or FUND’s capital stock in payment of any dividend by the Trust in respect of shares of the Funds; (f) The legality of any borrowing by the Trust, on behalf of the Funds, using Securities as collateral; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereofstock dividend. 3. The ~~Custodian~~ CUSTODIAN shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the ~~Custodian~~ custodian of any ~~money, whether or not~~ money represented by any check, draft, or other instrument for the payment of ~~money,~~ money received by it ~~on behalf of the Funds~~ until the CUSTODIAN or Eligible Foreign Custodian actually receives ~~and collects~~ such ~~money directly~~ money, or any contracts or Securities deposited with any third party or, except in connection with a purchase of Securities pursuant to Article VIII, any cash deposited by the ~~final crediting of the account representing the Funds' interest at the Book-Entry System or Depository~~CUSTODIAN with any third party pursuant to Instructions. 4. The ~~Custodian~~ CUSTODIAN shall not be under any duty or obligation to take action to effect collection of any amount due ~~to the Funds~~ from the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ FUND nor to take any action to effect payment or distribution by the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ FUND of any amount paid by the ~~Custodian~~ CUSTODIAN to the ~~Dividend and~~ Transfer Agent of the ~~Funds~~ FUND in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian The CUSTODIAN shall not be under any duty or obligation to take action either to effect collection of any amount, if the Securities upon which such amount is payable are in ~~default,~~ default or if payment is refused after due demand or ~~presentation,~~ presentation unless and until (i) it shall be directed to take such action by ~~a Certificate~~ Instructions, and (ii) it shall be assured to its satisfaction or of reimbursement of its costs and expenses in connection with any such ~~action or, at the Custodian's option, prepayment~~action. 76. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian CUSTODIAN shall not be under any duty or obligation to ascertain whether any ~~Securities~~ Security at any time delivered to or held by it ~~for the account of the Funds are~~ hereunder is such as ~~properly~~ may be properly held ~~by the Funds~~ under the provisions of the ~~Declarations~~ FUND’s Articles of ~~Trust and~~ Incorporation, the ~~Trusts'~~ FUND’S By-~~Laws~~laws, any representations set forth in a current FUND prospectus, or any laws or regulations applicable to the FUND. 97. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian CUSTODIAN shall be entitled to rely upon any ~~Certificate. The Custodian shall be entitled to rely upon any Oral~~ Instructions ~~and any Written Instructions actually~~ received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received CUSTODIAN and reasonably believed by the ~~Custodian, whether by hand delivery, telex or otherwise,~~ CUSTODIAN to be genuine. 8. The CUSTODIAN represents that it does not intend to obtain any insurance for the benefit of the FUND which protects against the imposition of exchange control restrictions on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity transfer from Mexico of the ~~transactions~~ proceeds of sale of any Securities or ~~enforceability~~ against confiscation, expropriation or nationalization of any securities or the assets of the ~~transactions hereby authorized~~ issuer of such securities by ~~the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12~~Mexico. The ~~Custodian will (a) set up~~ CUSTODIAN has discussed the availability of expropriation insurance with the FUND, and ~~maintain proper books of account and complete records of all transactions in~~ has advised the ~~accounts maintained by the Custodian hereunder in such manner~~ FUND as ~~will meet the obligations~~ to its understanding of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records position of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment staff of the Securities ~~from time~~ and Exchange Commission 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 ~~time owned by~~ political risk, including the ~~Funds~~appropriateness of insuring against such risk. The ~~Custodian is not a selling agent for shares~~ FUND has acknowledged that it has the responsibility to review the possibility of ~~the Funds~~ such risks and ~~performance of its duties as a custodial agent shall not~~ what, if any, action should be ~~deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment~~taken.

Appears in 1 contract

Samples: Custody Agreement (Mexico Fund Inc)

Concerning the Custodian. 1. Except as ~~otherwise~~ hereinafter provided ~~herein,~~ neither the Custodian nor its nominee shall ~~not~~ be liable for any loss or damage, including reasonable counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect~~ The Custodian agrees to ~~its liabilities on behalf of its Funds hereunder), shall defend,~~ indemnify and hold harmless the ~~Custodian,~~ Trust and Trust's Trustees and officers to the extent described below against any loss as a result of any breach or violation of this Agreement by the Custodian or its officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust agents or its ~~Trustees~~nominees, ~~Officers, employees or agents as to the Funds, except such as may arise~~ resulting from ~~the negligent action, omission~~ their negligence or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to agreement, (c) the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the Custodian's duties with respect to the Funds hereunder or any other action or inaction of the Custodian or its Trustees, Officers, employees, agents, nominees or Sub-Custodians as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Trust, its Trustees, Officers, employees or agentsmisconduct. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the ~~Trusts~~ Trust, 14 or of its own counsel, at the expense of the ~~Funds, or of its own counsel at its own expense~~Trust, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with ~~the~~ such advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of lawopinion. The Custodian shall be liable to the ~~Trusts~~ Trust for any ~~proximate~~ loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any ~~negligence, misfeasance~~ negligence or willful misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. ~~The~~ Notwithstanding the foregoing, or any other provision contained in this Agreement, in no event shall the Custodian ~~acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall~~ be ~~limited by and~~ liable to the ~~extent~~ Trust, its Trustees or officers, or any third party, for special, indirect or consequential damages, or lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the ~~Trust~~ possibility of such damages and ~~its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations~~ regardless of the ~~parties hereto under this paragraph shall survive the termination~~ form of ~~this Agreement~~action. 2. Without limiting the generality of the foregoing, the ~~Custodian, acting in the capacity of~~ Custodian ~~hereunder,~~ shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a) ~~The~~ the validity of the issue of any Securities ~~purchased~~ purchased, sold, or written by or for the ~~account of the Funds~~Trust, the legality of the ~~purchase~~ purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (b) ~~The~~ the legality of the sale ~~of any Securities by~~ or for the account of the Funds, or the propriety of the amount for which the same are sold; (c) The legality of the issue or sale of any shares of the Funds, or the sufficiency of the amount to be received therefor; (d) The legality of the redemption of any ~~shares of the Funds~~Shares, or the propriety of the amount to be received or paid therefor; (ec) ~~The~~ the legality of the declaration or payment of any dividend by the ~~Trust in respect of shares of the Funds~~Trust; (fd) ~~The~~ the legality of any borrowing by the ~~Trust, on behalf of the Funds,~~ Trust using Securities as collateral; (ge) ~~The~~ the sufficiency or value of any ~~deposit made pursuant~~ amounts of money and/or Securities held in any Margin Account or Collateral Account in connection with transactions by the Trust. In addition, the Custodian shall be under no duty or obligation to ~~a Certificate described in clause (ii)~~ see that any broker, dealer or Clearing Member makes payment to the Trust of ~~paragraph 2 (e)~~ any variation margin payment or similar payment which the Trust may be entitled to receive from such broker, dealer or Clearing Member, to see that any payment received by the Custodian from any broker, dealer or Clearing Member is the amount the Trust is entitled to receive, or to notify the Trust of ~~Article IV hereof~~the Custodian's receipt or non-receipt of any such payment. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereoffor, ~~nor be liable for~~ or considered to be the Custodian of of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the ~~Funds~~ Trust until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the ~~Funds'~~ Trust's interest at the Book-Entry System or the Depository. 4. The Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rate changes or similar matters relating to Securities held in the Depository, unless the Custodian shall have actually received timely notice from the Depository. In no event shall the Custodian have any responsibility or liability for the failure of the Depository to collect, or for the late collection or late crediting by the Depository of any amount payable upon Securities deposited in the Depository which may mature or be redeemed, retired, called or otherwise become payable. However, upon receipt of a Certificate from the Trust of an overdue amount on Securities held in the Depository the Custodian shall make a claim against the Depository on behalf of the Trust, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action, suit or proceeding in respect to any Securities held by the Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to the ~~Funds~~ Trust from the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Trust nor to take any action to effect payment or distribution by the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Trust of any amount paid by the Custodian to the ~~Dividend and Transfer Agent~~ transfer agent of the ~~Funds~~ Trust in accordance with this Agreement. 5. Income due or payable to the Funds with respect to Funds Assets will be credited to the account of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or reimbursement of its costs and expenses in connection with any such action or, at the Custodian's option, prepayment. 7. The Custodian may appoint one or more financial or banking institutions, as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited to, banking institutions located in foreign countries, or Securities and monies at any time owned by the Funds, upon terms and conditions approved in a Certificate. Current Depository(s) and Sub-Custodians(s) are noted in Appendix B. The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such Depositories or Sub-Custodians. 8. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to forward to the Custodian Written Instructions from Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, on the first business day following the day on which such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Kelmoore Strategic Trust)

Concerning the Custodian. 1. A. Except as otherwise provided herein, the Custodian shall not be liable for any loss or ~~damage, including counsel fees,~~ damage resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. ~~Each Trust, on behalf of its Funds and only from applicable Fund Assets (or insurance purchased by a Trust with respect to its liabilities on behalf of its Funds hereunder),~~ The Company shall defend, indemnify and hold harmless the ~~Custodian~~Custodian and its directors, ~~its~~ officers, employees and agents, with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to each Trust's duties with respect to its Funds hereunder or any other action or inaction of the respective Trust or its Trustees, Officers, employees or agents as to the Funds, except such as may arise from the negligent action, omission or willful misconduct of the Custodian, its officers, employees or agents. The Custodian shall defend, indemnify and hold harmless each Trust and its Trustees, Officers, employees or agents with respect to any loss, claim, liability or cost (including reasonable attorneys' fees) arising or alleged to arise from or relating to ~~agreement, (c)~~ the date and time, if known, on which the loan is to be entered into, (d) the date on which the loan becomes due and payable, (e) the total amount payable to the Fund on the borrowing date, (f) the market value of Securities collateralizing the loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities and (g) a statement that such loan is in conformance with the Investment Company Act of 1940 and the Fund's then current Prospectus. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank or broker of the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank or broker, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank or broker, by virtue of any promissory note or loan agreement. The Custodian shall deliver in the manner directed by the Trust from time to time such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in the paragraph. Such Trust shall cause all Securities released from collateral status to be returned directly to the Custodian and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that a Trust fails to specify in a Certificate the name of the issuer, the title and number of shares or the principal amount of any the CustodianCompany's duties ~~with respect to the Funds~~ hereunder or any other action or inaction of the ~~Custodian~~ Company or its ~~Trustees~~Managers, ~~Officers~~officers, ~~employees,~~ employees or agents~~, nominees or Sub-Custodians as to the Funds~~, except such as may arise from the negligent action, ~~omission or~~ omission, willful misconduct ~~of the Trust, its Trustees, Officers, employees~~ or agents. The Custodian may, with respect to questions of law apply for and obtain the advice and opinion of counsel to the Trusts at the expense of the Funds, or of its own counsel at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of counsel to the Trusts, and shall be similarly protected with respect to anything done or omitted by it in good faith in conformity with the advice or opinion of its counsel, unless counsel to the Funds shall, within a reasonable time after being notified of legal advice received by the Custodian, have a differing interpretation of such question of law. The Custodian shall be liable to the Trusts for any proximate loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees, agents, nominees or Sub-Custodians but not for any special, incidental, consequential, or punitive damages; provided, however, that nothing contained herein shall preclude recovery by a Trust, on behalf of its Funds, of principal and of interest to the date of recovery on, Securities incorrectly omitted from or included in a Fund's accounts or penalties imposed on the Trusts, in connection with the Funds, therefrom or for any failures to deliver Securities. In any case in which one party hereto may be asked to indemnify the other or hold the other harmless, the party from whom indemnification is sought (the "Indemnifying Party") shall be advised of all pertinent facts concerning the situation in question, and the party claiming a right to indemnification (the "Indemnified Party") will use a reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears to present a claim for indemnification against the Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of the indemnification, and in the event the Indemnifying Party so elects, such defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party and the Indemnifying Party will so notify the Indemnified Party and thereupon such Indemnifying Party shall take over the complete defense of the claim and the Indemnifying Party shall sustain no further legal or other expenses in such situation for which indemnification has been sought under this paragraph, except the expenses of any additional counsel retained by the Indemnified Party. In no case shall any party claiming the right to indemnification confess any claim or make any compromise in any case in which the other party has been asked to indemnify such party (unless such confession or compromise is made with such other party's prior written consent). The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The Custodian acknowledges the limitation of liability provisions of Article XI of each Trust's Declaration of Trust and agrees that the obligations and liabilities of each Trust under this Agreement shall be limited by and to the extent of the Trust and its assets and that the Custodian shall not be entitled to seek satisfaction of any such obligation or liability from the Trusts' shareholders, Trustees, Officers, employees or agents. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement.breach of 2. B. Without limiting the generality of the foregoing, the Custodian, acting in the capacity of Custodian hereunder, shall be under ~~not~~ no obligation to inquire into, and shall not be liable for: (a1.) The validity of the issue of any Securities purchased by or for the account of ~~the Funds~~a Fund, the legality of the purchase thereof, or the propriety of the amount paid therefor; (b2.) The legality of the sale of any Securities by or for the account of ~~the Funds~~a Fund, or the propriety of the amount for which the same are sold; (c3.) The legality of the issue or sale of any ~~shares~~ interests of ~~the Funds~~a Fund, or the sufficiency of the amount to be received therefor; (d4.) The legality of the redemption of any ~~shares~~ interests of ~~the Funds~~a Fund, or the propriety of the amount to be paid therefor; (e5.) The legality of the declaration or payment of any dividend by ~~the Trust~~ a Fund in respect of ~~shares~~ interests of the ~~Funds~~Fund; (f6.) The legality of any borrowing by ~~the Trust,~~ a Fund on behalf of ~~the Funds~~a Fund, using Securities as collateral~~; (g) The sufficiency of any deposit made pursuant to a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof~~. 3. The Custodian shall not be liable for any money or collected funds in U. S. dollars deposited in a Federal Reserve Bank other than the Custodian in accordance with a Certificate described in clause (ii) of paragraph 2 (e) of Article IV hereof, nor be liable for or considered to be the Custodian of any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Funds until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Funds' interest at the Book-Entry System or Depository. 4. C. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due to ~~the Funds~~ a Fund from ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund nor to take any action to effect payment or distribution by ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund of any amount paid by the Custodian to ~~the~~ any Dividend and Transfer Agent of the ~~Funds~~ Fund in accordance with this Agreement~~. 5~~. ~~Income due or payable to the Funds with respect to Funds Assets will be credited to the account~~ D. Notwithstanding Section D of the Funds as follows: (a) Dividends will be credited on the first business day following payable date irrespective of collection. (b) Interest on fixed rate municipal bonds and debt securities issued or guaranteed as to principal and/or interest by the government of the United States or agencies or instrumentalities thereof (excluding securities issued by the Government National Mortgage Association) will be credited on payable date irrespective of collection. (c) Interest on fixed rate corporate debt securities will be credited on the first business day following payable date irrespective of collection. (d) Interest on variable and floating rate debt securities and debt securities issued by the Government National Mortgage Association will be credited upon the Custodian's receipt of (e) Proceeds from options will be credited upon the Custodian's receipt of funds. 6. Notwithstanding paragraph 5 of this Article IXV, the Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction or (including prepayment thereof) of reimbursement of its costs and expenses in connection with any such ~~action or, at~~ action. E. The Company acknowledges and hereby authorizes the ~~Custodian's option, prepayment. 7~~Custodian to hold Securities through its various agents described in Appendix B annexed hereto. The Company hereby represents that such authorization has been duly approved by the Board Of Managers of the Company as required by the Act. The Custodian acknowledges that although certain Fund Assets are held by its agents, the Custodian remains primarily liable for the safekeeping of the Fund Assets. In addition, the Company acknowledges that the Custodian may appoint one or more financial ~~or banking~~ institutions, as ~~Depository~~ agent or ~~Depositories~~ agents or as ~~Sub~~sub-~~Custodian~~ custodian or ~~Sub~~sub-~~Custodians, including, but not limited to, banking institutions located in foreign countries, or~~ custodians for the purpose of holding Securities and ~~monies~~ moneys at any time owned by the Funds~~, upon terms and conditions approved in a Certificate~~. ~~Current Depository(s) and Sub-Custodians(s) are noted in Appendix B.~~ The Custodian shall not be relieved of any obligation or liability under this Agreement in connection with the appointment or activities of such ~~Depositories~~ agents or ~~Sub~~sub-~~Custodians. 8~~custodians. ~~The~~ Any such agent or sub-custodian shall be qualified to serve as such for assets of investment companies registered under the Act. Upon request, the Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by it for the account of the Funds are such as properly may be held by the Funds under the provisions of the Declarations of Trust and the Trusts' By-Laws. 9. The Custodian shall treat all records and other information relating to the Trusts, the Funds and the Funds' Assets as confidential and shall not disclose any such records or information to any other person unless (a) the respective Trust shall have consented thereto in writing or (b) such disclosure is compelled by law. 10. The Custodian shall be entitled to receive and the Trusts agree to pay to the Custodian such compensation as shall be determined pursuant to Appendix C attached hereto, or as shall be determined pursuant to amendments to such Appendix approved by the Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled to charge against any money held by it for the account of the Funds the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement as determined by agreement of the Custodian and the applicable Trust or by the final order of any court or arbitrator having jurisdiction and as to which all rights of appeal shall have expired. The expenses which the Custodian may charge against the accounts of the Funds include, but are not limited to, the expenses of Sub-Custodians incurred in settling transactions involving the purchase and sale of Securities of the Funds. Notwithstanding the above, to the extent such compensation and expenses of the Custodian are paid to the Custodian by the Adviser pursuant to the services agreements between the Trusts and the Adviser, no charges shall be made against the accounts of the Funds by the Custodian. 11. The Custodian shall be entitled to rely upon any Certificate. The Custodian shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Custodian pursuant to Article IV or V hereof. Each Trust agrees to promptly forward to the ~~Custodian Written Instructions~~ Company any documents it receives from ~~Authorized Persons confirming Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex~~ any agent or ~~otherwise, on the first business day following the day on~~ sub-custodian appointed hereunder which ~~such Oral Instructions are given to the Custodian. Each Trust agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity~~ may assist trustees of registered investment companies fulfill their responsibilities under Rule 17f-5 of the transactions or enforceability of the transactions hereby authorized by the Trust. Each Trust agrees that the Custodian shall incur no liability to the Funds in acting upon Oral Instructions given to the Custodian hereunder concerning such transactionsAct. 12. The Custodian will (a) set up and maintain proper books of account and complete records of all transactions in the accounts maintained by the Custodian hereunder in such manner as will meet the obligations of the Funds under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods prescribed by applicable Federal statute or regulation all records required to be so preserved. The books and records of the custodian shall be open to inspection and audit at reasonable times and with prior notice by officers and auditors employed by the Trusts. 13. The Custodian and its Sub-Custodians shall promptly send to the Trusts, for the account of the Funds, any report received on the systems of internal accounting control of the Book-Entry System or the Depository and with such reports on their own systems of internal accounting control as the Trusts may reasonably request from time to time. 14. The Custodian performs only the services of a custodian and shall have no responsibility for the management, investment or reinvestment of the Securities from time to time owned by the Funds. The Custodian is not a selling agent for shares of the Funds and performance of its duties as a custodial agent shall not be deemed to be a recommendation to the Custodian's depositors or others of shares of the Funds as an investment.

Appears in 1 contract

Samples: Custody Agreement (Dow Target Variable Fund LLC)

Common use of Concerning the Custodian Clause in Contracts