CUSTODIAN AGREEMENT
This Agreement, dated as of the _____ day of March, 1988,
made by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Rightime Fund (the "Rightime Series") and the
Rightime Blue Chip Fund (the "Blue Chip Series") are separate
series of Shares; and
WHEREAS, the Fund desires to appoint the Custodian as
custodian of the Securities and principal cash of the Rightime
Series and the Blue Chip Series and the Custodian is willing to
act in such capacity upon the terms and conditions herein set
forth;
WHEREAS, the Custodian in its capacity as custodian
hereunder will also collect and apply the dividends and interest
on said Securities in the manner and to the extent herein set
forth; and
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto, intending
to be legally bound, do hereby agree as follows:
Section 1. The terms as defined in this Section wherever
used in this Agreement, or in any amendment or supplement hereto,
shall have the meanings herein specified unless the context
otherwise requires.
Book-Entry Securities: The term Book-Entry Securities shall
mean securities issued by the Treasury of the United States of
America and federal agencies of the United States of America
which are maintained in the book-entry system ("the book-entry
system") as provided in Subpart 0 of Treasury Circular Xx. 000,
00 XXX 000, Xxxxxxx X of 31 CFR part 350, and the book-entry
regulations of federal agencies substantially in the form of
Subpart 0 and the term Book-Entry Account shall mean an account
maintained by a Federal Reserve Bank in accordance with the
aforesaid Circular and regulations.
Custodian: The term Custodian shall mean The Philadelphia
National Bank in its capacity as custodian under this Agreement.
investment Company Securities: The term Investment Company
Securities shall mean shares of stock or beneficial interest in a
regulated investment company registered under the Investment
Company Act of 1940 as amended.
Investment Company Securities Transaction: The term
Investment Company Securities Transaction shall mean the
purchase, sale or redemption for the account of the Fund of
Investment Company Securities.
Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or
information of any kind transmitted to the Custodian in person or
by telephone, telegram, telecopy or other mechanical or
documentary means lacking original signature, by a person or
persons reasonably believed in good faith by the Custodian to be
a person or persons authorized by a resolution of the Board of
Directors of the Fund to give oral Instructions on behalf of the
Fund.
Securities: The term Securities shall mean bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and
other securities and investments from time to time owned by the
Fund, including but not limited to Investment Company Securities,
options, stock index futures, and options on such stock index
futures.
Securities Depository: The term Securities Depository shall
mean a system for the central handling of securities where all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of the securities.
Series: The term Series shall mean The Rightime Series or
The Blue Chip Series or either or both such Series as the context
may specify or require.
Shareholders: The term Shareholders shall mean the
registered owners from time to time of the Shares of any Series
of the Fund in accordance with the stock registry records of the
Fund.
Shares: The term Shares shall mean the issued and
outstanding shares of common stock of any Series of the Fund.
Stock Index Futures: This term Stock Index Future shall
mean futures contracts on stock indices.
Written Instructions: The term Written Instructions shall
mean an authorization, instruction, approval, item or set of
data, or information of any kind transmitted to the Custodian in
original writing containing original signatures or a copy of such
document transmitted by telecopy including transmission of such
signature, reasonably believed in good faith by the Custodian to
be the signature of a person authorized by a resolution of the
Board of Directors of the Fund to give Written Instructions on
behalf of the Fund.
Section 2. The Fund shall from time to time file with
the Custodian a certified copy of each resolution of its Board of
Directors authorizing execution of Written Instructions and
specifying the number of signatories required, together with
certified signatures of the officers and other signatories
authorized to sign, which shall constitute conclusive evidence of
the authority of the officers and other signatories designated
therein, and shall be considered in full force and effect with
the Custodian fully protected in acting in reliance thereon until
it receives a new certified copy of a resolution adding or
deleting a person or persons with authority to give Written
Instructions. If the certifying officer is authorized to sign
Written Instructions, the certification shall also be signed by a
second officer of the Fund.
The Fund shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Directors
authorizing the transmittal of Oral Instructions and specifying
the person or persons authorized to give Oral Instructions and
the matter or matters which may be the subject of any such
instruction in accordance with this Agreement. Any resolution so
filed with the Custodian shall be considered in full force and
effect and the Custodian shall be fully protected in acting in
reliance thereon until it actually receives a new certified copy
of a resolution adding or deleting a person or persons with
authority to give Oral Instructions or revising matters so
provided. If the certifying officer is authorized to give Oral
Instructions, the certification shall also be signed by a second
officer of the Fund.
Section 3. For all purposes under this Agreement, the
Custodian is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives. In cases where the
first Instruction is an Oral Instruction that is not in the form
of a document or written record, the Fund shall be responsible
for delivering, or having delivered to the .Custodian, a
confirmatory Written Instruction or Oral Instruction in the form
of a document or written record, and in cases where the Custodian
receives an Instruction, whether Written or Oral, with respect to
a portfolio transaction (other than an Investment Company
Securities Transaction or a transaction involving a transfer on
the books of a Securities Depository) the Fund shall cause the
broker or dealer to send a written confirmation to the Custodian.
The Custodian shall be entitled to rely on the first Instruction
received and, for any act or omission undertaken in compliance
therewith, shall be free of liability and fully indemnified and
held harmless by the Fund. The Custodian shall if practicable
act upon and comply with any subsequent Written or Oral Instruc-
tion which modifies such first Instruction. The obligation of
the Custodian with respect to any follow-up or confirmatory
Written Instruction, Oral Instruction in documentary or written
form, or broker-dealer written confirmation shall be to make
reasonable efforts to detect any discrepancy between the original
Instruction and such confirmation and to report such discrepancy
to the Fund. The Custodian shall also be responsible for taking
any action necessary with respect to any timely follow-up Written
or Oral Instruction which countermands or modifies a written or
Oral Instruction. The Fund shall be responsible, at the Fund's
expense, for taking any action, including any reprocessing,
necessary to correct any discrepancy or error and, to the extent
such action requires the Custodian to act, the Fund shall give
the Custodian specific Written Instructions as to the action
required.
Section 4. The Fund hereby appoints the Custodian as
custodian of the Securities and cash of each of The Rightime Fund
Series and The Rightime Blue Chip Fund Series from time to time
on deposit hereunder, to be held by the Custodian and applied as
provided in this Agreement. The Custodian hereby accepts such
appointment subject to the terms and conditions hereinafter
provided. The Securities held by the Custodian shall, unless
payable to bearer or maintained in a Securities Depository or
Book-Entry Account pursuant to Section 5, be registered in the
name of the Custodian or in the name of its nominee. Securities,
excepting bearer securities and Investment Company Securities,
delivered from time to time to the Custodian upon purchase or
otherwise shall in all cases be in due form for transfer or
already registered as above provided. Such Securities and cash of
any Series of the Fund shall, however, be and remain the sole
property of the acquiring Series of the Fund and the Custodian
shall have only the bare custody thereof.
Section 5. The Fund hereby authorizes the Custodian to
deposit with a bank located in the United States assets held in
the Option Account created pursuant to Section 13 or a Futures
Account pursuant to Section 14 and to (a) deposit in its account
(s) with any Securities Depository registered as a Clearing
Agency under Section 17A of the Securities Exchange Act of 1934,
all or any part of the Securities as may from time to time be
held for the Fund, and (b) deposit Book-Entry Securities
belonging to the Fund in a Book-Entry Account which is maintained
for the Custodian by a Federal Reserve Bank and (c) hold
Investment Company Securities in the name of the Custodian or its
nominee in the form of an account on the books of the respective
investment company issuer. So long as any deposit referred to in
(a), (b) or (c) above is maintained for the Fund, the Custodian:
(i) shall deposit the Securities in an account that
includes only assets held by it for customers;
(ii) shall, with respect to Securities transferred to
the account of the Fund, identify as belonging to
the proper Series of the Fund a quantity of
securities in a fungible bulk of securities (i)
registered in the name of the Custodian or its
nominee, or (ii) shown on the Custodian's account
on the books of the Securities Depository, the
Book-Entry System, the Custodian's agent, or the
respective investment company issuer; and
(iii) shall send to the Fund such reports of the systems
of internal accounting control of the Custodian
and its agents through which such Securities are
deposited as are available and as the Fund may
reasonably request from time to time.
The Fund warrants that its Board of Directors has approved
the arrangement for the deposit of Securities in a Securities
Depository and the Book-Entry System and the xxxxxxx of
Investment Company Securities in the name of the Custodian or its
nominee in an account on the books of the T Investment Company
issuer.
Section 6. The Fund will initially transfer and deposit
or cause to be transferred and deposited with the Custodian all
of the Securities and cash owned by each Series of the Fund at
the time this Agreement becomes effective. Such deposit shall be
evidenced by appropriate schedules duly executed by the Fund and
the Fund agrees that it is solely responsible for the accuracy of
said schedules. The Fund will cause to be deposited with the
Custodian additional Securities of each Series of the Fund as the
same are purchased or otherwise acquired from time to time, and
any dividends or interest collected on such securities.
Thereafter the Fund will cause to be deposited with the
Custodian hereunder the net proceeds of Securities sold or
redeemed from time to time.
Section 7. The Custodian is hereby authorized and
directed to disburse cash from time to time as follows:
(a) for the purpose of payment for the purchase of
Securities purchased by any Series of the Fund, upon receipt by
the Custodian of both (1) Written or Oral Instructions
identifying the acquiring Series, specifying the Securities and
stating the purchase price, and the name of the broker,
investment banker or other party to or upon whose order the
purchase price is to be paid, and (11) except in respect to
Investment Company Securities, the Securities so purchased in due
form,for transfer or already registered as provided in Section 4,
provided, however, that the Custodian may make payment for
Securities on deposit with a Securities Depository and Book-Entry
Securities at such times as the Custodian enters a credit in the
account it maintains for the proper Series of the Fund to the
effect that it has accepted delivery of such Securities on behalf
of that Series of the Fund;
(b) for the purpose of transferring funds in connection
with a repurchase agreement, upon receipt by the Custodian of
(i) Written or Oral Instructions identifying the Series,
specifying the Securities, the purchase price and the party to
whom the purchase price is to be paid and (ii) written evidence
of the identity of the party obligated to repurchase the
Securities from the Fund;
(c) for the purpose of transferring funds to a duly
designated redemption paying agent to redeem or repurchase
Shares, upon receipt of Written or Oral Instructions identifying
the Series issuing such Shares and stating the applicable
redemption price thereof;
(d) for the purpose of exercising warrants and rights
received upon the Securities, upon timely receipt of Written or
Oral Instructions authorizing the exercise of such warrants and
rights and stating the consideration to be paid by the acquiring
Series;
(e) for the purpose of repaying in whole or in part any
loan of the Fund, upon receipt of Written or Oral Instructions
directing payment and stating the Securities, if any, to be
received against payment;
(f) for the purpose of paying over to a duly designated
Dividend Disbursing Agent such amounts as may be stated in
Written or Oral Instructions, representing proceeds of the sale
of warrants, rights, stock dividends, profit and increases in
values of the Securities of a Series, as the Fund may determine
to include in dividends and/or distribution declared on the
Shares of such Series;
(g) for the purpose of making or reimbursing the Fund for
other corporate expenditures upon receipt of Written or Oral
Instructions stating that such expenditures were authorized by
resolution of the Board of Directors of the Fund and are or were
for proper corporate purposes, and specifying the amount of
payment, the purpose for which such payment is to be made, naming
the person or persons to whom payment is to be made, and
allocating the payment to the Series of the Fund chargeable
therewith in whole or in part;
(h) for the purpose of transferring funds to any Sub-
Custodian, upon receipt of Written or Oral Instructions from the
Fund;
(i) in connection with the purchase or sale by a Series of
Stock Index Futures and puts and calls traded on commodities
exchanges as provided in Section 14;
(j) in connection with puts and calls traded on securities
exchanges as set forth in Section 14;
(k) as set forth in Section 9; or
(l) for the purpose of payment for the purchase of
Investment Company Securities purchased by any Series of the
Fund, upon receipt by the Custodian of Written or Oral
Instructions specifying the Securities and stating the purchase
price and the name of the broker, investment banker or other
party to or upon whose order the purchase price is to be paid.
Section 8. The Custodian is hereby authorized and
directed to deliver Securities of any Series of the Fund from
time to time as follows:
(a) for the purpose of exchanging Investment Company
Securities for other Investment Company Securities within the
same Investment company complex of funds;
(b) for the purpose of redeeming Investment Company
securities owned for the account of any Series of the Fund, upon
receipt by the Custodian of Written or Oral Instructions
specifying the Securities and stating the amounts of the proceeds
to be received for the account of the Series, the approximate
time of receipt and the manner of payments;
(c) for the purpose of completing sales of Securities other
than redemption of Investment Company Securities sold by any
Series of the Fund, upon receipt of both (i) the net proceeds of
sale and (ii) Written or Oral Instructions specifying the
Securities sold and stating the amount to be received and the
broker, investment banker or other party to or upon whose order
the Securities are to be delivered provided, however, that the
Custodian may accept payment owing in connection with the
disposition by the Fund of Securities on deposit with a
Securities Depository and Book-Entry Securities, by means of a
credit in the appropriate amount to the account described in
Section 5 hereof;
(d) for the purpose of exchanging Securities for other
Securities and/or cash upon timely receipt of (i) written or Oral
Instructions stating the Securities to be delivered and the
Securities and/or cash to be received in exchange and the manner
in which the exchange is to be made, and (ii) against receipt of
the other Securities and/or cash as specified in the Written or
Oral Instructions;
(e) for the purpose of exchanging or converting Securities
pursuant to their terms or pursuant to any plan of conversion,
consolidation, recapitalization, reorganization, readjustment or
otherwise, upon timely receipt of (i) Written or Oral
Instructions authorizing such exchange or conversion and stating
the manner in which such exchange or conversion is to be made,
and (ii) the Securities, certificates of deposit, interim
receipts, and/or cash to be received as specified in the Written
or Oral Instructions;
(f) for the purpose of presenting Securities for payment
which have matured or have been called for redemption;
(g) for the purpose of delivery of Securities of a Series
upon redemption of Shares of that Series in kind, upon receipt
(i) of Share Certificates of such Series in due form for
transfer, or proper processing of such Shares for which no Share
Certificates are outstanding, and (ii) appropriate Written or
Oral instructions;
(h) for the purpose of depositing with the lender
Securities of a Series to be held as collateral for a loan to
that Series of the Fund upon receipt of Written or Oral
Instructions directing delivery to the lender;
(i) upon receipt of Written or Oral Instructions stating
(i) the Securities to be delivered and the payment to be received
and (ii) payment, in connection with any repurchase agreement
related to such Securities; or
(j) in connection with puts and calls as set forth in
Section 13.
Section 9. The Custodian will collect from time to time
the dividends and interest on the Securities held by it hereunder
and will deposit the same for the benefit of the proper Series of
the Fund until disbursed as hereinafter provided.
The Custodian is authorized to advance or pay out of the
income account of any Series cash accrued interest on bonds
purchased and dividends on stocks sold and like items.
Subject to proper reserves for dividends owing on stocks
sold and like items, the Custodian will disburse the money from
time to time on deposit for the Fund to or upon the order of the
Fund as it may from time to time direct for the following
purposes:
(a) to pay the proper compensation and expenses of the
Custodian;
(b) to transfer funds to a duly designated Dividend
Disbursing Agent to pay dividends and/or distributions which may
be declared by the Board of Directors of the Fund on any Shares
of any Series upon receipt of appropriate Written or Oral
Instructions;
(c) to pay, or provide the Fund with money to pay taxes
upon receipt of appropriate Written or Oral Instructions;
(d) to transfer funds to a separate checking account
maintained by the Fund pursuant to Section 17(f) of the
Investment Company Act of 1940, as amended;
(e) to pay interest, management or supervisory fees,
administration, dividend and transfer agency fees and costs,
compensation of personnel, or operating expenses (including,
without limitation thereto, fees for legal, accounting and
auditing services), and to disburse cash for other purposes
charging any or all of such amounts against any Series properly
chargeable therewith upon receipt of Written or oral Instructions
requesting such payment or disbursement and identifying the
Series chargeable therewith.
Section 10. The Fund will cause any bank (including the
Custodian) from which it borrows money using Securities as
collateral to deliver to the Custodian a notice or undertaking in
the form currently employed by such bank setting forth the amount
which such bank will loan to the Fund against delivery of a
stated amount of collateral. The Fund shall promptly deliver to
the Custodian written or oral Instructions identifying the
borrowing Series and stating, for each loan: (a) the name of the
bank, (b) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note,
duly endorsed by the Fund, or other loan agreement, (c) the tine
and date, if known, on which the loan is to be entered into (the
"borrowing date"), (d) the date on which the loan becomes due and
payable, (e) the total amount payable to the borrowing Series of
the Fund on the borrowing date, and (f) the market value of
Securities of such Series to be delivered as collateral for such
loan, including the name of the issuer, the title and the number
of shares or the principal amount of any particular Securities.
The Custodian shall deliver on the borrowing date such specified
collateral and the executed promissory note, 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 as
set forth in the Written or Oral Instructions. The Custodian
may, at the option of the lending bank, keep 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 from time to time such
securities as additional collateral as may be specified in
Written or Oral Instructions, to collateralize further any
transaction described in this Section. The Fund shall cause all
Securities released from collateral status to be returned
directly to the Custodian.
In the event that Written or Oral Instructions fail to
specify the name of the issuer, the title and number of shares or
the principal amount of any particular Securities to be delivered
as collateral by the Custodian, the Custodian shall not be under
any obligation to deliver any particular Securities.
Section 11. If the Custodian should in its sole
discretion advance funds on behalf of a Series of the Fund which
results in an overdraft because the moneys held by the Custodian
for the account of that Series of the Fund shall be insufficient
to pay the total amount payable upon purchase of securities or
which results in an overdraft for some reason if such Series of
the Fund is for any other reason indebted to the Custodian, such
overdraft or indebtedness shall be deemed to be a loan made by
the Custodian to that Series of the Fund payable on demand and
bearing interest at the current rate charged by the Custodian for
such loans. The Fund hereby agrees that the Custodian shall have
a continuing lien and security interest in and to any property at
any time held by it for the benefit of the Fund or in which that
Series of the Fund may have an interest which is then in the
Custodian's possession or control or in possession or control of
any third party acting on the Custodian's behalf to the extent of
any such overdraft or indebtedness. The Fund authorizes the
Custodian, in its sole discretion, at any time to charge any such
overdraft or indebtedness together with interest due thereon
against any balance of account standing to such Series' credit on
the Custodian's books; provided, however, that the Custodian may
not charge any amounts against the balance of account to the
Series' credit unless it has notified the Fund of the overdraft
prior to the making of such charges.
Section 12. Upon receipt of Written or Oral Instructions,
the Custodian will execute, or cause a sub-custodian or agent to
execute, an escrow receipt relating to any covered call written
by a Series of the Fund, and will deliver such escrow receipt
against payment of the premium therefor. Such Instructions shall
contain all information necessary for the issuance of such
receipt and will authorize the deposit of the Securities
specified therein into an escrow account of the proper Series of
the Fund. Securities so deposited into an escrow account will be
held by the Custodian or sub-custodian or agent subject to the
terms of such escrow receipt. However, the Custodian agrees that
it will not deliver, or cause a sub-custodian or agent to
deliver, any Securities deposited in an escrow account pursuant
to an exercise notice unless it has received Instructions to do
so or (i) it has duly requested the issuance of such
Instructions; (ii) at least two business days have elapsed since
the delivery of such request to the Fund; and (iii) the Fund has
not advised it that the Fund has purchased Securities that are to
be delivered pursuant to the exercise notice. The Fund agrees
that it will not issue any Instructions which shall conflict with
the terms of any escrow receipt executed by the Custodian or a
sub-custodian or agent in relation to the Fund which is then in
effect. The parties agree that the Custodian need not maintain
any written evidence of any call written by the Fund as part of
its duties under this Agreement. The parties also agree that a
Series of the Fund may write calls on Securities ("underlying
securities") which are not owned by that Series of the Fund and
issue Instructions to the Custodian to execute, or cause a sub-
custodian or agent to execute, an escrow receipt on Securities
("convertible securities") which are, or are to be, owned by such
Series and are convertible into the underlying securities. In
such event, the parties agree that any Instructions as to the
execution of the escrow receipt will relate only to such
convertible securities but that any Instructions as to the
delivery of such Securities may instruct the Custodian to convert
the same.
Section 13. a. If a Series of the Fund purchases or sells
(writes) a put option contract ("put") or call option
contract ("call"), which is traded on securities exchanges or
quoted on the automatic quotation system of the National
Association of Securities Dealers, Inc., the Fund will, in
connection with such purchase or sale, deliver to the Custodian
Written or Oral Instructions which identify such Series, describe
the put or call in question including (i) whether the contract in
question is a put or call and whether the put or call has been
purchased or sold by the Fund; (ii) the exercise price, the
expiration date and the amount of premium to be paid or received;
(iii) it- a premium is to be paid by the Fund, the identity of
the broker and the documentation to be provided by such broker
against receipt by the broker of the premium; (iv) if a premium
is to be received by the Fund, the identity of the paying broker;
(v) a description of the investment to which the put or call
relates; (vi) if the transaction is a closing purchase or sale
transaction, the documentation or cash to be delivered to the
broker through which the transaction was made; and (vii) in the
case of a call sold by a Series of the Fund, whether the call is
covered.
b. If the option sold is a put or uncovered call, the
Written or Oral Instructions shall also state either (a) the
amount and kind of collateral required by the broker, which
amount shall be delivered directly to the broker through whom
such option was written in return for both a receipt issued by
such broker and a confirmation by such broker of the option
transaction at such times and in such manner as is in accordance
with the customs prevailing among brokers in such securities and
or (b) the amount and kind of assets of the Series, if any, which
shall be segregated from the general assets of that Series and
shall be held by the Custodian in a segregated option account
(the "Option Account"). The Custodian shall set up and maintain
the Option Account as it shall be directed by Written or Oral
Instructions and shall increase or decrease the assets in such
Option Account only as it shall be so directed by subsequent
Written or Oral Instructions.
c. If an option contract purchased or sold by a Series
expires, the Fund will deliver to the Custodian Written or Oral
Instructions containing the information specified in paragraph a.
above and instruct the Custodian to (a) delete such option
contract from the list of holdings that the Custodian maintains
for the series if it is a put or call held by the Series and (b)
to either remove from the Option Account the assets held therein
with respect to such option (which assets shall be specified in
such Written or Oral Instructions) , or to remove the restriction
on any securities underlying a covered call, as the case may be.
Upon the return and/or cancellation or expiration of any escrow
receipts, the Custodian shall remove such restrictions, delete
the option from the list of holdings maintained by the Custodian,
and transfer such assets to the general account maintained by the
Custodian for the benefit of the Series. Collateral delivered by
a broker with whom it was previously deposited shall, if
identical with the collateral specified in the receipt previously
issued by such broker, be accepted by the Custodian and held in
the general account maintained by the Custodian for the benefit
of the Series. The Custodian shall accept delivery of collateral
not specified in such a receipt only upon receipt of Written or
Oral Instructions.
d. If a call option sold by a Series of the Fund is
exercised, the Fund shall promptly furnish the Custodian with
Written or Oral Instructions stating: (a) that the Custodian
shall deliver the related investments or cash; (b) a description
of the related investments or a statement of the amount of cash
to be delivered; (c) the person to whom the delivery is to be
made; (d) the amount, if any to be received by the Custodian to
hold for the Fund upon such delivery; and (e) the assets, if any,
to be removed from the Option Account or the collateral, if any,
to be returned by a broker with whom it was deposited. Assets of
the Fund freed of restrictions imposed by reason of an option and
collateral returned by a broker shall be held by the Custodian in
the general account of the proper Series of the Fund.
If a put option sold by a Series of the Fund is exercised, the
Fund shall promptly furnish the Custodian with Written or Oral
Instructions stating: (a) that the Custodian shall make payment
for the related investment or a cash payment as the case may be,
subject to the put, (b) a description of the related investment
or a statement of the amount of cash to be delivered, (c) the
identity of the person to whom payment will be made against
delivery of the related investments or to whom the delivery of
cash is to be made; (d) the assets, if any, to be removed from
the Option Account and/or the collateral, if any, to be returned
by a broker with which it was deposited, such assets and
collateral to be held by the Custodian in the general account of
the proper Series of the Fund.
e. If a put sold by a Series of the Fund is exercised, the
Fund shall promptly furnish the Custodian with Written or Oral
Instructions stating (i) that the Custodian shall make payment
for the related investments subject to the put or a cash payment
as the case may be; (ii) a description of the related investment
of a statement of the amount of cash to be delivered; (iii) the
identity of the person to whom payment will be made against
delivery of the related investment or to whom the delivery of
cash is to be made; and (iv) the assets, if any, to be removed
from the Option Account and/or the collateral, if any, to be
returned by a broker with which it was deposited, such assets
and/or collateral to be held by the Custodian in the general
account of the proper Series of the Fund.
f. If the Instructions indicate that the option
transaction in question is a closing purchase transaction, the
Custodian shall, upon (i) payment by it of the premium for the
call purchased (if the closing purchase transaction is as to a
call sold by the Fund) or for the put purchased (if the closing
purchase transaction is as to a put sold by the Fund); (ii) (if
the closing purchase transaction is the purchase of a call to
close out a covered call written by the Fund) the return and/or
cancellation or expiration of any escrow receipts as to such
covered call; and (iii) receipt of Written or Oral Instructions
to do so, take action as to the put or call terminated by the
closing purchase transaction as specified for expired options in
c. above.
g. If any put or call held by a Series of the Fund is to
be exercised by the Fund, such exercise must be the subject of
Written or Oral Instructions received by the Custodian not later
than its close of business of the last business day before the
last day on which the option may be exercised. (This shall not
affect the right of the Fund to sell any put or call held by it
at any time prior to its lapse or to permit any put or call held
by it to lapse unexercised.) Such Instruction shall (i) identify
the put or call held by the Fund being exercised by it including
the exercise price, the related investments and the broker which
is the other party to the transaction; (ii) in the case of the
exercise by the Fund of a put, instruct the Custodian to deliver
the related investments to such broker against receipt of the
exercise price from such broker or to receive cash from such
broker, as the case may be, the amount of such cash to be
specified in such Instructions, and (iii) in the case of the
exercise by the Fund of a call, instruct the Custodian to deliver
the exercise price to such broker against receipt from such
broker of the related investments; the Custodian shall then take
action as to the put or call exercised as specified for expired
options.
h. The Custodian shall be under no duty or obligation to
see that the Fund has deposited or its maintaining adequate
margin, if required, with any broker in connection with an option
nor shall the Custodian be under duty or obligation to present
such option to the broker unless it receives Written or Oral
Instructions from the Fund. The Custodian shall have no
responsibility for the legality of any put or call option
purchased or sold on behalf of the Fund, the propriety of any
such purchase or sale, and the adequacy of any collateral
delivered to a broker in connection with an option or held in the
Option Account. The Custodian specifically, but not by way of
limitation, shall not be under any duty or obligation (i) to
periodically check or notify the Fund that the amount of such
collateral held by a broker or assets held in the Option Account
is sufficient to protect such broker or the Fund against any
loss, (ii) to effect the return of any collateral delivered to a
broker, or (iii) to advise the Fund that any option it holds, has
or is about to expire. Such duties or obligations shall be the
sole responsibility of the Fund.
Section 14. The Custodian is authorized and directed to
take action as to puts, calls, and futures contracts ("Futures")
purchased or sold by the Fund which are traded on commodities
exchanges as set forth in this Section 14.
(a) If a Series of the Fund purchases or sell Futures or a
put or call traded on a commodities exchange, it will, in
connection with such purchase or sale of a Future deliver to the
Custodian Written or Oral Instructions which describe the Future
in question including (i) the investment to which the Future
relates, (the "related investment"); (ii) the nature and amount
of initial margin; and (ill) the identity of the futures
commission merchant ("FCM"); see (c) below as to the-procedures
as to puts and calls. The Custodian shall thereupon establish an
account (the "FCM Account") in the name of such FCM, unless an
FCM Account has already been established for such FCM. The FCM
Account shall contain cash or cash equivalents, including open-
end Investment Company Securities other than Shares, which equal
at least the sum of the aggregate value of the margin required to
be established or maintained on all futures contracts through
such FMC owned by the Fund, marked to market each day. The
Custodian shall permit access to the assets in the FCM Account
only by the FCM (except for payments to the Fund's general
account on Instructions from the Fund) and only if the FCM states
to the Custodian orally with written confirmation that the Fund
is in default on an obligation to perform, that all conditions
precedent to the right of the FCM to direct disposition have been
satisfied and that disposition is for a proper purpose. Upon
receipt of Written or Oral Instructions to do so, the Custodian
shall make deposits in and withdrawals from a specified and
segregated FCM Account in connection with initial and variation
margin and excess margin, including deposits and withdrawals in
connection with the closing out of Futures and the taking or
making of delivery pursuant to any Future. Upon receipt of
Written or Oral Instructions to do so, the Custodian shall make
payments to a clearing corporation if such corporation has made
payments to an FCM on behalf of the Fund.
(b) In connection with the purchase of Futures and calls on
Futures, the Custodian shall, on receipt of Written or Oral
Instructions to do so, segregate from the general assets of the
Fund and hold in a segregated sub-account (the "Futures Account")
an amount and kind of assets indicated in such Instructions and
consistent with the Fund's exemptive order from the United States
Securities and Exchange Commission and shall increase or decrease
the assets in Futures Account or terminate it only as directed in
future Instructions. In absence of such an Instruction to
segregate specific assets in the Futures Account, the Custodian
shall segregate assets of the required value from the Fund's
general custodial accounts equal in value to at least the sum of
the aggregate value of all Futures Contracts of the Fund, market
to market each day, less than amount of margin deposits with
respect thereto, such assets being free of any allocation to
support any other options or Futures obligations of the Fund.
The Fund may direct the substitution of any qualified asset in
its general accounts for any segregated asset in its Future
Account.
(c) The procedures and responsibilities as to puts and
calls as set forth in Section 13 shall also apply to puts and
calls covered by this Section 14 except that (i) references to
brokers shall be deemed to refer to FCMs; and (ii) reference to
collateral shall be deemed to refer to initial and variation
margin, and collateral shall not be delivered or received from a
broker but initial and variation margin shall be deposited to or
withdrawn from the applicable FCM Account; (iii) reference to the
Option Account shall be deemed to refer to the Futures Account.
(d) Nothing herein contained shall prevent the Custodian,
the Fund and any FCM from entering into any agreement or
agreements (to which the Fund's investment adviser may also be a
party) not inconsistent herewith relating to Futures and/or puts
and calls traded on commodities exchanges.
(e) The responsibilities and liabilities of the Custodian
as to Futures, puts and calls traded on commodities exchanges,
any FCM Account and the Futures Account shall be limited as set
forth in paragraph (h) of Section 13 as if such paragraph
referred to an FCM Account, instead of margin, FCMs rather than
brokers, Futures and puts and calls traded on commodities
exchanges rather than puts and calls there covered and the
Futures Account rather than the Option Account.
Section 15. The Custodian assumes no duty, obligation or
responsibility whatsoever to exercise any voting or consent
powers with respect or the Securities held by it from time to
time hereunder, it being understood that the Fund or such person
or persons as it may designate, shall have the right to vote, or
consent or otherwise act with respect to such Securities. The
Custodian will exercise its best efforts to furnish to the Fund
in a timely manner proxies or other appropriate authorizations
with respect to Securities registered in the name of the
Custodian or its nominee so that such voting powers, or powers to
consent to otherwise act may be exercised by the Fund or pursuant
to its direction.
Section 16. The Custodian's compensation shall be as set
forth in Schedule A hereto attached, or as shall be set forth in
amendments to such Schedule approved in writing by the Fund and
the Custodian.
Section 17. The Custodian will exercise its best efforts to
handle, forward, or process in a prompt and timely manner notices
of stockholder meetings, proxy statements, annual reports,
conversion notices, call notices, or other notices or written
materials of any kind sent to the registered owners of securities
(hereinafter referred to as "notices and materials"), it being
understood that the Fund and its investment adviser have primary
responsibility for reviewing such notices and materials, and for
taking action thereon. The Custodian will make reasonable
efforts to promptly forward such notices and materials as it
receives them to the Fund, but makes no warranty or
representation that all notices and materials have not been
timely received by Custodian.
Upon receipt by the Custodian of warrants or rights issued
in connection with the assets of the Fund, the Custodian shall
enter into its ledgers appropriate notations indicating such
receipt and shall notify the fund of such receipt, but shall not
have any obligation to take any action of any kind with respect
to such warrants or rights except upon receipt of written or Oral
Instructions from the Fund.
Section 18. The Custodian assumes no duty, obligation or
responsibility whatsoever with respect to Securities not
deposited with the Custodian, with the exception of Securities
deposited with any sub-custodian appointed by the Custodian.
Common stocks or other Securities exchanged for Shares shall not
be considered deposited with the Custodian until physically
received by Custodian in accordance with the provisions of this
Agreement. Custodian does not warrant the effective transfer of
any Security until registration in the name of the Custodian or
its nominee has been accomplished.
Section 19. The Custodian acknowledges and agrees that all
books and records maintained for the Fund in any capacity under
this Agreement are confidential and the property of the Fund.
They may be inspected by the Fund, or any authorized regulatory
agency, at any reasonable time, and upon request will be
surrendered promptly to the Fund. The Custodian shall provide
the Fund with immediate notice of any request for review of the
Fund's books and records, and no party will be allowed access to
such books and records unless such prior notice has been given
and consent has been received from the Fund unless otherwise
required by law, regulation, or court order; the Custodian will
immediately notify the Fund of any such examination in progress.
The Custodian agrees to make available upon request and to
preserve for the periods prescribed in Rule 3la-2 under the
Investment Company Act of 1940 any records relating to services
provided under t is Agreement which are required to be maintained
by Rule 3la-1 under said Act.
Section 20. The Custodian assumes only the usual duties and
obligations normally performed by custodians of mutual funds. It
specifically assumes no responsibility for the management,
investment or reinvestment of the Securities from time to time
owned by the Fund whether or not on deposit hereunder, it being
understood that the responsibility for the proper and timely
management, investment and reinvestment of said Securities shall
be that of the Fund and its investment advisor.
The Custodian shall not be liable for any taxes, assessments
or governmental charges which may be levied or assessed upon the
Securities held by it hereunder, or upon the income therefrom or
otherwise whatsoever. The Custodian may pay any such tax,
assessment or charge and reimburse itself out of the moneys of
the Fund or out of the Securities held hereunder; provided,
however, the Custodian shall consult the officers of the Fund
before making any such payment.
The Fund shall indemnify the Custodian and save it harmless
from any and against any and all actions, suits and claims
whether groundless or otherwise, arising directly or indirectly
out of or in connection with its performance under this Agreement
and from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities incurred by the
Custodian in connection with any such action, suit, or claim
except as shall arise out of the negligence or willful misconduct
of the Custodian, its officers, agents or employees. The
Custodian shall not be under any obligation to prosecute or to
defend any action, suit or claim arising out of or in connection
with its performance under this Agreement, which, in the opinion
of its counsel, may involve it in expense or liability, and the
Fund shall, so often as reasonably requested, furnish the
Custodian with satisfactory indemnity against such expense or
liability, and upon request of the Custodian the Fund shall
assume the entire defense of any action, suit or claim subject to
the foregoing indemnity; provided, however, that the Custodian
shall give the Fund written notice, and reasonable opportunity to
defend, any such action, suit, or claim, in the name of the Fund
or the Custodian or both.
Without limitation of the foregoing:
(a) The Custodian may rely upon the advice of counsel, who
may be counsel for the Fund or counsel for the Custodian and upon
statements of accountants, brokers and other persons believed by
it in good faith to be expert in the matters upon which they are
consulted and for any actions taken in good faith upon such
statements, the Custodian shall not be liable to anyone.
(b) The Custodian shall not be liable for any action taken
in good faith reliance upon any Written or Oral Instruction or
certified copy of any resolution of the Board of Directors of the
Fund, and the Custodian may rely upon the genuineness of any such
document or copy thereof believed in good faith by the Custodian
to have been validly executed.
(c) The Custodian may rely and shall be protected in acting
upon any signature, instruction, opinion of counsel, statement,
instrument, report, notice, consent, order, authorization or
other paper or document believed by it to be genuine and to have
been signed or presented by the Fund or other proper party or
parties.
Section 21. The Custodian is empowered to appoint one or
more U.S. banking institutions as Sub-Custodian (including but
not limited to, U.S. banks located in foreign countries) of
Securities and moneys at any time owned by the Fund to permit
Custodian to effectively perform the duties called for hereunder.
Upon receipt of Written or Oral Instructions, directing or
approving such appointment, the Custodian shall no liability to
the Fund or any other person by reason of any act or omission of
any Sub-Custodian so approved or appointed by the Fund and the
Fund shall indemnify the Custodian and save it harmless from any
and against any and all actions, suits and claims, whether
groundless or otherwise and from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liabilities arising directly or indirectly out of or in
connection with the performance of any Sub-Custodian approved or
appointed by the Fund. The Custodian shall not be under any
obligation to prosecute or to defend any action, suit or claim
arising out of or in connection with the performance of any Sub-
Custodian approved or appointed by the Fund, which, in the
opinion of its counsel, may involve it in expense or liability,
and the Fund shall, so often as reasonably requested, furnish the
Custodian with satisfactory indemnity against such expense or
liability, and upon request of the Custodian, the Fund shall
assume the entire defense of any action, suit, or claim subject
to the foregoing indemnity.
The Fund shall pay all fees and expenses of any Sub-
Custodian approved or appointed by the Fund, to the extent that
such fees or expenses have not been paid to the Custodian for the
performance of the services so provided by the Sub-Custodian.
Section 22. This Agreement may be amended from time to
time without notice to or approval of the Shareholders by a
written supplemental agreement executed by the Fund and the
Custodian and amending and supplementing this Agreement in a
manner mutually agreed.
Section 23. Either the Fund or the Custodian may give
written notice to the other of the termination of this Agreement,
such termination to take effect at the time specified in the
notice which shall not be earlier than sixty (60) days after the
date of giving such notice. In case such notice of termination
is given either by the Fund or by the Custodian, the Fund shall
use its best efforts to obtain a qualified successor custodian.
If the Fund cannot obtain a qualified successor custodian, then
the Board of Directors of the Fund shall, by resolution duly
adopted, promptly designate the Fund as its own custodian. Each
successor custodian shall be a person qualified to so act under
the Investment Company Act of 1940, as amended. Upon receipt of
written notice from the Fund of the appointment of such successor
and upon receipt of Written or Oral Instructions, the Custodian
shall deliver such Securities and cash as it may then be holding
hereunder directly to and only to the successor custodian.
Unless or until a successor custodian has been appointed as above
provided, the Custodian then acting shall continue to act as
Custodian under this Agreement. Every successor custodian
appointed hereunder shall execute and deliver an appropriate
written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its
predecessor Custodian. The Custodian ceasing to act shall
nevertheless, upon request of the Fund and successor custodian
and upon payment of its charges and disbursements, execute an
instrument in form approved by its counsel transferring to the
successor custodian all the predecessor Custodian's rights,
duties, obligations and custody.
In case the Custodian shall consolidate with or merge into
any other corporation, the corporation remaining after or
resulting from such consolidation or merger shall ipso facto,
without the execution or filing of any papers or documents,
succeed to and be substituted for the Custodian with like effect
as though originally named as such.
Section 24. Nothing contained in this Agreement is
intended to or shall require the Custodian in any capacity
hereunder to perform any functions or duties on any holiday, day
of special observance or any other day on which the Custodian or
the New York Stock Exchange is closed unless required by law, and
functions or duties normally scheduled to be performed on such
days shall be performed on, and as of, the next succeeding
business day on which both the New York Stock Exchange and the
Custodian are open.
Section 25. This Agreement shall take effect on the date
hereof or on such other date as the parties agree to transfer the
Fund's assets to the Custodian.
Section 26. This Agreement may be executed in 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.
Section 27. This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of its Board of
Directors.
Section 28. This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Fund and the Custodian have caused
this Agreement to be signed by their respective Presidents or
Vice Presidents and their corporate seals hereunto duly affixed,
and attested by their respective Secretaries or Assistant
secretaries, as of the day and year first above written.
THE RIGHTIME FUND, INC.
By
(SEAL) Title:
Attest
THE PHILADELPHIA NATIONAL BANK
By
(SEAL) Title:
Attest
SCHEDULE A
PHILADELPHIA NATIONAL BANK
CUSTODY FEE SCHEDULE
This pricing assumes all compensation in fees which will be billed on a
quarterly basis:
Annual Asset Maintenance
First $100 million $.15/$1,000
next 500 million .10/ 1,000
Subject to an annual minimum of $20,000.
Transaction Charges
Book-Entry (DTC, FED and Statement Accounts)$10
Physical/Repo $26
Futures $10
Options - trip $45
Wires in $10.50
Wires out $ 6.50
DTC and Mutual Fund Dividend Reinvestment$ 5.00
AMENDMENT TO CUSTODIAN AGREEMENT
This Agreement, dated the day of June, 1988, made
by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing-under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Fund and the Custodian entered into an
agreement dated March , 1988 wherein the Custodian agreed to
act as custodian of the Fund's securities and principal cash
("Custodian Agreement"); and
WHEREAS, the parties wish to amend the Custodian
Agreement to provide for the custody of the securities and
principal cash of The Rightime Growth Fund, a separate series of
shares of the Fund; and
WHEREAS, the parties are amending the definition of
"Series" in Section 1 of the Custodian Agreement in accordance
with Section 22 of that Agreement providing for modification of
the Agreement by a writing signed by both parties.
NOW, THEREFORE, the parties hereto with intent to be
legally bound, do hereby agree to amend the definition of
"Series" in Section 1 as follows:
"Series: The term Series shall mean The Rightime
Series, The Blue Chip Series, or The Rightime Growth Fund
Series, or either or all such Series as the context may
specify or require."
IN WITNESS WHEREOF, the Fund and the Custodian have
caused this Agreement to be signed by their respective Presidents
or Vice Presidents and their corporate seals hereunto duly
affixed, and attested by their respective Secretaries or
Assistant Secretaries, as of the day and year above written.
THE RIGHTIME FUND, INC.
Attest:
By:
Title:
THE PHILADELPHIA NATIONAL BANK
Attest:
By:
Title:
