CUSTODY AGREEMENT
THIS AGREEMENT, is made as of August 11, 2000, by and
between Advance Capital I, Inc., a business trust organized under
the laws of the State of Maryland (the "Company"), and THE FIFTH
THIRD BANK, a banking trust organized under the laws of the State
of Ohio (the "Custodian").
WITNESSETH:
WHEREAS, the Trust desires that the Securities and
cash of each of the investment portfolios identified in Exhibit
A hereto (such investment portfolios and individually referred
to herein as a "Fund" and collectively as the "Funds"), be held
and administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Custodian represents that it is a bank
having the qualifications prescribed in Section 26(a)(i) of the
1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
1.1 "Authorized Person" means any Officer or other
person duly authorized by resolution of the Board of Trustees to
give Oral Instructions and Written Instructions on behalf of the
Trust and named in Exhibit B hereto or in such resolutions of the
Board of Trustees, certified by an Officer, as may be received
the Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from
time to time serving under the Trust's Agreement and Declaration
of Trust, dated March 6, 1987,as from time to time amended.
1.3 "Book-Entry System" shall mean a federal book-entry
system as provided in Subpart O of Treasury Circular Xx. 000,
00 XXX 306, in Subpart B of 31 CFR Part 350, or in such book-entry
regulations of federal agencies as are substantially in the form of
such Subpart O.
1.4 "Business Day" shall mean any day recognized as a
settlement day by The New York Stock Exchange, Inc. and any other
day for which the Fund computes the net asset value of the Fund.
1.5 "NASD" shall mean The National Association
Securities Dealers, Inc.
1.6 "Officer" shall mean the President, any
Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Trust.
1.7 "Oral Instructions" shall mean instructions orally
transmitted to and accepted by the Custodian because such instructions
are: (i) reasonably believed by the Custodian to have been given by
an Authorized Person, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business and (iii) orally
confirmed by the Custodian. The Trust shall cause all Oral
Instructions to be confirmed by Written Instructions. If such
Written Instructions confirming Oral Instructions are not received
by the Custodian prior to a transaction, it shall in no way affect
the validity of the transaction or the authorization thereof by
the Trust. If Oral Instructions vary from the Written Instructions
which purport to confirm them, the Custodian shall notify the of
such variance but such Oral Instructions will govern
unless the Custodian has not yet acted.
1.8 "Custody Account" shall mean any account in the name
of the Trust, which is provided for in Section 3.2 below.
1.9 "Proper Instructions" shall mean Oral Instructions or
Written Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.
1.10 "Securities Depository" shall mean The Participants
Trust Company or The Depository Trust Company and (provided that
Custodian shall have received a copy of a resolution of the Board of
Trustees, certified by an Officer, specifically approving the use of
such clearing agency as a depository for the Trust) any other clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities and Exchange Act of 1934 (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.
1.11 "Securities" shall include, without limitation, common
and preferred stocks, bonds, call options, put options, debentures,
notes, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities, other money market instruments 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 interests therein, or any similar property or assets that
the Custodian has the facilities to clear and to service.
1.12 "Shares" shall mean the units of beneficial interest
issued by the Trust.
1.13 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and signed by one or
more persons as the Board of Trustees shall have from time to time
authorized, or (ii) communications by telex or any other such system
from a person or persons reasonably believed by the Custodian to be
Authorized, or (iii) communications transmitted electronically
through the Institutional Delivery System (IDS), or any other
similar electronic instruction system acceptable to Custodian
and approved by resolutions of the Board of Trustees, a copy of
which, certified by an Officer, shall have been delivered to the
Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash
owned by or in the possession of the Trust at any time during the
period of this Agreement, provided that such Securities or cash at
all times shall be and remain the property of the Trust.
2.2 Acceptance. The Custodian hereby accepts
appointment as such custodian and agrees to perform the duties
thereof as hereinafter set forth and in accordance with the 1940 Act
as amended. Except as specifically set forth herein, the Custodian
shall have no liability and assumes no responsibly for any
non-compliance by the Trust or a Fund of any laws, rules or
regulations.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property
held by the Custodian for the account of the Fund, except Securities
maintained in a Securities Depository or Book-Entry System, shall be
physically segregated from other Securities and non-cash property in
the possession of the Custodian and shall be identified as subject to
this Agreement.
3.2 Custody Account. The Custodian shall open and
maintain in its trust department a custody account in the name of
each Fund, subject only to draft or order of the Custodian, in which
the Custodian shall enter and carry all Securities, cash and other
assets of the Fund which are delivered to it.
3.3 Appointment of Agents. In its discretion, the
Custodian may appoint, and at any time remove, any domestic bank or
trust company, which has been approved by the Board of Trustees and
is qualified to act as a custodian under the 1940 Act, as
sub-custodian to hold Securities and cash of the Funds and to carry
out such other provisions of this Agreement as it may determine, and
may also open and maintain one or more banking accounts with such a
bank or trust company (any such accounts to be in the name of the
Custodian and subject only to its draft or order), provided, however,
that the appointment of any such agent shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement.
3.4 Delivery of Assets to Custodian. The Fund shall
deliver, or cause to be delivered, to the Custodian all of the Fund's
Securities, cash and other assets, including (a) all payments of
income, payments of principal and capital distributions received by
the Fund with respect to such Securities, cash or other assets owned
by the Fund at any time during the period of this Agreement, and (b)
all cash received by the Fund for the issuance, at any time during
such period, of Shares. The Custodian shall not be responsible for
such Securities, cash or other assets until actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The
Custodian may deposit and/or maintain Securities of the Funds in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:
(a) Prior to a deposit of Securities of the Funds in any
Securities Depository or Book-Entry System, the Fund shall deliver
to the Custodian a resolution of the Board of Trustees, certified by
an Officer, authorizing and instructing the Custodian on an on-going
basis to deposit in such Securities Depository or Book-Entry System
all Securities eligible for deposit therein and to make use of such
Securities Depository or Book-Entry System to the extent possible
and practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns
of collateral consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or Securities
Depository which includes only assets held by the Custodian as a
fiduciary, custodian or otherwise for customers.
(c) The records of the Custodian and the Custodian's
account on the books of the Book-Entry System and Securities
Depository as the case may be, with respect to Securities of a Fund
maintained in a Book-Entry System or Securities Depository shall, by
book-entry, or otherwise identify such Securities as belonging to
the Fund.
(d) If Securities purchases by the Fund are to be held
in a Book-Entry System or Securities Depository, the Custodian shall
pay for such Securities upon (i) receipt of advice from the
Book-Entry System or Securities Depository that such Securities have
been transferred to the Depository Account, and (ii) the making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. If Securities sold by the
Fund are held in a Book-Entry System or Securities Depository, the
Custodian shall transfer such Securities upon (i) receipt of advice
from the Book-Entry System or Securities depository that payment for
such Securities has been transferred to the Depository Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund.
(e) Upon request, the Custodian shall provide the Fund
with copies of any report (obtained by the Custodian from a
Book-Entry System or Securities Depository in which Securities of
the Fund is kept) on the internal accounting controls and procedures
for safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Trust for any
loss or damage to the Trust resulting (i) from the use of a
Book-Entry System or Securities Depository by reason of any
negligence or willful misconduct on the part of Custodian or any
sub-custodian appointed pursuant to Section 3.3 above or any of its
or their employees, or (ii) from failure of Custodian or any such
sub-custodian to enforce effectively such rights as it may have
against a Book-Entry System or Securities Depository. At its
election, the Trust shall be subrogated to the rights of the
Custodian with respect to any claim against a Book-Entry System or
Securities Depository or any other person for any loss or damage to
the Funds arising from the use of such Book-Entry System or
Securities Depository, if and to the extent that the Trust has been
made whole for any such loss or damage.
3.6 Disbursement of Moneys from Custody Accounts. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from a
Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only
upon compliance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities, futures
contracts and options on futures contracts), against the delivery
to the Custodian (or any sub-custodian appointed pursuant to Section
3.3 above) of such Securities registered as provided in Section 3.9
below in proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or Securities
Depository, in accordance with the conditions set forth in Section
3.5 above; (ii) in the case of options on Securities, against
delivery to the Custodian (or such sub-custodian) of such receipts as
are required by the customs prevailing among dealers in such options;
(iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or such sub-custodian)
of evidence of title thereto in favor of the Trust or any nominee
referred to in Section 3.9 below; and (iv) in the case of repurchase
or reverse repurchase agreements entered into between the Trust and
a bank which is a member of the Federal Reserve System or between
the Trust and a primary dealer in U.S. Government securities,
against delivery of the purchased Securities either in certificate
form or through an entry crediting the Custodian's account at a
Book-Entry System or Securities Depository for the account of the
Fund with such Securities;
(b) In connection with the conversion, exchange or
surrender, as set forth in Section 3.7(f) below, of Securities
owned by the Fund;
(c) For the payment of any dividends or capital gain
distributions declared by the Fund;
(d) In payment of the redemption price of Shares as
provided in Section 5.1 below;
(e) For the payment of any expense or liability
incurred by the Trust, including but not limited to the following
payments for the account of a Fund: interest; taxes; administration,
investment management, investment advisory, accounting, auditing,
transfer agent, custodian, trustee and legal fees; and other
operating expenses of a Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated as
deferred expenses;
(f) For transfer in accordance with the provisions of
any agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD, relating
to compliance with rules of The Options Clearing Corporation and
of any registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other arrangements
in connection with transactions by the Trust;
(g) For transfer in accordance with the provisions of
any agreement among the Trust, 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 Trust;
(h) For the funding of any uncertificated time deposit
or other interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term of
one year or less; and
(i) For any other proper purposes, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution of
the Board of Trustees, certified by an Officer, specifying the
amount and purpose of such payment, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to
whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall release and
deliver Securities from a Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of a
Fund but only against receipt of payment therefor in cash, by
certified or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry
System or Securities Depository, in accordance with the provisions
of Section 3.5 above;
(c) To an Offeror's depository agent in connection with
tender or other similar offers for Securities of a Fund; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer
into the name of the Trust, the Custodian or any sub-custodian
appointed pursuant to Section 3.3 above, or of any nominee or
nominees of any of the foregoing, or (ii) for exchange for a
different number of certificates or other evidence representing the
same aggregate face amount or number of units; provided that, in any
such case, the new Securities are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or pursuant
to any deposit agreement, including surrender or receipt of
underlying Securities in connection with the issuance or
cancellation of depository receipts; provided that, in any such
case, the new Securities and cash, if any, are to be delivered to
the Custodian;
(g) Upon receipt of payment therefor pursuant to any
repurchase or reverse repurchase agreement entered into by a Fund;
(h) In the case of warrants, rights or similar
Securities, upon the exercise thereof, provided that, in any
such case, the new Securities and cash, if any, are to be delivered
to the Custodian;
(i) For delivery in connection with any loans of
Securities of a Fund, but only against receipt of such collateral
as the Trust shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any
borrowings by the Trust on behalf of a Fund requiring a pledge of
assets by such Fund, but only against receipt by the Custodian of
the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Trust or a Fund;
(l) For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD, relating
to compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other arrangements
in connection with transactions by the Trust on behalf of a Fund;
(m) For delivery in accordance with the provisions of
any agreement among the Trust on behalf of a 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 Trust on behalf of a Fund;
or
(n) For any other proper corporate purposes, but only
upon receipt, in addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an Officer,
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 corporate purpose, and naming the person or persons to whom
delivery of such Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all
Securities held for a Fund;
(a) Subject to Section 7.4 below, collect on a timely
basis all income and other payments to which the Trust is entitled
either by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 7.4
below, collect on a timely basis the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or
otherwise become payable;
(c) Endorse for collection, in the name of the Trust,
checks, drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in
temporary form for Securities in definitive form;
(e) 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 now or hereafter
in effect, and prepare and submit reports to the Internal Revenue
Service ("IRS") and to the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;
(f) Hold for a Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or Securities
Depository, all rights and similar securities issued with respect to
Securities of the Fund; and
(g) In general, and except as otherwise directed in
Proper Instructions, attend to all non-discretionary details in
connection with sale, exchange, substitution, purchase, transfer
and other dealings with Securities and assets of the Fund.
3.9 Registration and Transfer of Securities. All
Securities held for a Fund that are issued or issuable only in
bearer form shall be held by the Custodian in that form, provided
that any such Securities shall be held in a Book-Entry System for
the account of the Trust on behalf of a Fund, if eligible therefor.
All other Securities held for a Fund may be registered in the name
of the Trust on behalf of such Fund, the Custodian, or any
sub-custodian appointed pursuant to Section 3.3 above, or in the
name of any nominee of any of them, or in the name of a Book-Entry
System, Securities Depository or any nominee of either thereof;
provided, however, that such Securities are held specifically for
the account of the Trust on behalf of a Fund. The Trust shall
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 any of the nominees hereinabove referred
to or in the name of a Book-Entry System or Securities Depository,
any Securities registered in the name of a Fund.
3.10 Records. (a) The Custodian shall maintain, by
Fund, complete and accurate records with respect to Securities,
cash or other property held for the Trust, including (i) journals
or other records of original entry containing an itemized daily
record in detail of all receipts and deliveries of Securities and
all receipts and disbursements of cash; (ii) ledgers (or other
records) reflecting (A) Securities in transfer, (B) Securities in
physical possession, (C) monies and Securities borrowed and monies
and Securities loaned (together with a record of the collateral
therefor and substitutions of such collateral), (D) dividends and
interest received, and (E) dividends receivable and interest
accrued; and (iii) canceled checks and bank records related thereto.
The Custodian shall keep such other books and records of the Trust
as the Trust shall reasonably request, or as may be required by the
1940 Act, including, but not limited to Section 3.1 and Rule 31a-1
and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the
Custodian shall (i) be maintained in a form acceptable to the Trust
and in compliance with rules and regulations of the Securities and
Exchange Commission, (ii) be the property of the Trust and at all
times during the regular business hours of the Custodian be made
available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the
Securities and Exchange Commission, and (iii) if required to be
maintained by Rule 31a-1 under the 1940 Act, be preserved for
the periods prescribed in Rule 31a-2 under the 0000 Xxx.
3.11 Fund Reports by Custodian. The Custodian shall
furnish the Trust with a daily activity statement by Fund and a
summary of all transfers to or from the Custody Account on the day
following such transfers. At least monthly and from time to time,
the Custodian shall furnish the Trust with a detailed statement, by
Fund, of the Securities and moneys held for the Trust under this
Agreement.
3.12 Other Reports by Custodian. The Custodian shall
provide the Trust with such reports, as the Trust may reasonably
request from time to time, on the internal accounting controls and
procedures for safeguarding Securities, which are employed by the
Custodian or any sub-custodian appointed pursuant to Section 3.3
above.
3.13 Proxies and Other Materials. The Custodian shall
cause all proxies if any, relating to Securities which are not
registered in the name of a Fund, to be promptly executed by the
registered holder of such Securities, without indication of the
manner in which such proxies are to be voted, and shall include
all other proxy materials, if any, promptly deliver to the Trust
such proxies, all proxy soliciting materials, which should include
all other proxy materials, if any, and all notices to such
Securities.
3.14 Information on Corporate Actions. Custodian will
promptly notify the Trust of corporate actions, limited to those
Securities registered in nominee name and to those Securities held
at a Depository or sub-Custodian acting as agent for Custodian.
Custodian will be responsible only if the notice of such corporate
actions is published by Xcitek, DTC, or received by first class mail
from the transfer agent. For market announcements not yet received
and distributed by Custodian's services, Trust will inform its
custody representative with appropriate instructions. Custodian
will, upon receipt of Trust's response within the required deadline,
affect such action for receipt or payment for the Trust. For those
responses received after the deadline, Custodian will affect such
action for receipt or payment, subject to the limitations of the
agent(s) affecting such actions. Custodian will promptly notify
Trust for put options only if the notice is received by first class
mail from the agent. The Trust will provide or cause to be provided
to Custodian with all relevant information contained in the
prospectus for any security which has unique put/option provisions
and provide Custodian with specific tender instructions at least ten
business days prior to the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase
of Securities for the Trust, Written Instructions shall be delivered
to the Custodian, specifying (a) the name of the issuer or writer of
such Securities, and the title or other description thereof, (b) the
number of shares, principal amount (and accrued interest, if any) or
other units purchased, (c) the date of purchase and settlement, (d)
the purchase price per unit, (e) the total amount payable upon such
purchase, and (f) the name of the person to whom such amount is
payable. The Custodian shall upon receipt of such Securities
purchased by a Fund pay out of the moneys held for the account of
such Fund the total amount specified in such Written Instructions
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 Custody Account there is
insufficient cash available to the Fund for which such purchase was
made.
4.2 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where payment for
the purchase of Securities for a Fund is made by the Custodian in
advance of receipt for the account of the Fund of the Securities
purchased but in the absence of specific Written or Oral
Instructions to so pay in advance, the Custodian shall be liable
to the Fund for such Securities to the same extent as if the
Securities had been received by the Custodian.
4.3 Sale of Securities. Promptly upon each sale of
Securities by a Fund, Written Instructions shall be delivered to
the Custodian, specifying (a) the name of the issuer or writer of
such Securities, and the title or other description thereof, (b)
the number of shares, principal amount (and accrued interest, if
any), or other units sold, (c) the date of sale and settlement (d)
the sale price per unit, (e) the total amount payable upon such
sale, and (f) the person to whom such Securities are to be
delivered. Upon receipt of the total amount payable to the Trust
as specified in such Written Instructions, the Custodian shall
deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding
Section 4.3 above or any other provision of this Agreement, the
Custodian, when instructed to deliver Securities against payment,
shall be entitled, if in accordance with generally accepted market
practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Trust shall bear the
risk that final payment for such Securities may not be made or that
such Securities may be returned or otherwise held or disposed of by
or through the person to whom they were delivered, and the Custodian
shall have no liability for any of the foregoing.
4.5 Payment for Securities Sold, etc. In its sole
discretion and from time to time, the Custodian may credit the
relevant Custody Account, prior to actual receipt of final payment
thereof, with (i) proceeds from the sale of Securities which it has
been instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Trust, and (iii) i
ncome from cash, Securities or other assets of the Trust. Any such
credit shall be conditional upon actual receipt by Custodian of final
payment and may be reversed if final payment is not actually
received in full. The Custodian may, in its sole discretion and
from time to time, permit the Trust to use funds so credited to
its Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the
Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian
may, in its sole discretion and from time to time, advance funds to
the Trust to facilitate the settlement of a Trust transactions on
behalf of a Fund in its Custody Account. Any such advance shall be
repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF TRUST SHARES
Transfer of Funds. From such funds as may be available for
the purpose in the relevant Custody Account, and upon receipt of
Proper Instructions specifying that the funds are required to redeem
Shares of a Fund, the Custodian shall wire each amount specified in
such Proper Instructions to or through such bank as the Trust may
designate with respect to such amount in such Proper Instructions.
Upon effecting payment or distribution in accordance with proper
Instruction, the Custodian shall not be under any obligation or have
any responsibility thereafter with respect to any such paying bank.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall
establish and maintain a segregated account or accounts for and on
behalf of each Fund, into which account or accounts may be
transferred cash and/or Securities, including Securities maintained
in a Depository Account,
(a) in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under
the 1934 Act and 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 (or the Commodity Futures
Trading commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Trust,
(b) for purposes of segregating cash or Securities in
connection with securities options purchased or written by a Fund or
in connection with financial futures contracts (or options thereon)
purchased or sold by a Fund,
(c) which constitute collateral for loans of Securities
made by a Fund,
(d) for purposes of compliance by the Trust with
requirements under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in connection with
reverse repurchase agreements and when-issued, delayed delivery
and firm commitment transactions, and
(e) for other proper corporate purposes, but only upon
receipt of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Trustees, certified by an Officer,
setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to
the exercise of reasonable care in carrying out its obligations under
this Agreement, and shall be without liability to the Trust for any
loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damages, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian
appointed pursuant to Section 3.3 above. The Custodian's cumulative
liability within a calendar year shall be limited with respect to
the Trust or any party claiming by, through or on behalf of the
Trust for the initial and all subsequent renewal terms of this
Agreement, to the actual damages sustained by the Trust, (actual
damages for uninvested funds shall be the overnight Feds fund rate).
However, Custodian will not be liable for special incidental or
punitive damages. The Custodian shall be entitled to rely on and
may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. The Custodian shall promptly notify the Trust of any
action taken or omitted by the Custodian pursuant to advice of
counsel. The Custodian shall not be under any obligation at any
time to ascertain whether the Trust 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.
7.2 Actual Collection Required. The Custodian shall
not be liable for, or considered to be the custodian of, any cash
belonging to the Trust or any money represented by a check, draft or
other instrument for the payment of money, until the Custodian or
its agents actually receive such cash or collect on such instrument.
7.3 No Responsibility for title, etc. So long as and to
the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received or
delivered by it pursuant to this Agreement.
7.4 Limitation on Duty to Collect. Custodian shall
not be required to enforce collection, by legal means or otherwise,
of any money or property due and payable with respect to Securities
held for the Trust if such Securities are in default or payment is
not made after due demand or presentation.
7.5 Reliance Upon Documents and Instructions. The
Custodian shall be entitled to rely upon any certificate, notice or
other instrument in writing received by it and reasonably believed
by it to be genuine. The Custodian shall be entitled to rely upon
any Oral Instructions and/or any Written Instructions actually
received by it pursuant to this Agreement.
7.6 Express Duties Only. 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.
7.7 Cooperation. The Custodian shall cooperate with and
supply necessary information, by the Trust, to the entity or
entities appointed by the Trust to keep the books of account of the
Trust and/or compute the value of the assets of the Trust. The
Custodian shall take all such reasonable actions as the Trust may
from time to time request to enable the Trust to obtain, from year
to year, favorable opinions from the Trust's independent accountants
with respect to the Custodian's activities hereunder in connection
with (a) the preparation of the Trust's report on Form N-1A and Form
N-SAR and any other reports required by the Securities and Exchange
Commission, and (b) the fulfillment by the Trust of any other
requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Trust shall indemnify and hold
harmless the Custodian and any sub-custodian appointed pursuant to
Section 3.3 above, and any nominee of the Custodian or of such
sub-custodian from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability (including,
without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign
securities and/or banking laws) or claim arising directly or
indirectly (a) from the fact that Securities are registered in the
name of any such nominee, or (b) from any action or inaction by the
Custodian or such sub-custodian (i) at the request or direction of
or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its
obligations under this Agreement or any sub-custody agreement with
a sub-custodian appointed pursuant to Section 3.3 above or, in the
case of any such sub-custodian, from the performance of its
obligations under such custody agreement, provided that neither the
Custodian nor any such sub-custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense,
liability or claim arising from the Custodian's or such
sub-custodian's negligence, bad faith or willful misconduct.
8.2 Indemnity to be Provided. If the Trust requests the
Custodian to take any action with respect to Securities, which may,
in the opinion of the custodian, result in the Custodian or its
nominee becoming liable for the payment of money or incurring
liability of some other form, the Custodian shall not be required to
take such action until the Trust shall have provided indemnity
therefor to the Custodian in an amount and form satisfactory to the
Custodian.
ARTICLE IX
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; power
failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of
utility, transportation, computer (hardware or software) or telephone
communication service; accidents; 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.
Notwithstanding the foregoing, the Custodian shall maintain
sufficient disaster recovery procedures to minimize interruptions.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become
effective as of the date first set forth above and shall continue in
full force and effect until terminated as hereinafter provided.
10.2 Termination. Either party hereto may terminate this
Agreement 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 the giving of such notice. If a
successor custodian shall have been appointed by the Board of
Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of
termination (a) deliver directly to the successor custodian all
Securities (other than Securities held in a Book-Entry System or
Securities Depository) and cash then owned by the Trust and held
by the Custodian as custodian, and (b) transfer any Securities
held in a Book-Entry System or Securities Depository to an account
of or for the benefit of the Trust at the successor custodian,
provided that the Trust shall have paid to the Custodian all fees,
expenses and other amounts to the payment or reimbursement of which
it shall then be entitled. Upon such delivery and transfer, the
Custodian shall be relieved of all obligations under this Agreement.
The Trust may at any time immediately terminate this
Agreement in the event of the appointment of a conservator or
receiver for the Custodian by regulatory authorities in the State of
Ohio or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
10.3 Failure to Appoint Successor Custodian. If a
successor custodian is not designated by the Trust on or before the
date of termination specified pursuant to Section 10.1 above, then
the Custodian shall have the right to deliver to a bank or trust
company of its own selection, which is (a) a "Bank" as defined in
the 1940 Act, (b) has aggregate capital, surplus and undivided profits
as shown on its then most recent published report of not less than
$25 million, and (c) is doing business in New York, New York, all
Securities, cash and other property held by Custodian under this
Agreement and to transfer to an account of or for the Trust at
such bank or trust company all Securities of the Trust held in a
Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor
custodian under this Agreement and the Custodian shall be relieved
of all obligations under this Agreement. If, after reasonable
inquiry, Custodian cannot find a successor custodian as contemplated
in this Section 10.3, then Custodian shall have the right to deliver
to the Trust all Securities and cash then owned by the Trust and to
transfer any Securities held in a Book-Entry System or Securities
Depository to an account of or for the Trust. Thereafter, the Trust
shall be deemed to be its own custodian with respect to the Trust
and the Custodian shall be relieved of all obligations under this
Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed
upon from time to time by the Trust and the Custodian. The fees and
other charges in effect on the date hereof and applicable to the
Funds are set forth in Exhibit B attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
The Trust is a business trust organized under the laws of
the State of Maryland and under a Declaration of Trust, to which
reference is hereby made a copy of which is on file at the office of
Secretary of State of Maryland as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of
the Trust entered into in the name of the Trust or on behalf thereof
by any of the Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon any
of the Trustees, officers, employees, agents or shareholders of the
Trust or the Funds personally, but bind only the assets of the
Trust, and all persons dealing with any of the Funds of the Trust
must look solely to the assets of the Trust belonging to such Fund
for the enforcement of any claims against the Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices,
instructions, and other communications to be given hereunder shall
be in writing and shall be sent or delivered to The receipt at the
address set forth after its name herein below:
To the Trust:
Advance Capital I, Inc.
Xxx Xxxxx Xxxxxx Xxxxx #000
Xxxxxxxxxx, XX 00000
Attn: Accounting Dept.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Custodian:
The Fifth Third Bank
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Area Manager - Trust Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as either party shall have provided to the
other by notice given in accordance with this Article XIII. Writing
shall include transmission by or through teletype, facsimile, central
processing unit connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio.
14.2 References to Custodian. The Trust shall not
circulate any printed matter which contains any reference to
Custodian without the prior written approval of Custodian, excepting
printed matter contained in the prospectus or statement of additional
information or its registration statement for the Trust and such
other printed matter as merely identifies Custodian as custodian
for the Trust. The Trust shall submit printed matter requiring
approval to Custodian in draft form, allowing sufficient time for
review by Custodian and its counsel prior to any deadline for
printing.
14.3 No Waiver. No failure by either party hereto to
exercise and no delay by such party in exercising, any right
hereunder shall operate as a waiver thereof. The exercise by either
party hereto of any right hereunder shall not preclude the exercise
of any other right, and the remedies provided herein are cumulative
and not exclusive of any remedies provided at law or in equity.
14.4 Amendments. This Agreement cannot be changed orally
and no amendment to this Agreement shall be effective unless
evidenced by an instrument in writing executed by the parties hereto.
14.5 Counterparts. This Agreement may be executed in one
or more counterparts, and by the parties hereto on separate
counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.
14.6 Severability. If any provision of this Agreement
shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired thereby.
14.7 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by either party hereto without
the written consent of the other party hereto.
14.8 Headings. The headings of sections 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, each of the parties hereto has caused
this Agreement to be executed and delivered in its name and on its
behalf by its representatives thereunto duly authorized, all as of
the day and year first above written.
ATTEST: Advance Capital I, Inc.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxxx
Its: President
ATTEST: THE FIFTH THIRD BANK
By:_____________________
Its:____________________
Dated: August 11, 1999
EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc.
AND THE FIFTH THIRD BANK
August 11, 1999
Name of Fund Date
Advance Capital I, Inc. - Equity Growth Fund August 11, 1999
Advance Capital I, Inc. - Bond Fund August 11, 1999
Advance Capital I, Inc. - Balanced Fund August 11, 1999
Advance Capital I, Inc. - Retirement Income Fund August 11, 1999
Advance Capital I, Inc. - Cornerstone Stock Fund August 11, 1999
Advance Capital I, Inc.
By: /s/ Xxxx Xxxxxxxxx
\ Its: President
THE FIFTH THIRD BANK
By: _______________________
Its: ______________________
Dated: August 11, 1999
EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc.
AND THE FIFTH THIRD BANK
August 11, 1999
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of
the persons authorized by the Trust to Administer each Custody
Account.
Name Signature
Xxxx X. Xxxxxxxxx /s/ X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
SIGNATURE RESOLUTION
RESOLVED, That all of the following officers of
Advance Capital I, Inc. and any of them, namely the Chairman,
President, Vice President, Secretary and Treasurer, are hereby
authorized as signers for the conduct of business for an on behalf
of the Funds with THE FIFTH THIRD BANK:
Xxxx X. Xxxxxxxxx PRESIDENT /s/ X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxx VICE PRESIDENT /s/ Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxx VICE PRESIDENT /s/ Xxxxxxx X. Xxxx
TREASURER ______________________
Xxxxx X. Xxxxxxxxxx SECRETARY /s/ Xxxxx X. Xxxxxxxxxx
ASSISTANT TREASURER ______________
ASSISTANT SECRETARY _______________
The undersigned officers of Advance Capital I, Inc. hereby certify
that the foregoing is within the parameters of a Resolution adopted
by Trustees of the Trust in a meeting held April 30, 1999, directing
and authorizing preparation of documents and to do everything
necessary to effect the Custody Agreement between Advance Capital I,
Inc. and THE FIFTH THIRD BANK.
By: /s/ X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Its: President
EXHIBIT C
TO THE CUSTODY AGREEMENT BETWEEN
Advance Capital I, Inc. AND THE FIFTH THIRD BANK
August 11, 1999
MUTUAL FUND CUSTODY FEE SCHEDULE
BASIC ACCOUNT CHARGE
FUND SIZE:
Less than $25MM .01%
$25MM - $100MM .0075%
$100MM - $200MM .005%
Over $200MM .0025
Minimum Annual Fee $2,400.00
TRANSACTION FEES
DTC/FED Eligible Trades $9.00
DTC/FED Ineligible Trades $25.00
Amortized Security Trades $25.00
Repurchase Agreements (purchase and maturity) $9.00
Third Party Repo's (purchase and maturity) $9.00
Physical Commercial Paper Trades $25.00
(purchase and maturity)
Book-Entry Commercial Paper Trades $9.00
(purchase and maturity)
Options, each transaction $25.00
Amortized Security Paydowns $5.00
A transaction is a purchase, sale, maturity, redemption, tender,
exchange, dividend reinvestment, deposit or withdrawal of a secury
(with the exception of Fifth Third Certificates of Deposit,
Commercial Paper & Repo)
MISCELLANEOUS FEES
Wire Transfers $7.00
Check Disburments $6.00
/s/ X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
