EXHIBIT (g)
CUSTODY AGREEMENT
AGREEMENT dated as of April 1, 2002 between Legacy Funds Group (the "Mutual
Fund"), a Massachusetts business trust, on behalf of the investment portfolios
of Mutual Fund identified on Schedule A attached hereto (which may be amended
from time to time by attaching to Schedule A a revised list of portfolios, dated
and signed by an authorized representative of each party hereto) (individually,
a "Fund" and collectively, the "Funds"), and Comerica Bank (the "Custodian"), a
Michigan banking corporation and a wholly-owned subsidiary of Comerica
Incorporated, with its principal place of business at One Detroit Center, 000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx.
WITNESSETH:
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That for and in consideration of the mutual promises hereinafter set forth,
Mutual Fund and the Custodian agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Authorized Person" shall be deemed to include the Chairman of the
Board of Trustees, the President, and any Vice President, the
Secretary, the Treasurer or any other person, whether or not any such
person is an officer or employee of Mutual Fund, duly authorized by the
Board of Trustees of Mutual Fund to give Oral Instructions and Written
Instructions on behalf of a Fund and listed in the certification
annexed hereto as Appendix A or such other certification as may be
received by the Custodian from time to time.
(b) "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees.
(c) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Custodian, which is actually received by the Custodian and
signed on behalf of Mutual Fund by any two Authorized Persons or any
two officers thereof.
(d) "Declaration of Trust" shall mean the Agreement and Declaration of
Trust of Mutual Fund filed with the Commonwealth of Massachusetts on
November 5, 2001as now in effect and as the same may be amended from
time to time.
(e) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission
under Section 17(a) of the Securities Exchange Act of 1934, as amended,
its successor or successors; and its nominee or nominees, in which the
Custodian is hereby specifically authorized to make deposits. The term
"Depository" shall further mean and include any other person to be
named in a Certificate authorized to act as a depository under the 1940
Act, its successor or successors and its nominee or nominees.
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(f) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the Government of the United States or agencies or
instrumentalities thereof commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations,
where the purchase or sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale,
and repurchase and reverse repurchase agreements with respect to any of
the foregoing types of securities.
(g) "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person.
(h) "Prospectus" shall mean a Fund's current prospectus and statement
of additional information relating to the registration of the Fund's
Shares under the Securities Act of 1933, as amended.
(i) "Shares" refers to the shares of beneficial interest $.001 par
value per share of a Fund, as may be issued by the Fund from time to
time.
(j) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, options
and other securities, commodity interests and investments, including
currency, from time to time of a Fund, including futures contracts,
forward contracts and options on futures contracts and forward
contracts.
(k) "Transfer Agent" shall mean the person which performs as the
transfer agent, dividend disbursing agent and shareholder servicing
agent functions for Mutual Fund.
(l) "Written Instructions" shall mean a written communication actually
received by the Custodian signed by two Authorized Persons or from two
persons reasonably believed by the Custodian to be Authorized Persons
by telex or facsimile machine or any other such system whereby the
receiver of such communication is able to verify through codes or
otherwise with a reasonable degree of certainty the authenticity of the
sender of such communication; however, "Written Instructions" from
Mutual Fund's Administrator, BISYS Fund Services Limited Partnership,
to the Custodian shall mean an electronic communication transmitted by
fund accountants and their managers (who have been provided an access
code by the Administrator) and actually received by the Custodian.
(m) The "1940 Act" refers to the Investment Company Act of 1940, and
the rules and regulations thereunder, all as amended from time to time.
2. APPOINTMENT OF CUSTODIAN.
(a) Mutual Fund hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies at the time owned by or in
the possession of the Funds during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
(c) The Custodian understands and acknowledges that Mutual Fund intends
to issue Shares of separate series and classes, and may classify and
reclassify Shares of such
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series and Classes. The Custodian shall identify to each such series or
class the property belonging to such series or class and in such
reports, confirmations and notices to Mutual Fund called for under this
Agreement shall identify the series or class to which such report,
confirmation or notice pertains. In the event Mutual Fund establishes
one or more portfolios other than the Funds with respect to which
Mutual Fund wishes to retain the Custodian to act as custodian, Mutual
Fund shall so notify the Custodian in writing. If the Custodian is
willing to render such services, the Custodian shall notify Mutual Fund
in writing whereupon each such portfolio shall be deemed to be a Fund
hereunder.
3. COMPENSATION.
(a) Mutual Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule B and incorporated herein.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule B of this Agreement a revised Fee
Schedule, dated and signed by an Authorized Officer or authorized
representative of each party hereto.
(c) The Custodian will xxxx Mutual Fund as soon as practicable after
the end of each calendar month, and said xxxxxxxx will be detailed in
accordance with the Fee Schedule for Mutual Fund. Mutual Fund will
promptly pay to the Custodian the amount of such billing. The Custodian
may charge against any monies held on behalf of a Fund pursuant to this
Agreement such compensation and any expenses incurred by the Custodian
(and reimbursable by the Fund) in the performance of its duties
pursuant to this Agreement. The Custodian shall also be entitled to
charge against any money held on behalf of a Fund pursuant to this
Agreement such compensation and any expenses incurred with respect to
the Fund, including reasonable counsel fees, for which it shall be
entitled to reimbursement under the provisions of this Agreement.
The expenses which the Custodian may charge against such
account include, but are not limited to, the expenses of Sub-Custodians
and foreign branches of the Custodian incurred in settling transactions
outside of Detroit, Michigan or New York City, New York involving the
purchase and sale of Securities.
(d) Each Fund will use reasonable efforts to avoid cash overdrafts in
its account and will provide offsetting balances with respect to any
cash overdrafts that may occur from time to time.
4. CUSTODY OF CASH AND SECURITIES.
(a) RECEIPT AND HOLDING OF ASSETS.
Mutual Fund will deliver or cause to be delivered to the Custodian all
Securities and monies owned by the Funds, including cash received from
the issuance of Shares, at any time during the period of this
Agreement. The Custodian will not be responsible for such Securities
and monies until actually received by it. Mutual Fund shall instruct
the Custodian from time to time in its sole discretion, by means of
Written Instructions, or, in connection with the purchase or sale of
Money Market Securities, by means of Oral Instructions or Written
Instructions, as to the manner in which and in what amounts Securities
and monies are to be deposited on behalf of the Funds in the Book-Entry
System or a Depository and specifically allocated on the books of the
Custodian to the Funds; provided, however, that prior to the initial
deposit of Securities of the Funds in the
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Book-Entry System or a Depository, including a deposit in connection
with the settlement of a purchase or sale, the Custodian shall have
received a Certificate or Written Instructions specifically approving
such deposits by the Custodian in the Book-Entry System or a
Depository. Securities and monies of the Funds 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 which the Custodian acts in a
fiduciary or representative capacity.
(b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and
maintain a separate account for each Fund and shall credit to the
separate account all monies received by it for the account of the Fund
and shall disburse the same only:
1. In payment for Securities purchased for the Fund, as
provided in Section 5 hereof;
2. Pursuant to Written Instructions, for the payment of any
expense or liability incurred by the Fund, including but not
limited to the following payments for the account of the Fund:
interest, taxes, management, accounting, transfer agent and
legal fees and operating expenses of the Fund whether or not
such expenses are, in whole or in part, to be capitalized or
treated as deferred expenses;
3. In payment of dividends or distributions with respect to
the Shares of the Fund, as provided in Section 7 hereof;
4. In payment of original issue or other taxes with respect to
the Shares of the Fund, as provided in Section 8 hereof;
5. In payment for Shares which have been redeemed by the Fund,
as provided in Section 8 hereof;
6. Pursuant to Written Instructions, setting forth the name
and address of the Fund and the person to whom the payment is
to be made, the amount to be paid and the purpose for which
payment is to be made;
7. In payment of Custodian attributable to the Fund, as
provided in Section 3(a) and Section I I (h) hereof; or
8. To a sub-custodian pursuant to Section 11 (f) hereof.
(c) CONFIRMATION AND STATEMENTS. Promptly after the close of business
on each day, the Custodian shall furnish each Fund with confirmations
and a summary of all transfers to or from the account of the Fund
during said day. Where securities purchased by the Funds are in a
tangible bulk of securities registered in the name of the Custodian (or
its nominee) or shown on the Custodian's account on the books of a
Depository or the Book-Entry System the Custodian shall by book entry
or otherwise identify the quantity of those securities belonging to the
Funds. At least monthly, the Custodian shall furnish each Fund with a
detailed statement of the Securities and monies held for the Fund under
this Agreement. The Custodian shall also furnish Mutual Fund with such
periodic and special reports as Mutual Fund may reasonably request, and
such other information as may be agreed upon from time to time.
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(d) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All Securities
held for the Funds which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be
held by the Custodian in that form; all other Securities held for the
Fund may be registered in the name of the Fund, in the name of any duly
appointed registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry System or a
Depository or their successor or successors, or their nominee or
nominees. Mutual Fund reserves the right to instruct the Custodian as
to the method of registration and safekeeping of the Securities of the
Funds. Mutual Fund agrees to furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or
in the name of the Book-Entry System or a Depository, any Securities
which it may hold for the account of the Funds and which may from time
to time be registered in the name of the Funds. The Custodian shall
hold all such Securities specifically allocated to a Fund which are not
held in the Book-Entry System or a Depository in a separate account for
the Fund in the name of the Fund physically segregated at all times
from those of any other person or persons.
(e) SEGREGATED ACCOUNTS. Upon receipt of a Written Instruction the
Custodian will establish segregated accounts on behalf of the Funds to
hold liquid or other assets as it shall be directed by a Written
Instruction and shall increase or decrease the assets in such
segregated accounts only as it shall be directed by subsequent Written
Instruction.
(f) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES. Unless
otherwise instructed to the contrary by a Written Instruction, the
Custodian by itself, or through the use of the Book-Entry System or a
Depository with respect to Securities therein deposited, shall with
respect to all Securities held for the Funds in accordance with this
Agreement:
1. Collect a income due or payable;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired,
or otherwise become payable. Notwithstanding the foregoing,
the Custodian shall have no responsibility to a Fund for
monitoring or ascertaining any call, redemption or retirement
dates with respect to put bonds which are owned by a Fund and
held by the Custodian or its nominees. Nor shall the Custodian
have any responsibility or liability to a Fund for any loss by
a Fund for any missed payment or other defaults resulting
therefrom. The Custodian shall not be responsible and assumes
no liability to a Fund for the accuracy or completeness of any
notification the Custodian may furnish to a Fund with respect
to put bonds;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect;
5. Hold directly. or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for
the account of the Funds all rights and similar Securities
issued with respect to any Securities held by the Custodian
hereunder for the Funds,
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6. Transmit promptly to Mutual Fund any proxy statement, proxy
materials, notice of a call or conversion or similar
communication received by it as Custodian; and
7. Receive and hold for the account of each Fund all
securities received as a distribution on the Fund's portfolio
of securities as a result of a stock dividend, share split-up
or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities
issued with respect to any portfolio securities belonging to
the Fund.
(g) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon receipt of
Written Instructions and not otherwise, except for subparagraphs 5, 6,
and 7 of this Section 4(g) which may be effected by Oral or Written
Instructions, the Custodian, directly or through the use of the
Book-Entry System or a Depository, shall:
1. Execute and deliver or cause to be executed and delivered
to such persons as may be designated in such Written
Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of a Fund as owner of any
Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for a
Fund 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 or cause to be delivered any Securities held for a
Fund to any protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation or recapitalization or sale
of assets of any corporation, and receive and hold under the
terms of this Agreement in the separate account for the Fund
certificates of deposit, interim receipts or other instruments
or documents as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of a
Fund and take such other steps as shall be stated in Written
Instructions to be for the purpose of effecting any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
5. Deliver Securities owned by a Fund upon sale of such
Securities for the account of the Fund pursuant to Section 5;
6. Deliver Securities owned by a Fund upon the receipt of
payment in connection with any repurchase agreement related to
such Securities entered into by the Fund;
7. Deliver Securities owned by a Fund to the issuer thereof,
or its agent, for transfer into the name of the Fund or into
the name of any nominee or nominees of the Custodian into the
name or nominee name of any sub-custodian appointed pursuant
to Section 11(f); or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or amber of units;
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provided, however, that in any such case, the new
Securities are to be delivered to the Custodian;
8. Deliver Securities owned by a Fund to the broker for
examination in accordance with "street delivery" custom;
9. Deliver Securities owned by a Fund in accordance with the
provisions of any agreement among the Fund, the Custodian and
any broker-dealer or any similar organization or organizations
relating to compliance with the rules of any options clearing
entity or securities or commodities exchange, regarding escrow
or other arrangements in connection with transactions by the
Fund;
10. Deliver Securities owned by a Fund in accordance with the
provisions of any agreement among the Fund, the Custodian, and
a futures commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract
Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Fund;
11. Deliver Securities owned by a Fund for delivery in
connection with any loans of securities made by the Fund but
only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund which may be
in the form of cash or obligations issued by the United States
government, its agencies or instrumentalities;
12. Deliver Securities owned by a Fund for delivery as
security in connection with any borrowings by the Fund
requiring a pledge of Fund assets, but only against receipt of
amounts borrowed;
13. Deliver Securities owned by a Fund upon receipt of Written
Instructions from the Fund for delivery to the Transfer Agent
or to the holders of Shares in connection with distributions
in kind, as may be described from time to time in the Fund's
Prospectus, in satisfaction of requests by holders of Shares
for repurchase or redemption;
14. Deliver Securities as collateral in connection with short
sales of securities by a Fund;
15. Deliver Securities for any purpose expressly permitted by
and in accordance with procedures described in a Fund's
Prospectus or resolution adopted by its Board of Trustees
signed by an Authorized Person and certified by the Secretary
of Mutual Fund; and
16. Deliver Securities owned by a Fund for any other proper
business purpose, but only upon receipt of, in addition to
Written Instructions, a certified copy of a resolution of the
Board of Trustees signed by an Authorized Person and certified
by the Secretary of Mutual Fund, specifying the Securities to
be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper
business purpose, and naming the person or persons to whom
delivery of such Securities shall be made.
(h) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money
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received by the Custodian for the account of a Fund; provided, however,
that the Custodian shall not be liable pursuant to this Agreement for
any money, whether or not represented by check, draft, or other
instrument for the payment of money, received by it on behalf of the
Fund until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing the
Fund's interest in the Book-Entry System or the Depository.
5. PURCHASE AND SALE OF INVESTMENTS OF A FUND.
(a) Promptly after each purchase of Securities for a Fund, the Fund
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,
either Written Instructions or Oral Instructions, in either case
specifying with respect to each purchase: (1) the name of the issuer
and the title of the Securities; (2) the number of shares or the
principal amount purchased and accrued interest, if any; (3) the date
of purchase and settlement; (4) the purchase price per unit; (5) the
total amount payable upon such purchase; (6) the name of the person
from whom or the broker through whom the purchase was made. if any; (7)
whether or not such purchase is to be settled through the Book-Entry
System or a Depository; and (8) whether the Securities purchased are to
be deposited in the Book-Entry System or a Depository. The Custodian
shall receive the Securities purchased by or for the Fund and upon
receipt of Securities or, as appropriate, a copy of the broker's or
dealer's confirmation or payee's invoice, shall pay out of the monies
held for the account of the Fund the total amount payable upon such
purchase, provided that the same conforms to the total amount payable
as set forth in such Written or Oral Instructions.
(b) Promptly after each sale of Securities of a Fund, the Fund 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, either Written
Instructions or Oral Instructions, in either case specifying with
respect to such sale: (1) the name of the issuer and the title of the
Securities; (2) the number of shares or principal amount sold, and
accrued interest, if any; (3) the date of sale; (4) the sale price per
unit; (5) the total amount payable to the Fund upon such sale; (6) the
name of the broker through whom or the person to whom the sale was
made; and (7) whether or not such sale is to be settled through the
Book-Entry System or a Depository. The Custodian shall deliver or cause
to be delivered the Securities to the broker or other person designated
by the Fund UPON RECEIPT OF THE TOTAL AMOUNT PAYABLE to the Fund upon
such sale, provided that the same conforms to the total amount payable
to the Fund as set forth in such Written or Oral Instructions. Subject
to the foregoing, the Custodian may accept payment in such form as
shall be satisfactory to it, and is customary among dealers in
Securities, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
6. LENDING OF SECURITIES.
(a) If Mutual Fund is permitted by the terms of its Declaration of
Trust and, as disclosed in its Prospectus, to lend Securities, within
24 hours after each loan of Securities, a Fund shall deliver to the
Custodian Written Instructions specifying with respect to each such
loan: (i) the name of the issuer and the title of the Securities; (ii)
the number of shares or the principal amount loaned; (iii) the date of
loan and delivery; (iv) the total amount to be delivered to the
Custodian and specifically allocated against the loan of the
Securities, including the amount of cash collateral and the premium, if
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any, separately identified; (v) the name of the broker, dealer or
financial institution to which the loan was made; and (vi) whether the
Securities loaned are to be delivered through the Book-Entry System or
a Depository.
(b) Promptly after each termination of a loan of Securities, a Fund
shall deliver to the Custodian Written Instructions specifying with
respect to each such loan termination and return of Securities: (i) the
name of the issuer and the title of the Securities to be returned; (ii)
the number of shares or the principal amount to be returned; (iii) the
date of termination; (iv) the total amount to be delivered by the
Custodian (including the cash collateral for such Securities minus any
offsetting credits as described in said Written Instructions); (v) the
name of the broker, dealer or financial institution from which the
Securities will be returned; and (vi) whether such return is to be
effected through the Book-Entry System or a Depository. The Custodian
shall receive all Securities returned from the broker, dealer or
financial institution to which such Securities were loaned and upon
receipt thereof shall pay the total amount payable upon such return of
Securities as set forth in the Written Instructions. Securities
returned to the Custodian shall be held as they were prior to such
loan.
7. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS.
(a) Mutual Fund shall furnish to the Custodian Written Instructions (i)
authorizing the declaration of dividends or distributions with respect
to a Fund on a specified periodic basis and specifying the date of the
declaration of such dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment
shall be determined, and the total amount payable to the Transfer Agent
on the payment date, or (ii) setting forth the date of declaration of
any distribution by the Fund, the date of payment thereof, the record
date as of which shareholders entitled to payment shall be determined,
and the total amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such Written Instructions, the
Custodian shall pay to the Transfer Agent out of monies specifically
allocated to and held for the account of a Fund the total amount
payable to the Transfer Agent. In lieu of paying the Transfer Agent
cash dividends and distributions, the Custodian may arrange for the
direct payment of cash dividends and distributions to Shareholders by
the Custodian in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among Mutual Fund, the
Custodian and the Transfer Agent.
8. SALE AND REDEMPTION OF SHARES OF MUTUAL FUND.
(a) Whenever a Fund shall sell any Shares, the Fund shall deliver or
cause to be delivered to the Custodian Written Instructions duly
specifying:
1. The number of Shares sold, trade date, and price; and
2. The amount of money to be received by the Custodian
for the sale of such Shares.
The Custodian understands and agrees that Written Instructions
may be furnished subsequent to the purchase of Shares of the Fund and
that the information contained therein will be derived from the sales
of Shares as reported to the Fund by the Transfer Agent.
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(b) Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account of the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 8, the Custodian shall pay all original
issue or other taxes required to be paid in connection with such
issuance upon the receipt of Written Instructions specifying the amount
to be paid.
(d) Except as provided hereafter, whenever any Shares are redeemed, the
Fund shall cause the Transfer Agent to promptly furnish to the
Custodian Written Instructions, specifying:
1. The number of Shares redeemed; and
2. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information
contained in such Written Instructions will be derived from the
redemption of Shares as reported to the Fund by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the
number of Shares received by the Transfer Agent for redemption and that
such Shares are valid and in good form for redemption, the Custodian
shall make payment to the Transfer Agent of the total amount specified
in Written Instructions issued pursuant to paragraph (d) of this
Section 8. In lieu of paying the Transfer Agent said redemption
proceeds as stated, the Custodian may arrange for the direct payment of
said proceeds to Shareholders by the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
by and among Mutual Fund, the Custodian and the Transfer Agent.
(f) Notwithstanding the above provisions regarding the redemption of
Shares, whenever such Shares are redeemed pursuant to any check
redemption privilege which may from time to time be offered by the
Fund, the Custodian, unless otherwise instructed by Written
Instructions, shall honor the check presented as part of such check
redemption privilege out of the monies specifically allocated to the
Fund in such advice for such purpose.
9. INDEBTEDNESS.
(a) Mutual Fund will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which a Fund borrows money, a notice or
undertaking in the form currently employed by any such bank setting
forth the amount which such bank will loan to the Fund and the amount
of collateral, if any, required for such loan. Mutual Fund shall
promptly deliver to the Custodian Written Instructions stating with
respect to each such borrowing: (i) the name of the bank; (ii) the
amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed
by the Fund, or other loan agreement or evidence of indebtedness; (iii)
the time and date, if known, on which the loan is to be entered into
(the "Borrowing Date"); (iv) the date on which the loan becomes due and
payable; (v) the total amount payable to the Fund on the Borrowing
Date; (vi) the market value of Securities, if any, to be delivered as
collateral for such loan, including the name of the issuer, the title
and the number of shares or the principal or other amount of any
particular Securities; (vii) whether the Custodian is to deliver such
collateral through the Book-Entry System or a
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Depository; and (viii) a statement that such loan is in conformance
with the 1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Written Instructions referred to in
subparagraph (a) above, the Custodian shall deliver on the Borrowing
Date the specified collateral (if any) against delivery by the lending
bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Written
Instructions. The Custodian may, at the option of the lending bank
(unless the lending bank has not been appointed a custodian or
sub-custodian of the Funds assets, in which case the Custodian must),
keep any such collateral in its possession, but such collateral shall
be subject to all rights therein given the lending bank by virtue of
any promissory note or loan agreement. The Custodian shall deliver as
additional collateral in the same manner as directed by the Fund from
time to time such Securities specifically allocated to such Fund as may
be specified in Written Instructions to collateralize further any
transaction described in this Section 9. The Fund 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 Mutual
Fund fails to specify in Written Instructions all of the information
required by this Section 9, the Custodian shall not be under any
obligation to deliver any Securities. Collateral returned to the
Custodian shall be held hereunder as it was prior to being used as
collateral.
10. PERSONS HAVING ACCESS TO ASSETS OF THE FUND.
(a) No Trustee, officer, employee or agent of Mutual Fund, and no
officer, director, employee or agent of a Fund's investment advisors,
or any sub-investment advisor of a Fund, or of a Fund's administrator,
shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of
the Fund, nor shall the Custodian deliver any assets of the Fund to any
such person. No officer, director, employee or agent of the Custodian
who holds any similar position with a Fund's investment advisors, with
any sub-investment advisor of a Fund or with a Fund's administrator
shall have access to the assets of the Fund.
(b) The individual employees of the Custodian duly authorized by the
Board of Directors of the Custodian to have physical access to the
assets of the Funds are listed in the certification annexed hereto as
Appendix A. The Custodian shall advise the Funds of any change in the
individuals authorized to have access to the assets of the Fund by
written notice to the Fund accompanied by a certified copy of the
authorizing resolution of the Custodian's Board of Directors approving
such change.
(c) Nothing in this Section 10 shall prohibit any duly authorized
officer, employee or agent of Mutual Fund, or any duly authorized
officer, director, employee or agent of the investment advisors, of any
sub-investment advisor of the Funds or of the Funds' administrator,
from giving Oral Instructions or Written Instructions to the Custodian
or executing a Certificate so long as it does not result in delivery of
or access to assets of a Fund prohibited by paragraph (a) of this
Section 10.
11. CONCERNING THE CUSTODIAN.
(a) STANDARD OF CONDUCT. In the performance of its duties hereunder,
the Custodian shall be obligated to exercise care and diligence and to
act in good faith and to use its best, efforts within reasonable limits
to insure the accuracy and completeness of all services under this
Agreement. Except as otherwise provided herein, neither the Custodian
nor its nominee shall be liable for any loss or damage, including
counsel fees,
28
resulting from its action or omission to act or otherwise, except for
any such loss or damage arising out of its negligence, misfeasance or
willful misconduct or that of its employees or agents. The Custodian
may, with respect to questions of law, apply for and obtain the advice
and opinion of counsel to Mutual Fund or of its own counsel, at the
expense of Mutual 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. The Custodian shall not be liable to the Funds for
any loss or damage resulting from the use of the Book-Entry System or a
Depository arising by reason of any negligence, misfeasance or willful
misconduct on the part of the Custodian or any of its employees or
agents.
(b) LIMIT OF DUTIES. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by
the Funds, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
2. The legality of the sale of any Securities by the Funds or
the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of any Fund; or
6. The legality of any borrowing.
(c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable for,
or considered the Custodian of, any money, whether or not represented
by any check, draft, or instrument for the payment of money, received
by it on behalf of a Fund until the Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Fund's interest in the Book-Entry System or a
Depository.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount due to the Funds from Transfer Agent nor to take any action to
effect payment or distribution by the Transfer Agent of any amount paid
by the Custodian to the Transfer Agent in accordance with this
Agreement.
(e) COLLECTION WHERE PAYMENT REFUSED. 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 of
reimbursement of its costs and expenses in connection with any such
action. The Custodian shall give the Funds prompt notice of each such
event.
(f) APPOINTMENT OF SUB-CUSTODIANS. In connection with its duties under
this Agreement, the Custodian may enter into sub-custodian agreements
with other domestic banks or trust companies for the receipt of certain
securities and cash to be held by the
29
Custodian for the accounts of the Funds pursuant to this Agreement;
provided that each such bank or trust company complies with all
relevant provisions of the 1940 Act, applicable state securities laws
and the rules and regulations thereunder. The Custodian shall remain
responsible for the performance of all of its duties under this
Agreement and shall hold Mutual Fund harmless from the acts and
omissions, under the standards of care provided for herein, of any
domestic bank or trust company that it might choose pursuant to this
Section.
(g) NO DUTY TO ASCERTAIN AUTHORITY. 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 Fund are such as may properly be
held by the Fund under the provisions of the Declaration of Trust and
the Prospectus.
(h) RELIANCE ON CERTIFICATES AND INSTRUCTIONS. 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 genuine and to be signed by two officers of Mutual Fund
or Authorized Persons. The Custodian shall be entitled to rely upon any
Written or Oral Instructions actually received by the Custodian
pursuant to the applicable Sections of this Agreement and reasonably
believed by the Custodian to be genuine and to be given by an
Authorized Person in the case of Oral Instructions or two Authorized
Persons in the case of Written Instructions. Mutual Fund agrees to
forward to the Custodian Written Instructions from two Authorized
Persons confirming such Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business on the same day
that such Oral Instructions are given to the Custodian. Mutual 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
Mutual Fund. Mutual Fund agrees that the Custodian shall incur no
liability to Mutual Fund in acting upon Oral Instructions given to the
Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from a duly
Authorized Person.
(i) BOOKS AND RECORDS. The books and records pertaining to Mutual Fund
which are now or hereafter in the possession of the Custodian shall be
the property of Mutual Fund. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable
securities laws and regulations and shall, to the extent practicable,
be maintained separately for each Fund of Mutual Fund. Mutual Fund,
Mutual Fund's authorized representatives and auditors shall have access
to such books and records at all times during the Custodian's normal
business hours. Upon the reasonable request of Mutual Fund, copies of
any such books and records shall be provided by the Custodian to Mutual
Fund or Mutual Fund's authorized representatives at Mutual Fund's
expense.
The Custodian shall provide Mutual Fund with any report
obtained by the Custodian on the system of internal accounting control
of the Book-Entry System or a Depository and with such reports on its
own systems of internal accounting control in accordance with the
requirements of the 1940 Act and as Mutual Fund may reasonably request
from time to time.
(j) COOPERATION WITH ACCOUNTANTS. The Custodian shall cooperate with
Mutual Fund's independent public accountants and shall take all
reasonable action in the performance of its obligations under this
Agreement to assure that the necessary
30
information is made available to such accountants for the expression of
their opinions, as such may be required from time to time by Mutual
Fund.
(k) COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Custodian
shall comply with all applicable requirements of the federal securities
and commodities laws, and any other laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties
to be performed by the Custodian hereunder. Except as specifically set
forth herein, the Custodian assumes no responsibility for such
compliance by Mutual Fund.
12. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in affect thereafter
until terminated pursuant to paragraph (b) of this Section 12.
(b) Either of the parties hereto may terminate this Agreement at any
time by giving to the other party a notice in writing specifying the
date of such termination, which shall be not less than 60 days after
the date of receipt of such notice. In the event such notice is given
by Mutual Fund, it shall be accompanied by a certified resolution of
the Board of Trustees of Mutual Fund, electing to terminate this
Agreement and designating a successor custodian or custodians, which
shall be a person qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, Mutual
Fund shall, on or before the termination date, deliver to the Custodian
a certified resolution of the Board of Trustees of Mutual Fund;
designating a successor custodian or custodians. In the absence of such
designation by Mutual Fund, the Custodian may designate a successor
custodian, which shall be a person qualified to so act under the 1940
Act. If Mutual Fund fails to designate a successor custodian, Mutual
Fund shall upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities
(other than Securities held in the Book-Entry System and other
securities held in uncertificated form which cannot be delivered to
Mutual Fund) and monies then owned by Mutual Fund, be deemed to be its
own custodian 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 and other
uncertificated securities which cannot be delivered to Mutual Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian deliver directly to the successor
custodian on that date all Securities and monies then held by the
Custodian on behalf of Mutual Fund, after deducting all fees, expenses
and other amounts the payment or reimbursement of which it shall then
be entitled.
13. MISCELLANEOUS.
(a) Annexed hereto as Appendix A is a certification signed by two of
the present officers of Mutual Fund setting forth the names and the
signatures of the present Authorized Persons. Mutual Fund agrees to
furnish to the Custodian a new certification in similar form in the
event that any such present Authorized Person ceases to be such an
Authorized Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new certification shall be
received, the Custodian shall
31
be fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized Persons
as set forth in the last delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the
present officers of Mutual Fund setting forth the names and the
signatures of the three present officers of Mutual Fund. Mutual Fund
agrees to furnish to the Custodian a new certification in similar form
in the event any such present officer ceases to be an officer of Mutual
Fund or in the event that other or additional officers are elected or
appointed. Until such new certification shall be received, the
Custodian shall be fully protected in acting under the provisions of
this Agreement upon the signature of the officers as set forth in the
last delivered certification.
(c) 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 000 Xxxx Xxxxxxxxx, XxxxxxXxxxx, Mail Code 3462,
Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxx X. Xxxxxxxx, or at such other
place as the Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to Mutual Fund, shall be sufficiently
given if addressed to Mutual Fund and mailed or delivered to 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 along with a copy to First Financial
Capital Advisors LLC, 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, Attn:
Xxxxxx Xxxxx or to such other place as Mutual Fund may from time to
time designate in writing.
(e) This Agreement 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, (i) authorized and approved by a resolution of the
Board of Trustees of Mutual Fund, including a majority of the members
of the Board of Trustees of Mutual Fund who are not "interested
persons" of Mutual Fund as defined in the 1940 Act), or (ii) authorized
and approved by such other procedures as may be permitted or required
by the 1940 Act.
(f) 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 Mutual Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of Mutual Fund authorized or approved by a
resolution of the Board of Trustees of Mutual Fund, and any attempted
assignment without such written consent shall be null and void.
(g) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts.
(h) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(i) 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.
(j) It is expressly agreed that the obligations of Mutual Fund
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or
32
employees of Mutual Fund personally, but shall bind only the trust
property of Mutual Fund. The execution and delivery of this Agreement
have been authorized by the Trustees, and this Agreement has been
signed and delivered by an authorized officer of Mutual Fund, acting as
such, and neither such authorization by the Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on them personally, but
shall bind only the trust property of Mutual Fund as provided in Mutual
Fund's Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective representatives duly authorized as
of the day and year first above written.
LEGACY FUNDS GROUP
By:
--------------------------------------
Name:
Title:
COMERICA BANK
By:
--------------------------------------
Name:
Title:
33
Schedule A
List of Funds
The Multi-Cap Core Equity Fund
The Core Bond Fund
The Money Market Fund
34
Schedule B
Fee Schedule
The custody fee for each Fund as listed in Schedule A is 0.075% (0.75 basis
points) on average net assets up to 1 billion dollars ($1,000,000,000) and
0.050% (0.50 basis points) on average net assets over 1 billion dollars
($1,000,000,000), subject to a minimum annual fee of ten thousand dollars
($10,000) per Fund.
35
Appendix A
Certification of Authorization
I, ____________________________________________, Secretary of Mutual
Fund, a Massachusetts business trust, do hereby certify that:
The individuals listed in Exhibit A attached hereto have been duly
authorized as Authorized Person to give Oral Instructions and Written
Instruction on behalf of the Mutual Fund and the signatures set forth opposite
their respective names are true and correct signatures.
Appendix B
Certificate of Incumbency
36
