CUSTODY AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
AND
FORESTER FUNDS, INC.
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptance; and
Furnishing of Documents
II. A. Appointment of Custodian. 2
II. B. Acceptance of Custodian. 2
II. C. Documents to be Furnished. 2
II. D. Notice of Appointment of Dividend
and Transfer Agent. 2
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys. 2
III. B. Delivery of Securities. 2
III. C. Payments for Shares. 3
III. D. Duties Upon Receipt. 3
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. 3
IV. B. Segregation of Redemption Proceeds. 3
IV. C. Disbursements of Custodian. 3
IV. D. Payment of Custodian Fees. 3
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund. 3
V. B. Segregation of Non-Cash Assets. 3
V. C. Securities in Bearer and
Registered Form. 3
V. D. Duties of Custodian as to Securities. 3
V. E. Certain Actions Upon Written
Instructions. 4
V. F. Custodian to Deliver Proxy Materials. 4
V. G. Custodian to Deliver Tender Offer
Information. 4
V. H. Custodian to Deliver Security and
Transaction Information. 4
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 5
VI. B. Sale of Securities. 5
VI. C. Delivery Versus Payment for
Purchases and Sales. 5
VI. D. Payment on Settlement Date. 5
VI. E. Segregated Accounts. 5
VI. F. Advances for Settlement. 6
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings. 6
VII. B. Advances. 6
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of
Custodian. 6
VIII. B. Actions not Required by Custodian. 7
VIII. C. No Duty to Collect Amounts Due
From Dividend and Transfer Agent. 7
VIII. D. No Enforcement Actions. 8
VIII. E. Authority to Use Agents and
Sub-Custodians. 8
VIII. F. No Duty to Supervise Investments. 8
VIII. G. All Records Confidential. 8
VIII. H. Compensation of Custodian. 8
VIII. I. Reliance Upon Instructions. 8
VIII. J. Books and Records. 8
VIII. K. Internal Accounting Control Systems.8
VIII. L. No Management of Assets by
Custodian. 8
VIII. M. Assistance to Trust. 9
ARTICLE IX - Termination
IX. A. Termination. 9
IX. B. Failure to Designate Successor
Custodian. 9
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 9
XI. B. Limitation of Personal Liability. 9
XI. C. Authorization By Board. 10
XI. D. Custodian's Consent to Use of Its
Name. 10
XI. E. Notices to Custodian. 10
XI. F. Notices to Trust. 10
XI. G. Amendments In Writing. 10
XI. H. Successors and Assigns. 10
XI. I. Governing Law. 10
XI. J. Jurisdiction. 10
XI. K. Counterparts. 10
XI. L. Headings. 10
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the
____ day of November, 2002, by and between Forester Funds, Inc.,
a Maryland corporation (the "Trust") and The Huntington National Bank, (the
"Custodian"), a national banking association having its principal office at
00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Trust as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Trust and the Custodian agree as follows:
Definitions
The following words and phrases, when used in this Agreement,
unless the context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended.
1934 Act - the Securities and Exchange Act of 1934, as amended.
Authorized Person - any person, whether or not any such person is an
officer or employee of the Trust, who is duly authorized by the Board of
Directors of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and
as amended from time to time by resolution of the Board of Directors,
certified by an Officer, and received by the Custodian.
Board of Directors - the Directors from time to time serving under
the Trust's Articles of Incorporation, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in
Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFT
Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of Subpart O.
Business Day - any day recognized as a settlement day by The New York
Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose
trust company, its successor(s) and its nominee(s). Depository shall
include any other clearing agency registered with the SEC under Section 17A
of the 1934 Act which acts as a system for the central handling of Securities
where all Securities of any particular class or series of an issuer deposited
within the system are treated as fungible and may be transferred or pledged
by bookkeeping entry without physical delivery of the Securities provided
that the Custodian shall have received a copy of a resolution of the Board of
Directors, certified by an Officer, specifically approving the use of such
clearing agency as a depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside
of the United States by a foreign government, a national of any foreign
country, or a trust or other organization incorporated or organized under
the laws of any foreign country or; b) securities issued or guaranteed by
the government of the United States, by any state, by any political
subdivision or agency thereof, or by any entity organized under the laws of
the United States or of any state thereof, which have been issued and sold
primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any
additional series added pursuant to Proper Instructions. A series is
individually referred to as a "Fund" and collectively referred to as the
"Funds."
Money Market Security - debt obligations issued or guaranteed as
to principal and/or interest by the government of the United States or
agencies or instrumentalities thereof, commercial paper, obligations
(including certificates of deposit, bankers' acceptances, repurchase
agreements and reverse repurchase agreements with respect to the same),
and time deposits of domestic banks and thrift institutions whose deposits
are insured by the Federal Deposit Insurance Corporation, and short-term
corporate obligations where the purchase and sale of such securities
normally require settlement in federal funds or their equivalent on the
same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and
received by the Custodian from an Authorized Person (or from a person
that the Custodian reasonably believes in good faith to be an Authorized
Person) and confirmed by Written Instructions in such a manner that such
Written Instructions are received by the Custodian on the Business Day
immediately following receipt of such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions.
Proper Instructions may be continuing Written Instructions when deemed
appropriate by both parties.
Prospectus - With respect to each Fund, the Fund's then currently
effective prospectus and Statement of Additional Information, as filed
with and declared effective from time to time by the Securities and
Exchange Commission.
Security or Securities - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures,
corporate debt securities, mortgages, bank certificates of deposit,
bankers' acceptances, mortgage-backed securities or other obligations
and any certificates, receipts, warrants, or other instruments or
documents representing rights to receive, purchase, or subscribe for
the same or evidencing or representing any other rights or interest
therein, or any similar property or assets, including securities of
any registered investment company, that the Custodian has the
facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United
States of America.
Shares - with respect to a Fund, the units of beneficial interest
issued by the Trust on account of such Fund.
Trust - the corporation organized under the laws of Maryland
which is an open-end management investment company registered under
the Act.
Written Instructions - communications in writing actually
received by the Custodian from an Authorized Person. A communication
in writing includes a communication by facsimile, telex or between
electro-mechanical or electronic devices (where the use of such devices
have been approved by resolution of the Board of Directors and the
resolution is certified by an Officer and delivered to the Custodian).
All written communications shall be directed to the Custodian,
attention: Institutional Trust Custody Group.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. The Trust hereby
constitutes and appoints the Custodian as custodian of all Securities
and cash owned by each Fund at any time during the term of this
Agreement.
II. B. Acceptance of Custodian. The Custodian hereby
accepts appointment as such custodian and agrees to perform the
duties thereof as hereinafter set forth.
II. C. Documents to be Furnished. The following documents,
including any amendments thereto, will be provided contemporaneously
with the execution of the Agreement, to the Custodian by the Trust:
1.) A copy of the Articles of Incorporation certified by the Secretary.
2.) A copy of the By-Laws certified by the Secretary.
3.) A copy of the resolution of the Board of Directors appointing the
Custodian, certified by the Secretary.
4.) A copy of the then current Prospectuses.
5.) A Certificate of the President and Secretary setting forth the
names and signatures of all Authorized Persons.
II. D. Notice of Appointment of Dividend and Transfer
Agent. The Trust agrees to notify the Custodian in writing of the
appointment, termination or change in appointment of any Dividend and
Transfer Agent.
ARTICLE III
Receipt of Trust Assets
III. A. Delivery of Moneys. During the term of this
Agreement, the Trust will deliver or cause to be delivered to
the Custodian all moneys to be held by the Custodian for the
account of any Fund. The Custodian shall be entitled to reverse
any deposits made on any Fund's behalf where such deposits have
been entered and moneys are not finally collected within 20 days
of the making of such entry.
III. B. Delivery of Securities. During the term of
this Agreement, the Trust will deliver or cause to be delivered
to the Custodian all Securities to be held by the Custodian for
the account of any Fund. The Custodian will not have any duties
or responsibilities with respect to such Securities until
actually received by the Custodian. The Custodian is hereby
authorized by the Trust, acting on behalf of a Fund, to
actually deposit any assets of the Fund in the Book-Entry System
or in a Depository, provided, however, that the Custodian shall
always be accountable to the Trust for the assets of the Fund so
deposited. Assets deposited in the Book-Entry System or the
Depository will be represented in accounts which include only
assets held by the Custodian for customers, including but not
limited to accounts in which the Custodian acts in a fiduciary
or representative capacity.
III. C. Payments for Shares. As and when received,
the Custodian shall deposit to the account(s) of a Fund any and
all payments for Shares of that Fund issued or sold from time to
time as they are received from the Trust's distributor or
Dividend and Transfer Agent or from the Trust itself.
III. D. Duties Upon Receipt. The Custodian shall not
be responsible for any Securities, moneys or other assets of any
Fund until actually received.
ARTICLE IV
Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. The Trust
shall furnish to the Custodian a copy of the resolution of
the Board of Directors of the Trust, certified by the Trust's
Secretary, either (i) setting forth the date of the declaration
of any dividend or distribution in respect of Shares of any Fund
of the Trust, the date of payment thereof, the record date as
of which the Fund shareholders entitled to payment shall be
determined, the amount payable per share to Fund shareholders of
record as of that date, and the total amount to be paid by the
Dividend and Transfer Agent on the payment date, or (ii)
authorizing the declaration of dividends and distributions in
respect of Shares of a Fund on a daily basis and authorizing the
Custodian to rely on Written Instructions setting forth the date
of the declaration of any such dividend or distribution, the date
of payment thereof, the record date as of which the Fund
shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date,
and the total amount to be paid by the Dividend and Transfer
Agent on the payment date.
On the payment date specified in the resolution or Written
Instructions described above, the Custodian shall segregate such
amounts from moneys held for the account of the Fund so that they
are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon
receipt of Proper Instructions so directing it, the Custodian
shall segregate amounts necessary for the payment of redemption
proceeds to be made by the Dividend and Transfer Agent from
moneys held for the account of the Fund so that they are
available for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a
Written Instruction directing payment and setting forth the name
and address of the person to whom such payment is to be made, the
amount of such payment, the name of the Fund from which payment
is to be made, and the purpose for which payment is to be made,
the Custodian shall disburse amounts as and when directed from
the assets of that Fund. The Custodian is authorized to rely on
such directions and shall be under no obligation to inquire as to
the propriety of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written
Instructions directing payment, the Custodian shall disburse
moneys from the assets of the Trust in payment of the Custodian's
fees and expenses as provided in Article VIII hereof.
ARTICLE V
Custody of Trust Assets
V. A. Separate Accounts for Each Fund. As to each Fund,
the Custodian shall open and maintain a separate bank account or
accounts in the United States in the name of the Trust coupled
with the name of such Fund, subject only to draft or order by
the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account
of the Fund, other than cash maintained by the Fund in a bank
account established and used by the Fund in accordance with Rule
17f-3 under the Act. Moneys held by the Custodian on behalf of a
Fund may be deposited by the Custodian to its credit as Custodian
in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be
withdrawable by the Custodian only in such capacity.
V. B. Segregation of Non-Cash Assets. All Securities and
non-cash property held by the Custodian for the account of a Fund
(other than Securities maintained in a Depository or Book-entry
System) shall be physically segregated from other Securities and
non-cash property in the possession of the Custodian (including
the Securities and non-cash property of the other Funds) and shall
be identified as subject to this Agreement.
V. C. Securities in Bearer and Registered Form. All
Securities held which are issued or issuable only in bearer form,
shall be held by the Custodian in that form; all other Securities
held for a Fund may be registered in the name of the Custodian,
any sub-custodian appointed in accordance with this Agreement,
or the nominee of any of them. The Trust agrees to furnish to
the Custodian appropriate instruments to enable the Custodian to
hold, or deliver in proper form for transfer, any Securities that
it may hold for the account of any Fund and which may, from time
to time, be registered in the name of a Fund.
V. D. Duties of Custodian as to Securities. Unless otherwise
instructed by the Trust, with respect to all Securities held for
the Trust, the Custodian shall on a timely basis (concerning items
1 and 2 below, as defined in the Custodian's Mutual Fund Custody
Model, as amended from time to time, annexed hereto as Appendix D):
1.) Collect all income due and payable with respect
to such Securities;
2.) Present for payment and collect amounts payable
upon all Securities which may mature or be called, redeemed, or
retired, or otherwise become payable;
3.) Surrender interim receipts or Securities in
temporary form for Securities in definitive form; and
4.) Execute, as Custodian, any necessary
declarations or certificates of ownership under the Federal income
tax laws or the laws or regulations of any other taxing authority,
including any foreign taxing authority, now or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon
receipt of a Written Instructions and not otherwise, the Custodian
shall:
1.) Execute and deliver to such persons as may be
designated in such Written Instructions proxies, consents,
authorizations, and any other instruments whereby the authority of
the Trust as beneficial owner of any Securities may be exercised;
2.) Deliver any Securities in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation,
or recapitalization of any corporation, or the exercise of any
conversion privilege;
3.) Deliver any Securities to any protective
committee, reorganization committee, or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization, or sale of assets of any corporation, and receive
and hold under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the assets
of any Fund and take such other steps as shall be stated in the
Written Instructions to be for the purpose of effectuating any
duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Trust;
and
5.) Deliver any Securities held for any Fund to
the depository agent for tender or other similar offers.
V. F. Custodian to Deliver Proxy Materials. The Custodian
shall promptly deliver to the Trust all notices, proxy material
and executed but unvoted proxies pertaining to shareholder meetings
of Securities held by any Fund. The Custodian shall not vote or
authorize the voting of any Securities or give any consent, waiver
or approval with respect thereto unless so directed by Written
Instructions.
V. G. Custodian to Deliver Tender Offer Information. The
Custodian shall promptly deliver to the Trust all information
received by the Custodian and pertaining to Securities held by
any Fund with respect to tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described
in the Mutual Fund Custody Model attached as Appendix D. If the
Trust desires to take action with respect to any tender offer,
exchange offer or other similar transaction, the Trust shall
notify the Custodian at least five Business Days prior to the
date on which the Custodian is to take such action. The Trust
will provide or cause to be provided to the Custodian all relevant
information for any Security which has unique put/option provisions
at least five Business Days prior to the beginning date of the
tender period.
V. H. Custodian to Deliver Security and Transaction
Information. On each Business Day that the Federal Reserve Bank is
open, the Custodian shall furnish the Trust with a detailed statement
of monies held for the Fund under this Agreement and with
confirmations and a summary of all transfers to or from the account
of the Fund. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities
held for the Fund under this Agreement. Where Securities are
transferred to the account of the Fund without physical delivery,
the Custodian shall also identify as belonging to the Fund a quantity
of Securities in a fungible bulk of Securities registered in the name
of the Custodian (or its nominee) or shown on the Custodian's account
on the books of the Book-Entry System or the Depository. With respect
to information provided by this section, it shall not be necessary for
the Custodian to provide notice as described by Article XI Section F.
Notices to Trust; it shall be sufficient to communicate by such means
as shall be mutually agreeable to the Trust and the Custodian.
ARTICLE VI
Purchase and Sale of Securities
VI. A. Purchase of Securities. Promptly after each purchase
of Securities by the Trust, the Trust shall deliver to the Custodian
(i) with respect to each purchase of Securities which are not Money
Market Securities, Written Instructions, and (ii) with respect to each
purchase of Money Market Securities, Proper Instructions, specifying
with respect to each such purchase the;
1.) name of the issuer and the title of the Securities
2.) the number of shares, principal amount purchased (and accrued
interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through which, the
purchase was made,
7.) the name of the person to whom such amount is payable, and
8.) the Fund for which the purchase was made
The Custodian shall, against receipt of Securities purchased by or for
the Trust, pay out of the moneys held for the account of such Fund the
total amount specified in the Written Instructions, or Oral Instructions,
if applicable, to the person named therein. The Custodian shall not be
under any obligation to pay out moneys to cover the cost of a purchase
of Securities for a Fund, if in the relevant Fund custody account there
is insufficient cash available to the Fund for which such purchase was
made. With respect to any repurchase agreement transaction for the
Funds, the Custodian shall assure that the collateral reflected on the
transaction advice is received by the Custodian.
VI. B. Sale of Securities. Promptly after each sale of
Securities by a Fund, the Trust shall deliver to the Custodian (i) with
respect to each sale of Securities which are not Money Market Securities,
Written Instructions, and (ii) with respect to each sale of Money Market
Securities, Proper Instructions, specifying with respect to each such
sale the:
1.) name of the issuer and the title of the Securities
2.) number of shares, principal amount sold (and accrued interest, if
any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which, the sale was
made,
7.) name of the person to whom such Securities are to be delivered, and
8.) Fund for which the sale was made
The Custodian shall deliver the Securities against receipt of the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable.
VI. C. Delivery Versus Payment for Purchases and Sales.
Purchases and sales of Securities effected by the Custodian will be
made on a delivery versus payment basis. The Custodian may, in its
sole discretion, upon receipt of Written Instructions, elect to settle
a purchase or sale transaction in some other manner, but only upon receipt of
acceptable indemnification from the Fund.
VI. D. Payment on Settlement Date. On contractual settlement date,
the account of the Fund will be charged for all purchased Securities
settling on that day, regardless of whether or not delivery is made.
Likewise, on contractual settlement date, proceeds from the sale of
Securities settling that day will be credited to the account of the Fund,
irrespective of delivery. Exceptions to contractual settlement on
purchases and sales, that will continue to settle delivery versus payment,
include real estate, venture capital, international trades, open-ended
mutual funds, non standard depository settlements and in-kind trades.
VI. E. Segregated Accounts. The Custodian shall, upon receipt
of Proper Instructions so directing it, establish and maintain a segregated
account or accounts for and on behalf of a Fund. Cash and/or Securities may
be transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among
the Trust, the Custodian, and a broker-dealer registered under the 1934 Act,
and also a member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange, the Commodity Futures Trading Commission, any registered contract
market, or any similar organization or organizations requiring escrow or
other similar arrangements in connection with transactions by the Fund;
2.) for purposes of segregating cash or Securities in
connection with options purchased, sold, or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund;
3.) for the purpose of compliance by the Fund with the
procedures required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, short sales, or any other
securities by Act Release No. 10666, or any subsequent release or
releases or rule of the SEC relating to the maintenance of segregated
accounts by registered investment companies;
4.) for the purpose of segregating collateral for loans
of Securities made by the Fund; and
5.) for other proper corporate purposes, but only upon
receipt of, in addition to Proper Instructions, a copy of a resolution of
the Board of Directors, certified by an Officer, setting forth the purposes
of such segregated account.
Each segregated account established hereunder shall be established
and maintained for a single Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund involved.
VI. F. Advances for Settlement. Except as otherwise may be
agreed upon by the parties hereto, the Custodian shall not be required
to comply with any Written Instructions to settle the purchase of any
Securities on behalf of a Fund unless there is sufficient cash in the
account(s) pertaining to such Fund at the time or to settle the sale of
any Securities from such an account(s) unless such Securities are in
deliverable form. Notwithstanding the foregoing, if the purchase price
of such Securities exceeds the amount of cash in the account(s) at the
time of such purchase, the Custodian may, in its sole discretion, advance
the amount of the difference in order to settle the purchase of such
Securities. The amount of any such advance shall be deemed a loan from
the Custodian to the Trust payable on demand and bearing interest accruing
from the date such loan is made up to but not including the date such loan
is repaid at the rate per annum customarily charged by the Custodian on
similar loans.
ARTICLE VII
Trust Indebtedness
VII. A. Borrowings. In connection with any borrowings by the Trust,
the Trust will cause to be delivered to the Custodian by a bank or broker
requiring Securities as collateral for such borrowings (including the
Custodian if the borrowing is from the Custodian), a notice or undertaking
in the form currently employed by such bank or broker setting forth the
amount of collateral. The Trust shall promptly deliver to the Custodian
Written Instructions specifying with respect to each such borrowing:
(a) the name of the bank or broker, (b) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an attached
promissory note duly endorsed by the Trust, or a loan 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 Trust on the borrowing date, and (f) the description of the
Securities securing the loan, including the name of the issuer, the title
and the number of shares or other units or the principal amount. The
Custodian shall deliver on the borrowing date specified in the Written
Instructions the required collateral against the lender's delivery of the
total loan amount then payable, provided that the same conforms to that
which is described in the Written Instructions. The Custodian shall
deliver, in the manner directed by the Trust, such Securities as additional
collateral, as may be specified in Written Instructions, to secure further
any transaction described in this Article VII. The 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. The Custodian may, at the option
of the lender, keep such collateral in its possession, subject to all rights
therein given to the lender because of the loan. The Custodian may require
such reasonable conditions regarding such collateral and its dealings with
third-party lenders as it may deem appropriate.
VII. B. Advances. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in
the Fund incurring an overdraft at the end of any Business Day, such advance
shall be repayable immediately upon demand made by the Custodian at any time.
The Custodian may, in its sole discretion, charge interest accruing from the
date of such overdraft to but not including the date of such repayment at
the rate per annum customarily charged by the Custodian on similar overdrafts.
ARTICLE VIII
Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 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 negligence
or willful misconduct. The Trust, on behalf of the Fund and only from
assets of the Fund (or insurance purchased by the Trust with respect to
its liabilities on behalf of the Fund hereunder), shall defend, indemnify
and hold harmless the Custodian and its directors, 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
the Trust's duties hereunder or any other action or inaction of the Trust or
its Directors, officers, employees or agents, except such as may arise from
the negligent action, negligent omission, willful misconduct or any breach
of this Agreement by the Custodian, its directors, officers, employees or
agents.. The Custodian shall defend, indemnify and hold harmless the Trust
and its directors, 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 the Custodian's duties as specifically
set forth in this agreement with respect to the Fund hereunder or any other
action or inaction of the Custodian or its directors, officers, employees,
agents, nominees, or Sub-Custodians as to the Fund, except such as may arise
from the negligent action, omission or willful misconduct of the Trust, its
directors, 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 Trust at the expense of the 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 Trust, and shall be similarly protected with respect to
anything done or omitted by it in good faith in conformity with advice or
opinion of its counsel, unless counsel to the 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 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
the Trust, on behalf of the Fund, of principal and of interest to the date
of recovery on Securities incorrectly omitted from the Fund's account or
penalties imposed on the Trust, in connection with the Fund, 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
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 provisions of this section
VIII. A. shall survive the termination of this Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the
generality of the foregoing, the Custodian, acting in the capacity of
Custodian hereunder, shall be under no obligation to inquire into, and
shall not be liable for:
1.) The validity of the issue of any Securities purchased
by or for the account of any Fund, the legality of the purchase thereof,
or the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for
the account of any Fund, or the propriety of the amount for which the
same are sold;
3.) The legality of the issue or sale of any Shares of
any Fund, or the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any Shares of any
Fund, or the propriety of the amount to be paid therefor;
5.) The legality of the declaration or payment of any
dividend by the Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on behalf
of the Trust or any Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is in compliance with the
1940 Act, the regulations thereunder, the provisions of the Trust's
charter documents or by-laws, or its investment objectives and policies
as then in effect.
VIII. C. No Duty to Collect Amounts Due From Dividend and
Transfer Agent. The Custodian shall not be under any duty or obligation
to take action to effect collection of any amount due to the Trust from
any Dividend and Transfer Agent of the Trust nor to take any action to
effect payment or distribution by any Dividend and Transfer Agent of
the Trust of any amount paid by the Custodian to any Dividend and
Transfer Agent of the Trust in accordance with this Agreement.
VIII. D. No Enforcement Actions. Notwithstanding Section D of
Article V, the Custodian shall not be under any duty or obligation to
take action, by legal means or otherwise, 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
Written Instructions and (ii) it shall be assured to its satisfaction
(including prepayment thereof) of reimbursement of its costs and
expenses in connection with any such action.
VIII. E. Authority to Use Agents and Sub-Custodians. The Trust
acknowledges and hereby authorizes the Custodian to hold Securities
through its various agents described in Appendix C annexed hereto.
In addition, the Trust acknowledges that the Custodian may appoint
one or more financial institutions, as agent or agents or as sub-custodian
or sub-custodians, including, but not limited to, banking
institutions located in foreign countries, for the purpose of holding
Securities and moneys at any time owned by the Fund. The Custodian shall
not be relieved of any obligation or liability under this Agreement in
connection with the appointment or activities of such agents or
sub-custodians. Any such agent or sub-custodian shall be qualified to
serve as such for assets of investment companies registered under the
Act. The Funds shall reimburse the Custodian for all costs incurred
by the Custodian in connection with opening accounts with any such
agents or sub-custodians. Upon request, the Custodian shall promptly
forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist directors of registered
investment companies to fulfill their responsibilities under Rule 17f-5
of the Act.
VIII. F. No Duty to Supervise Investments. 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 Trust are
such as properly may be held by the Trust under the provisions of the
Declaration of Trust and the Trust's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat
all records and other information relating to the Trust and the assets
of all Funds as confidential and shall not disclose any such records or
information to any other person unless (i) the Trust shall have consented
thereto in writing or (ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled
to receive and the Trust agrees to pay to the Custodian, for the Fund's
account from the Fund's assets only, such compensation as shall be
determined pursuant to Appendix E attached hereto, or as shall be
determined pursuant to amendments to Appendix E as approved by the
Custodian and the Trust. The Custodian shall be entitled to charge
against any money held by it for the accounts of the 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 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 account of a Fund include, but are not limited to,
the expenses of agents or Sub-Custodians incurred in settling transactions
involving the purchase and sale of Securities of the Fund.
VIII. I. Reliance Upon Instructions. The Custodian shall be
entitled to rely upon any Proper Instructions if such reliance is made in
good faith. The Trust agrees to forward to the Custodian Written
Instructions 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 same Business Day on
which such Oral Instructions were given. The Trust agrees that the
failure of the Custodian to receive such confirming instructions shall
in no way affect the validity of the transactions or enforceability of
the transactions hereby authorized by the Trust. The Trust agrees that
the Custodian shall incur no liability to the Trust for acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions.
VIII. J. Books and Records. The Custodian will (i) 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 Fund under the Act, with particular
attention to Section 31 thereof and Rules 3la-1 and 3la-2 thereunder and
those records are the property of the Trust, and (ii) preserve for the
periods prescribed by applicable Federal statute or regulation all records
required to be so preserved. All such books and records shall be the
property of the Trust, and shall be available, upon request, for
inspection by duly authorized officers, employees or agents of the
Trust and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian
shall send to the Trust any report received on the systems of internal
accounting control of the Custodian, or its agents or sub-custodians,
as the Trust may reasonably request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian
performs only the services of a custodian and shall have no
responsibility for the management, investment or reinvestment of the
Securities or other assets from time to time owned by any Fund. The
Custodian is not a selling agent for Shares of any Fund and performance
of its duties as custodian shall not be deemed to be a recommendation
to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever
except such duties and obligations as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
VIII. M. Assistance to Trust. The Custodian shall take all
reasonable action, that the Trust may from time to time request, to
assist the Trust in obtaining favorable opinions from the Trust's
independent accountants, with respect to the Custodian's activities
hereunder, in connection with the preparation of the Fund's Form N- IA,
Form N-SAR, or other annual reports to the SEC.
ARTICLE IX
Termination
IX. A. Termination. Either party hereto may terminate this
Agreement for any reason by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than
ninety (90) days after the date of giving of such notice. If such notice
is given by the Trust, it shall be accompanied by a copy of a resolution of
the Board of Directors of the Trust, certified by the Secretary of the Trust,
electing to terminate this Agreement and designating a successor custodian
or custodians each of which shall be a bank or trust company having not less
than $100,000,000 aggregate capital, surplus, and undivided profits. In
the event such notice is given by the Custodian, the Trust shall, on or
before the termination date, deliver to the Custodian a copy of a resolution
of the Board of Directors of the Trust, certified by the Secretary,
designating a successor custodian or custodians to act on behalf of the
Trust. In the absence of such designation by the Trust, the Custodian may
designate a successor custodian which shall be a bank or trust company
having not less than $100,000,000 aggregate capital, surplus, and
undivided profits. Upon the date set forth in such notice this Agreement
shall terminate, and the Custodian, provided that it has received a notice
of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and monies then owned by
the Fund and held by it as Custodian. Upon termination of this Agreement,
the Trust shall pay to the Custodian on behalf of the Trust such compensation
as may be due as of the date of such termination. The Trust agrees on behalf
of the Trust that the Custodian shall be reimbursed for its reasonable costs
in connection with the termination of this Agreement.
IX. B. Failure to Designate Successor Custodian. If a successor
custodian is not designated by the Trust, or by the Custodian in accordance
with the preceding paragraph, or the designated successor cannot or will not
serve, the Trust shall, upon the delivery by the Custodian to the Trust of
all Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Trust) and moneys then owned by the Trust, be
deemed to be the custodian for the Trust, and the Custodian shall thereby
be relieved of all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the Book-Entry System,
which cannot be delivered to the Trust, which shall be held by the Custodian
in accordance with this Agreement.
ARTICLE X
Force Majeure
Neither the Custodian nor the Trust shall be liable for any failure
or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage;
strikes; epidemics; riots; labor disputes; acts of civil or military
authority; governmental actions; or inability to obtain labor, material,
equipment or transportation; provided, however, that the Custodian, in
the event of a failure or delay, shall use its best efforts to
ameliorate the effects of any such failure or delay.
ARTICLE XI
Miscellaneous
XI. A. Designation of Authorized Persons. Appendix A sets forth
the names and the signatures of all Authorized Persons as of this date,
as certified by the Secretary of the Trust. The Trust agrees to furnish
to the Custodian a new Appendix A in form similar to the attached
Appendix A, if any present Authorized Person ceases to be an Authorized
Person or if any other or additional Authorized Persons are elected or
appointed. Until such new Appendix A shall be received, the Custodian
shall be fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the then current Authorized
Persons as set forth in the last delivered Appendix A.
XI. B. Limitation of Personal Liability. No recourse under
any obligation of this Agreement or for any claim based thereon shall
be had against any organizer, shareholder, officer, trustee, past,
present or future as such, of the Trust or of any predecessor or
successor, either directly or through the Trust or any such predecessor
or successor, whether by virtue of any constitution, statute or rule of
law or equity, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this Agreement
and the obligations thereunder are enforceable solely against the assets
of the Trust, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the organizers, shareholders, officers,
or directors of the Trust or of any predecessor or successor, or any of
them as such, because of the obligations contained in this Agreement or
implied therefrom and that any and all such liability is hereby expressly
waived and released by the Custodian as a condition of, and as a
consideration for, the execution of this Agreement.
XI. C. Authorization By Board. The obligations set forth
in this Agreement as having been made by the Trust have been made by
the Board of Directors, acting as such Directors for and on behalf
of the Trust, pursuant to the authority vested in them under the
laws of the State of Ohio, the Articles of Incorporation and the
By-Laws of the Trust. This Agreement has been executed by Officers
of the Trust as officers, and not individually, and the obligations
contained herein are not binding upon any of the Directors, Officers,
agents or holders of shares, personally, but bind only the Trust
and then only to the extent of the assets of the Trust.
XI. D. Custodian's Consent to Use of Its Name. The Trust
shall obtain the Custodian's consent prior to the publication and/or
dissemination or distribution, of the Prospectus and any other
documents (including advertising material) specifically mentioning
the Custodian (other than merely by name and address).
XI. E. Notices to Custodian. Any notice or other
instrument in writing, authorized or required by this
Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered
to it at its offices at The Huntington National Bank, Easton
Business Service Center, 0 Xxxxxx Xxxx XX0X00, Xxxxxxxx,
Xxxx, 00000, attention Director Mutual Fund Custody, or at
such other place as the Custodian may from time to time
designate in writing.
XI. F. Notices to Trust. Any notice or other
instrument in writing, authorized or required by this Agreement
to be given to the Trust shall be sufficiently given when
delivered to the Trust or on the second Business Day following
the time such notice is deposited in the U.S. mail postage
prepaid and addressed to the Trust at its office 000 Xxxxxxx
Xxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 or at such other place as
the Trust may from time to time designate in writing.
XI. G. Amendments In Writing. This Agreement, with
the exception of the Appendices, may not be amended
or modified in any manner except by a written agreement
executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of
the Board of Directors of the Trust.
XI. H. Successors and Assigns. This Agreement shall
extend to and shall be binding upon the parties hereto,
and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust
or by the Custodian, and no attempted assignment by the Trust
or the Custodian shall be effective without the written
consent of the other party hereto.
XI. I. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Ohio.
XI. J. Jurisdiction. Any legal action, suit or
proceeding to be instituted by either party with respect to
this Agreement shall be brought by such party exclusively in
the courts of the State of Ohio or in the courts of the United
States for the Southern District of Ohio, and each party, by
its execution of this Agreement, irrevocably (i) submits to
such jurisdiction and (ii) consents to the service of any
process or pleadings by first class U.S. mail, postage prepaid
and return receipt requested, or by any other means from time
to time authorized by the laws of such jurisdiction.
XI. K. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together,
constitute only one instrument.
XI. L. Headings. The headings of paragraphs in
this Agreement are for convenience of reference only and
shall not affect the meaning or construction of any provision
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers,
thereunto duly authorized as of the day and year first above
written.
WITNESS: TRUST:
Forester Funds, Inc.
__________________________ By:_____________________________________
Title:_______________________________________
WITNESS: CUSTODIAN:
The Huntington National Bank
___________________________ By:_____________________________________
Title:_______________________________________
APPENDIX A
Authorized Persons Specimen Signatures
Chairman: __________________ __________________________________
President: _________________ __________________________________
Secretary: _________________ __________________________________
Treasurer: _________________ __________________________________
Senior Vice
President: __________________ __________________________________
Assistant
Secretary: _________________ _________________________________
Assistant
Treasurer: __________________ __________________________________
Adviser Employees:_________________ __________________________________
__________________ __________________________________
Transfer Agent/Fund Accountant
Employees: _______________ __________________________________
________________ __________________________________
________________ __________________________________
__________________ __________________________________
* Authority restricted; does not include: ______________________________
APPENDIX B
Series of the Trust
Forester Value Fund
APPENDIX C
Agents of the Custodian
The following agents are employed currently by The Huntington
National Bank for securities processing and control ...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cleveland Branch
Bank of New York
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(For Foreign Securities and certain non-DTC eligible Securities)
APPENDIX D
Mutual Fund Custody Model
Mutual Fund Custody Model document is attached.
APPENDIX E
Mutual Fund Custody Fees
Mutual Fund Custody Pricing document is attached.
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