CUSTODY AGREEMENT
This
Agreement is made as of the 15th day of
May, 2008, entered into by and among U.S. Bank National
Association, a national banking association (the "Custodian"), Matrix Fund Services, (the
"Transfer Agent") and Capital Management Investment Trust
(the "Fund").
WHEREAS,
the Custodian has agreed to act and shall serve as custodian of record for
certain accounts established by account clients ("Clients") including but not
limited to, Traditional IRAs, Xxxx IRAs, SEP-IRAs, SIMPLE IRAs, Section 457
plans, Section 403(b) plan accounts and Xxxxxxxxx ESAs ("Accounts");
and
WHEREAS,
the Accounts shall hold shares of certain mutual funds listed in Exhibit
A hereto and owned and operated by the Fund, as may be amended from time
to time upon written notice to the Custodian; and
WHEREAS,
the Transfer Agent has agreed to provide for the Accounts, and is in the
business of providing, certain retirement plan accounting and administration
services as agent for the Custodian; and
WHEREAS,
the Transfer Agent has agreed to provide, and is in the business of providing,
certain shareholder services on behalf of the Fund; and
IN
CONSIDERATION OF THE AGREEMENTS CONTAINED HEREIN, and for other good and
valuable consideration hereby acknowledged by the Custodian, Transfer Agent and
the Fund,
NOW,
THEREFORE, in order to clarify the respective duties, the Fund, the Custodian
and the Transfer Agent agree as follows:
I. Duties
and Responsibilities of Custodian:
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A.
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Custodian
shall act as custodian of record for the
Accounts.
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B.
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Custodian
hereby appoints Transfer Agent, and Transfer Agent accepts such
appointment, to take sole responsibility to perform the functions with
regard to the Accounts as set forth in Article II, A.
below.
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II. Duties
and Responsibilities of Transfer Agent:
A. Transfer
Agent accepts appointment by Custodian to take sole responsibility to perform
the following functions with regard to the Accounts:
1.
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Draft,
maintain and update all documents necessary or relevant to establishing
and maintaining Accounts in compliance with applicable law, including but
not limited to Account applications, custodial agreements, rollover forms
and certifications, beneficiary designation forms and state and federal
tax forms.
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2.
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Receive,
process, maintain and update all Account applications, custodial
agreements, beneficiary designation forms, federal and state tax forms and
all other relevant documents for each Account as necessary to satisfy all
applicable legal or reasonable administrative
requirements.
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3.
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Execute
as agent on behalf of Custodian, all Account documents under whose terms
the Custodian undertakes custodial
responsibilities.
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4.
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Maintain
each Client's records pertinent to each Account, including but not limited
to the Client's current mailing address, as required by applicable law or
reasonable administration.
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5.
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Receive
Account contributions directly from the Clients (the "Clients") or their
agents, or receive transfers of assets directly from predecessor
custodians/trustees, for investment in accordance with instructions
received from the Client or his agent. All such investments shall be
registered in the name of Custodian as
custodian.
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6.
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Allocate
contributions between or among each Account as directed by the appropriate
Client.
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7.
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Provide
at least annual statements to the Client setting forth the market value of
the Client's account during the
year.
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8.
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As
necessary, forward to and provide Clients with such notices of annual
meetings, corporate actions, proxies and any other materials required by
applicable law to be provided to the
Clients.
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9.
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Provide
to each Client such information or notifications as may be required to be
furnished in accordance with applicable law, including without limitation
tax withholding election forms.
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10.
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Follow
the written instructions of the Client directing redemption, reinvestment
of assets, distribution of assets for the purposes of benefit payments,
return of excess contributions or deferrals, transfers to successor
custodians/trustees, transfers from predecessor custodians/trustees and
any other action, provided that such directions and actions are in
conformity with the terms of applicable law. On behalf of the Custodian,
Transfer Agent shall prepare, file and distribute all necessary tax forms
for each Account, including, but not limited to l099Rs and 5498s, which
may be required by applicable law. Transfer Agent shall maintain a copy of
all such forms in its files as required by applicable
law.
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11.
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Process
and report redemptions, including making the appropriate tax withholding
and promptly transmitting of amounts withheld to the appropriate revenue
agency in accordance with applicable
law.
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12.
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Maintain
age records of the Clients and notify each Client as required by U.S.
Treasury Regulations and other applicable law relating to required minimum
distributions ("RMD"). Calculate the amount of the RMD based on the method
elected by the Client and collect the information concerning a 70 1/2
election of payment method.
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13.
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Respond
promptly to all Client inquiries and maintain records of such responses
for no less than the term of this Agreement or as otherwise required by
applicable law.
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14.
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Promptly
deliver to the Custodian copies of all written correspondence received
from the U.S. Securities and Exchange Commission ("SEC"), the Internal
Revenue Service ("IRS") or any other governmental agency regarding any
act, transaction, duty or failure to perform any act or duty which is the
subject matter of or is related to the Accounts, this Agreement or the
performance thereof.
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15.
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Provide
Custodian a monthly statement, in a format reasonably required by
Custodian, reflecting the current owner of Accounts for which the
Custodian acts as custodian of record, noting with accuracy the fair
market value of each Account as of the last business day of the
month.
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16.
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Collect
all fees payable by the Fund relating to the Account investments and pay
compensation due and payable in accordance with Article V
below.
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B.
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If
Transfer Agent is unable to perform or has failed to perform any of the
services it has agreed to perform herein at any time, Transfer Agent
promptly shall notify Custodian in writing detailing: (i) the nature of
the omissions or failures, (ii) the number and/or duration of such
omissions or failures, (iii) the reason for each omission or failure, (iv)
the proposed solution to correct each omission or failure,
and (v) a procedure for preventing such omissions or failures
going forward.
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III.
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Safekeeping of Assets.
Transfer Agent shall assume sole responsibility for the investment
and the safekeeping of all Account assets. Transfer Agent shall perform
all recordkeeping and accounting functions (including but not limited to
purchases and redemptions and earnings and loss calculations) for each
Account, and shall provide a detailed report regarding such recordkeeping
and accounting to the Custodian at least annually or more frequently upon
Custodian's reasonable request.
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IV.
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Indemnification.
Transfer Agent hereby agrees to indemnify, defend and hold
Custodian harmless against any and all claims, demands, actions, suits,
judgments, IRS or other governmental penalties or fees of any nature,
losses, damages, costs, charges and other expenses of every nature
(including legal counsel and other professional fees and expenses) arising
out of or in any way relating to the Transfer Agent's responsibilities
under this Agreement; and for any error, omission, negligent act or
willful misconduct by Transfer Agent in the performance of this Agreement.
Each party shall act with reasonable care in the performance of its duties
under this Agreement. The indemnity and defense provisions set forth in
this paragraph shall indefinitely survive the termination or assignment of
this Agreement.
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Fund
hereby agrees to indemnify, defend and hold Custodian harmless against any and
all claims, demands, actions, suits, judgments, IRS or other governmental
penalties or fees of any nature, losses, damages, costs, charges and other
expenses of every nature (including legal counsel and other professional fees
and expenses) arising out of or in any way relating to the Fund's
responsibilities under this Agreement; and for any error, omission, negligent
act or willful misconduct by Fund in the performance of this Agreement. Each
party shall act with reasonable care in the performance of its duties under this
Agreement. The indemnity and defense provisions set forth in this paragraph
shall indefinitely survive the termination or assignment of this
Agreement.
V. Compensation
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A.
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Transfer
Agent shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit
B hereto, as amended
from time to time.
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B.
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The
Custodian shall be compensated for providing the custodial services set
forth in this Agreement in accordance with the fee schedule set forth on
Exhibit
B hereto, as amended
from time to time. All compensation and reimbursable expenses owed to the
Custodian shall be paid within thirty (30) calendar days following
invoice, except for any fee or expense subject to a good faith dispute.
Such disputed amount shall be paid within ten (10) calendar days of the
day on which the parties agree to the amount to be paid. With the
exception of any fee or expense disputed in good faith as set forth above,
unpaid invoices shall accrue a finance charge of 1 1\2% per month
after the due date.
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VI. Compliance
with Laws
Transfer
Agent and the Fund shall be legally and contractually responsible for ensuring
that, in providing services or agreeing to the provision of such services under
this Agreement, they have not exposed Custodian to any regulatory or legal
noncompliance with regard to any applicable law. If Transfer Agent or the Fund
do expose Custodian to such regulatory or legal noncompliance, they shall
indemnify, defend, hold harmless and make the Custodian whole with regard to
such exposure.
Further,
Fund, Custodian and Transfer Agent hereby agree to the terms and requirements as
set forth in Exhibit
C which are
hereby incorporated by reference.
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VII. Privacy
of Client and Account Information
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A.
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"Confidential
Information" shall mean all information however collected,
compiled, or received, including without limitation, through
non-electronic or electronic means pertaining to or identifiable in any
way to any Client or Account, including but not limited to, first and last names, home
addresses, telephone numbers, account numbers, account balances, account
positions, account statements, account activity, social security numbers,
driver's license numbers, account access codes, pass words, account lists,
and any other information that may be compiled or derived
therefrom.
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X.
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Xxxxx-Xxxxx-Xxxxxx.
Because Custodian is a federally-regulated financial institution that must
comply with the safeguards for Confidential Information contained in the
Xxxxx-Xxxxx-Xxxxxx Act ("GLBA") and regulations promulgated pursuant to
GLBA, Transfer Agent must establish, as an entity that maintains,
processes, or otherwise is permitted access to Confidential Information,
appropriate measures designed to safeguard Confidential Information.
Specifically, Transfer Agent must establish and maintain data security
policies and procedures designed to ensure the
following:
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1.
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security
and confidentiality of Confidential
Information;
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2.
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protection
against anticipated threats or hazards to the security or integrity of
Confidential Information;
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3.
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protection
against the unauthorized access or use of Confidential
Information.
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C.
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Monitoring.
Transfer Agent must permit Custodian to monitor and/or audit Transfer
Agent's compliance with this Section during regular business hours upon
not less than 48 hours' notice to Transfer Agent and to provide to
Custodian copies of audits and system test results acquired by Transfer
Agent in relation to the data security policies and procedures designed to
meet the requirements set forth
above.
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VIII. Disposition of Confidential
Information.
Transfer
Agent is required to develop appropriate security measures for the proper
disposal and destruction of Confidential Information. Upon termination of this
Agreement, Transfer Agent must forward all Confidential Information to Custodian
or, with Custodian's permission, Transfer Agent may provide Confidential
Information to a successor custodian or destroy the Confidential Information.
Transfer Agent shall provide written certification to Custodian that Transfer
Agent has forwarded or destroyed, all such Confidential Information in Transfer
Agent's possession. Notwithstanding the foregoing, Transfer Agent may retain one
archival copy of Confidential Information, to demonstrate compliance with the
provisions of this Section and to meet any regulatory retention requirements of
Transfer Agent.
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IX.
Right to Audit; Access.
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A.
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The
Custodian's business operations are regularly audited by (i) various
government agencies having supervisory and regulatory authority over
Custodian (the "Regulatory Authorities") and (ii) Custodian's own internal
auditors. Transfer Agent agrees to fully cooperate with Custodian's
efforts to meet its regulatory obligations and will comply in a timely
manner with Custodian's reasonable requests for documentation and
information.
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B.
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The
following are deemed reasonable requests of Custodian, with which Transfer
Agent shall comply:
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1.
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Transfer
Agent shall make its books, records, and operations relating to all
products and services provided to Custodian or Custodian's customers
available for audit or inspection by the Regulatory Authorities, by
Custodian, or by Custodian's independent auditors with at least 48 hours'
advance notice from Custodian.
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2.
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Within
five (5) business days of Custodian's written request, Transfer Agent
shall provide all applicable audit reports, including but not limited to:
SAS 70, performance, financial, internal control and security reviews;
penetration testing; intrusion detection; and firewall
configuration.
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3.
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If
a deficiency is noted or determined in any such audit report, Transfer
Agent must also provide to Custodian any and all documentation related to
resolution of the audit deficiencies and the corrective actions
implemented to prevent recurrence of such
deficiency.
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X. Foreign
Based Suppliers.
Transfer
Agent shall not use any subcontractors that are based outside the United States
of America who will have access to Confidential Information without Custodian's
prior written consent.
XI. Term
of Agreement; Amendment
This
Agreement shall become effective as of the date first written above and will
continue in effect for an initial period of two (2) years and thereafter will
continue in full force and effect until terminated as provided herein. This
Agreement may be terminated by any party upon giving ninety (90) days prior
written notice to the other parties. This Agreement may not be amended or
modified in any manner except by written agreement executed by the
parties.
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XII. Duties
in the Event of Termination
In the
event that, in connection with termination, a successor to any of the
Custodian's duties or responsibilities hereunder is designated by the Fund by
written notice to the Custodian, the Custodian will promptly, upon such
termination and at the expense of the Fund, transfer to such successor all
relevant books, records, correspondence, and other data established or
maintained by the Custodian under this Agreement in a form reasonably acceptable
to the Fund (if such form differs from the form in which the Custodian has
maintained the same, the Fund shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from the
Custodian's persOlmel in the establishment of books, records, and other data by
such successor. If no such successor is designated, then such books, records and
other data shall be returned to the Fund.
XIII. Assignment
This
Agreement shall extend to and be binding upon the respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Fund without the written consent of the Custodian, or by the Custodian without
the written consent of the Fund.
XIV. Governing
Law
This
Agreement shall be construed in accordance with the laws of the State of Ohio,
without regard to conflicts of law principles. To the extent that the applicable
laws of the State of Ohio, or any of the provisions herein, conflict with the
applicable federal law, the latter shall control, and nothing herein shall be
construed in a manner inconsistent with the Investment Companies Act of 1940 or
any rule or order of the Securities and Exchange Commission promulgated
thereunder.
XV. No
Agency Relationship
Nothing
herein contained shall be deemed to authorize or empower either party to act as
agent for the other party to this Agreement, except as otherwise specifically
provided in this Agreement.
XVI. Services
Not Exclusive
Nothing
in this Agreement shall limit or restrict the Custodian from providing services
to other parties that are similar or identical to some or all of the services
provided hereunder.
XVII. Invalidity
Any
provision of this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall case, the parties shall not
invalidate or render unenforceable such provision in any other
jurisdiction. In such case, the parties shall in good
faith modify or substitute such provision consistent with the original intent of
the parties.
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XVIII. Notices
Any
notice required or permitted to be given by either party to the other shall be
in writing and shall be deemed to have been given on the date delivered
personally or by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or on the date sent
and confirmed received by facsimile transmission to the other party's address
set forth below:
Notice to
the Custodian shall be sent to:
U.S. Bank
National Association
U.S.
Bank, NA
0000 X.
Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx,
XX 00000
Attn: Xxx
Xxxxxx
Phone:
000-000-0000
Fax:
000-000-0000
and
notice to the Fund shall be sent to:
000
Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
and
notice to the Transfer Agent shall be sent to:
Matrix
Fund Services
000 X
Xxxxxxxxxxxxx Xxxx, 0xx
Xxxxx
Willow
Grove, P A 19090-1904
XIX. Multiple
Originals
This
Agreement may be executed on two or more counterparts, each of which when so
executed shall be deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
a duly authorized officer on one or more counterparts as of the date first
written above.
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SCHEDULE
A
List of
Funds
Name of
Series
Capital
Management Mid-Cap Fund
Capital
Management Small-Cap Fund
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Reliance
Provisions
EXHIBIT
C
I. Recitals.
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1.1
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Custodian
is a financial institution subject to the Bank Secrecy Act and Section 326
of the USA PATRIOT Act requiring it to implement and maintain a Customer
Identification Program as part of its Anti-Money Laundering Program and
Bank Secrecy Act Policy.
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1.2
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Custodian
provides custodial services to Accounts and, in connection therewith, is
obligated to comply with all laws, rules and regulations relating to the
provision of services to such Accounts. The custodial services provided to
Accounts by Custodian are specified in a written custodial agreement
between the Custodian and each Account
Client.
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1.3
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Transfer
Agent is a federally regulated Transfer Agent and has implemented an
Anti-Money Laundering Program that complies with Section 326 of the USA
Patriot ACT.
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1.4
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Fund
is a federally regulated registered investment company and has implemented
an Anti-Money Laundering Program that complies with Section 326 of the USA
Patriot ACT.
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1.5
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Fund
is in the business of providing mutual fund investments to individuals and
entities, and, in that capacity, provides services to third parties that
are or may be customers of Funds and/or Transfer Agent, but are not
otherwise customers of, or specifically known to, the Custodian prior to
becoming a custodial customer of the Custodian as described in Section
1.2, above ("Third Parties").
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1.6
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Custodian,
Fund and Transfer Agent desire to assure that the services Fund and
Transfer Agent provide to such Third Parties also comply with such Laws,
as that term is defined below.
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NOW
THEREFORE, in consideration of the foregoing, the covenants set forth below, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
2. Fund and Transfer Agent
Obligations Regarding Laws and Compliance Related Matters
For so
long as the Custodian provides custodial services to any Third Parties, and Fund
and Transfer Agent provide services to Third Parties, the parties agree that
Fund shall be legally and contractually responsible for ensuring that the
services it provides to Third Parties fully comply with the Laws. In
connection therewith, Fund agrees to the following additional
responsibilities:
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Fund will
establish and maintain policies and procedures related to right to financial
privacy; know your customer; Customer Identification Program; and any other
program, policies, and procedures which may in the future be found to be needed
for the proper conduct of the services provided by Fund and Transfer Agent in
conformity with the Laws. Fund shall operate, and shall cause the Transfer Agent
to operate, in compliance with such programs, policies and procedures. Custodian
shall, upon request, have the right to review, and provide comments on all such
policies.
Fund and
Transfer Agent shall give Custodian and representatives of the agencies which
regulate Custodian reasonable access to their policies, procedures, practices
and records, including but not by way of limitation those records made and
retained in accordance with the USA PATRIOT ACT Customer Identification Program,
maintained by Fund and/or Transfer Agent for Custodian at such time as the
requesting regulatory authority or Custodian, as applicable, may request for the
purpose of auditing compliance with the obligations described
hereunder.
Fund and
Transfer Agent will give Custodian notice and an opportunity to attend any
meetings that Transfer Agent may have with regulatory and other governmental
authorities that in any way relate to the Laws, or the matters contemplated by
this Agreement.
For
purposes hereof, "Laws" shall mean all federal, state and local laws and
regulations applicable to the provision of banking, financial or custodial
services by Custodian under this Agreement. These include, but are not limited
to, the Bank Secrecy Act, the USA PATRIOT Act, those relating to currency
reporting, the prevention of money laundering, and laws regarding the privacy of
nonpublic consumer information.
3. Fund and Transfer Agent
Obligations Regarding USA PATRIOT Act Customer Identification
Program
Fund
shall perform, or shall cause Transfer Agent to perform, with respect to all
Third Parties for which Custodian provides services, certain duties of the
Custodian's Customer Identification Program. Such duties will conform, in all
respects, with the requirements specified under the USA PATRIOT Act and the
implementing regulations applicable to national banks in addition to the
specific Customer Identification Program of the Custodian.
Fund
shall, or shall cause Transfer Agent to perform the following:
1.
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Collect
all identifying information of the Third Parties as applicable (name,
physical address, date of birth and taxpayer identification
number);
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2.
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Verify
the identity of the Third Parties prior to the opening of an account with
Custodian for Third Parties;
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