EXHIBIT (g)
CUSTODY AGREEMENT
This AGREEMENT is made and entered into as of this 31st day of
December, 1999, by and between The Xxxxx Growth Fund, Inc. ("JGF"), Xxxxx Funds,
Inc. ("JFI") and American Eagle Funds, Inc. ("AEF"), each a corporation
organized under the laws of the State of Minnesota (each hereinafter referred to
as a "Company"), and Firstar Bank, N.A., a national banking association (the
"Custodian").
W I T N E S S E T H:
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WHEREAS, each Company desires that the Company's Securities and cash be
held and administered by the Custodian pursuant to this Agreement; and
WHEREAS, each Company 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,
each Company 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 Directors of a
Company to give Oral Instructions and Written Instructions on
behalf of a Fund and named in Exhibit A hereto or in such
resolutions of the Board of Directors, certified by an
Officer, as may be received by the Custodian from time to
time.
1.2 "Board of Directors" shall mean the board of directors of each
Company from time to time serving pursuant to the Company's
Articles of Incorporation and Bylaws, as 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 Company computes the net asset value of Shares of a
Fund.
1.5 "Fund" shall mean a portfolio of a Company.
1.6 "Fund Custody Account" shall mean any of the accounts in the
name of a Fund, which is provided for in Section 3.2 below.
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1.7 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.8 "Officer" shall mean the chairman, president, any vice
president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, or any assistant treasurer
of a Company.
1.9 "Oral Instructions" shall mean instructions orally transmitted
to and accepted by the Custodian because such instructions are
reasonably believed by the Custodian to have been given by an
Authorized Person and are orally acknowledged or confirmed by
the Custodian. Each Company shall cause all Oral Instructions
to be confirmed by Written Instructions prior to the end of
the next Business Day. 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 Company. If
Oral Instructions vary from the Written Instructions which
purport to confirm them, the Custodian shall notify the
Company of such variance, but such Oral Instructions will
govern unless the Custodian has not yet acted.
1.10 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.11 "Securities Depository" shall mean the Depository Trust
Company and (provided that custodian shall have received a
copy of a resolution of the Board of Directors, certified by
an Officer, specifically approving the use of such clearing
agency as a depository for the Fund) any other clearing agency
registered with the Securities and Exchange Commission under
Section 17A of the Securities and Exchange Act of 1934 as
amended (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.
1.12 "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 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.
1.13 "Shares" shall mean, with respect to a Fund, the units of
beneficial interest issued by a Company on account of the
Fund.
1.14 "Sub-Custodian" shall mean and include (i) any branch of a
"U.S. Bank," as that term is defined in Rule 17f-5 under the
1940 Act, (ii) any "Eligible Foreign Custodian," as that term
is defined in Rule 17f-5 under the 1940 Act, having a contract
with the Custodian which the Custodian has determined will
provide reasonable care of assets of each Fund based on the
standards specified in Section 3.3 below. Such contract shall
include provisions that provide: (i) for indemnification or
insurance arrangements (or any combination of the same), such
that each Company will be adequately protected against the
risk of loss of assets held in accordance with such contract;
(ii) that each Company's assets will not be subject to any
right, charge, security interest, lien or claim of any kind in
favor of the Sub-Custodian or its creditors, except a claim of
payment for their safe custody or administration, in the case
of cash deposits, liens or rights in favor of creditors of the
Sub-Custodian arising under bankruptcy, insolvency or similar
laws; (iii)
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that beneficial ownership of each Company's assets will be
freely transferable without the payment of money or value
other than for safe custody or administration; (iv) that
adequate records will be maintained, identifying the assets as
belonging to a Fund or as being held by a third party for the
benefit of a Fund; (v) that each Company's independent public
accountant will be given access to records or confirmation of
the contents of records maintained by Sub-Custodian; and (vi)
that each Company will receive periodic reports with respect
to the safekeeping of the Company's assets, including, but not
limited to, notification of any transfer to or from a Fund's
account or a third party account containing assets held for
the benefit of the Fund. Such contract may also contain other
provisions as the Custodian determines will provide the same
or a greater level of care and protection for Company assets.
1.15 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized
Person, or (ii) communications by facsimile or any other such
system from one or more persons reasonably believed by the
Custodian to be Authorized Persons, or (iii) communications
between electro-mechanical or electronic devices provided that
the use of such devices and the procedures for the use thereof
shall have been approved by resolutions of the Board of
Directors, a copy of which, certified by an Officer, shall
have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. Each Company hereby appoints the Custodian as
custodian of all Securities and cash owned by or in the
possession of the Company at any time during the period of
this Agreement.
2.2 Acceptance. The Custodian hereby accepts appointment as
custodian and agrees to perform the duties hereinafter set
forth.
2.3 Documents to be Furnished. The following documents, including
any amendments thereto, will be provided contemporaneously
with the execution of this Agreement to the Custodian by each
Company:
a. A copy of the Articles of Incorporation
certified by the Secretary;
b. A copy of the Bylaws of the Company
certified by the Secretary;
c. A copy of the resolution of the Board of
Directors of each Company approving the
appointment of the Custodian, certified by
the Secretary;
d. A copy of the then current prospectus and
statement of additional information of each
Fund; and
e. A certification of the chairman and
secretary of each Company setting forth the
names and signatures of the current Officers
of the Company and other Authorized Persons.
2.4 Notice of Appointment of Dividend and Transfer Agent. Each
Company agrees to notify the Custodian in writing of the
appointment, termination or change in appointment of any
dividend disbursement or transfer agent of the Company.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account
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of a Fund (other than 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 (including the Securities and
non-cash property of the other Funds) and shall be identified
as subject to this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall
open and maintain in its trust department a custody account in
the name of each Company coupled with 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 Company which are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of a Fund and to
carry out such other provisions of this Agreement; provided,
however, that the appointment of any such agents and
maintenance of any Securities or cash shall be at the
Custodian's expense and shall not relieve the Custodian of any
of its obligations or liabilities under this Agreement.
(b) If, after the initial approval of Sub-Custodians by the Board
of Directors of a Company, the Custodian wishes to appoint
other Sub-Custodians to hold property of a Fund, it will so
notify the Company and provide it with information reasonably
necessary to determine any such new Sub-Custodian's
eligibility under Rule 17f-5 under the 1940 Act, including a
copy of the proposed agreement with the Sub-Custodian. The
Company shall at the meeting of the Board of Directors next
following receipt of such notice and information give a
written approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian
acting hereunder shall contain the required provisions set
forth in Rule 17f-5(c)(2).
(d) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Directors of
each Company of the placement of Securities and cash of each
Fund with a particular Sub-Custodian. The Custodian shall
promptly take such steps as may be required to withdraw assets
of a Fund from any Sub-Custodian that has ceased to meet the
requirements of Rule 17f-5 under the 1940 Act.
(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants to each Company that it agrees
to exercise reasonable care, prudence and diligence of a
reasonably careful, prudent and diligent person having
responsibility for the safekeeping of fund assets would
exercise. The Custodian further warrants that each
Sub-Custodian will be subject to the same standard of care as
the Custodian considering all factors relevant to the
safekeeping of fund assets, including, without limitation: (i)
the Sub-Custodian's practices, procedures and internal
controls for certificated securities the method of keeping
custodial records and the security and data protection
practices; (ii) whether the Sub-Custodian has the requisite
financial strength to provide reasonable care for Fund assets;
(iii) the Sub-Custodian's general reputation and standing and,
in the case of a Securities Depository, the Securities
Depository's operating history and number of participants; and
(iv) whether the Company will have jurisdiction over and be
able to enforce judgments against the Sub-Custodian by virtue
of the existence of any offices of the Sub-Custodian in the
United States or the Sub-Custodian's consent to service of
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process in the United States, or otherwise.
(f) The Custodian shall monitor the appropriateness of maintaining
a Fund's assets with a particular Sub-Custodian and shall
monitor the Sub-Custodian's performance with respect to the
contract governing the Fund's arrangements with such
Sub-Custodian.
3.4 Delivery of Assets to Custodian. Each Company shall deliver,
or cause to be delivered, to the Custodian all of its
Securities, cash and other assets, including (a) all payments
of income, payments of principal and capital distributions
received by a Fund with respect to Securities, cash or other
assets owned by a Fund at any time during the period of this
Agreement, and (b) all cash received by a Fund for the
issuance, at any time during such period, of Shares. The
Custodian will provide timely notification to each Company and
its transfer agent of the receipt of payment for Shares of a
Fund. The Custodian shall not be responsible for such
Securities, cash or other assets until actually received.
3.5 Securities Depositories and Book-Entry Systems. The Custodian
may deposit and/or maintain Securities of a Fund in a
Securities Depository or in a Book-Entry System, subject to
the following limitations:
(a) Prior to the deposit of Securities of a Fund in any Securities
Depository or Book-Entry System, the Company shall deliver to
the Custodian a resolution of the Board of Directors of the
Company, certified by an Officer, authorizing and instructing
the Custodian 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,
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities.
(b) Securities of a 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.
(c) The records of the Custodian with respect to Securities of a
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to a Fund.
(d) If Securities purchased by a 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 a Fund. If Securities sold by a 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) The Custodian shall provide each Company with copies of any
report (obtained by the Custodian from a Book-Entry System or
Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
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(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable for any loss or damage to a Fund
resulting (i) from the use of a Book-Entry System or
Securities Depository by reason of any negligence, bad faith,
or willful misconduct on the part of Custodian or any
Sub-Custodian appointed pursuant to Section 3.3, or (ii) from
failure of Custodian or any Sub-Custodian to enforce such
rights as it may have against a Book-Entry System or
Securities Depository. At its election, a Fund 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 a Fund arising from
the use of such Book-Entry System or Securities Depository, if
and to the extent that the Fund has not been made whole for
such loss or damage.
3.6 Disbursement of Moneys from Fund Custody Account. 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 a Fund but only in
accordance 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 or 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 any Sub-Custodian appointed pursuant to
Section 3.3 above) 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 any Sub-Custodian appointed pursuant to
Section 3.3 above) of evidence of title thereto in
favor of the Fund or any nominee referred to in
Section 3.9 below; and (iv) in the case of repurchase
or reverse repurchase agreements entered into between
a Fund and a bank which is a member of the Federal
Reserve System or between a Fund 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 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 a Fund;
(c) For the payment of any dividends or capital gain
distributions declared by a 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 a Fund, including, but not limited to, the
following payments for the account of the Fund:
interest, taxes, administration, investment advisory,
accounting, auditing, transfer agent, custodian, and
legal fees and other operating expenses of the Fund,
whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
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(f) For transfer in accordance with the provisions of any
agreement among a Company, 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 a Fund;
(g) For transfer in accordance with the provision of any
agreement among a Company, 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 a Fund;
(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;
(i) For payment of the amount of dividends received in
respect of securities sold short; and
(j) For any other proper purpose, but only upon receipt,
in addition to Proper Instructions, of a copy of a
resolution of the Board of Directors, 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 Account. Upon receipt
of Proper Instructions, the Custodian shall release and
deliver Securities from a Fund 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
or 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 the
Fund;
(d) To the issuer thereof or its agent (i) for transfer
into the name of a Fund, the Custodian or any
Sub-Custodian appointed pursuant to Section 3.3
above, or into the name of any nominee of any of the
foregoing, (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, or (iii) when
such Securities are called, redeemed, retired or
otherwise become payable; provided that, in such
case, the cash or other consideration is to be
delivered to the Custodian.
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
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(f) For exchange or conversion pursuant to any plan or
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; 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 made by a Fund, but only against receipt
of such collateral as the Company shall have
specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any
borrowings by a Fund requiring a pledge of assets by
the Company, 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 a Company;
(l) For delivery in accordance with the provisions of any
agreement among a Company, 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 Funds;
(m) For delivery in accordance with the provisions of any
agreement among a Company, 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
Funds;
(n) Upon receipt of instructions from the transfer agent
for a Fund, for delivery to such transfer agent or to
the holders of Shares in connection with a
distribution in kind; or
(o) For any other proper corporate purpose, but only upon
receipt, in addition to Proper Instructions, of a
copy of a resolution of the Board of Directors of the
Company, 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 a Company,
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the Custodian may, in its discretion, and without express
authority from a Company:
(a) Subject to Section 7.4 below, collect on a timely
basis all income and other payments to which a
Company 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, retired or otherwise become payable;
(c) Endorse for collection, in the name of the Company,
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 each Company at such time, in
such manner and containing such information as is
prescribed by the IRS;
(f) Hold for the Funds, 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 Funds;
(g) In general, and except as otherwise directed in
Proper Instructions, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings
with Securities and assets of the Funds.
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 if
eligible therefor. All other Securities held for a Fund may be
registered in the name of the 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. Each Company 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 such Fund, 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
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collateral therefor and substitutions of such
collateral), (D) dividends and interest received, and
(E) dividends receivable and interest receivable; and
(iii) canceled checks and bank records related
thereto. The Custodian shall keep such other books
and records of a Fund as each Company shall
reasonably request, or as may be required by the 1940
Act, including, but not limited to, Section 31 of the
1940 Act and Rule 31a-2 promulgated thereunder,
applicable federal and state tax laws and any other
law or administrative rules or procedures which may
be applicable to a Fund.
(b) All such books and records maintained by the
Custodian shall (i) be maintained in a form
acceptable to each Company and in compliance with
rules and regulations of the Securities and Exchange
Commission, (ii) be the property of the Company 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 each Company 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 each
Company with a daily activity statement and a summary of all
transfers to or from each Fund Custody Account on the day
following such transfers. At least monthly and upon a
Company's request, the Custodian shall furnish the Company
with a detailed statement of the Securities and moneys held by
the Custodian (and the Sub-Custodians) for the Fund under this
Agreement, including certificate numbers in each such
statement.
3.12 Other Reports by Custodian. The Custodian shall provide each
Company with such reports, as the Company may request from
time to time or as may be required by law, 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 relating to Securities which are not registered in the
name of the Funds 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 promptly deliver
to each Company such proxies, all proxy soliciting materials
and all notices relating to such Securities.
3.14 Information on Corporate Actions. The Custodian shall promptly
deliver to each Company all information received by the
Custodian and pertaining to Securities being held by a Fund
with respect to optional tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Exhibit B. If a
Company desires to take action with respect to any tender
offer, exchange offer or other similar transaction, the
Company shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such
action. Each Company will provide or cause to be provided to
the Custodian all relevant information for any Security which
has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
ARTICLE IV
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PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of
Securities for a Company, 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 the Fund pay out of the moneys held
for the account of the 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
the Fund's Custody Account has insufficient cash available for
which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities
Purchased. In each and every case where payment for the
purchase of Securities for a Company is made by the Custodian
in advance of receipt of the Securities purchased but in the
absence of specified Written 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 Fund 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 "street delivery" custom, to
deliver such Securities prior to actual receipt of final
payment therefor; provided that in such case, the Custodian
shall have no liability for any loss arising from the delivery
of such Securities prior to receiving payment for such
Securities except as may arise from Custodian's own negligence
or willful misconduct.
4.5 Liability for Payment for Securities Sold. The Custodian may
credit a Fund Custody Account, in its sole discretion prior to
actual receipt of final payment for Securities sold, 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 Fund, and
(iii) income from cash, Securities or other assets of the
Fund. 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, permit a Fund to use funds so credited
to a Fund Custody Account in anticipation of actual receipt of
final payment. In such case, the funds shall be repayable
11
immediately upon demand made by the Custodian at any time
prior to the actual receipt of such final payment.
4.6 Advances by Custodian for Settlement. The Custodian may, in
its sole discretion and from time to time, advance funds to a
Company to facilitate the settlement of transactions in a Fund
Custody Account. Any such advance shall be repayable
immediately upon demand made by the Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt
of Proper Instructions specifying that the funds are required
to redeem Shares of the Fund, the Custodian shall wire each
amount specified in such Proper Instructions to such bank as
the Company may designate.
5.2 No Duty Regarding Paying Banks. The Custodian shall not be
under any obligation to effect payment or distribution by any
bank designated in Proper Instructions given pursuant to
Section 5.1 above of any amount pay by the Custodian to such
bank in accordance with such Proper Instructions.
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 may be transferred cash and/or Securities, including Securities
maintained in a Depository Account;
(a) in accordance with the provisions of any agreement
among a Company, 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
Company 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 Fund,
(b) for purposes of segregating cash or Securities in
connection with securities options purchased or
written by the Fund or in connection with financial
futures contracts (or options thereon) purchased or
sold by the Fund,
(c) which constitute collateral for loans of Securities
made by the Fund,
(d) for purposes of compliance by the Fund 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
Directors, certified by an Officer, setting forth the
purpose or purposes of such segregated
12
account and declaring such purposes to be proper
corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for a single Fund only. All Proper Instructions
relating to a segregated account shall specify the Fund involved.
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 any Company for
any loss, damage, cost, expense, liability or claim unless
such loss, damage, cost, expense, liability or claim arises
from negligence, bad faith or willful misconduct of the
Custodian or on any Sub-Custodian appointed pursuant to
Section 3.3 above. 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 Company of any action taken or omitted by the
Custodian pursuant to advice of counsel.
7.2 Actual Collection Required. The Custodian shall not be liable
for, or considered to be the custodian of, any cash belonging
to a Fund 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 Fund 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 any Written Instructions
actually received by it pursuant to this Agreement.
7.6 Co-operation. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by a
Company to keep the books of account of each Fund and/or
compute the value of the assets of the Fund or, if directed in
writing to do so by the Fund, shall itself keep such books of
account and/or compute such net asset value per share. The
Custodian shall take all such reasonable actions as each
Company may from time to time request to enable the Company to
obtain, from year to year, favorable opinions from the
Company's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the
preparation of the Company's reports 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 Company of
any other requirements of the Securities and Exchange
Commission.
13
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Company. Each Company shall indemnify and
hold harmless the Custodian from and against any loss, damage,
cost, expense (including reasonable attorneys' fees),
liability or claim arising directly or indirectly (a) from the
fact that Securities of the Company are registered in the name
of any 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 Company, or
(ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement, provided
that the Custodian shall not be indemnified and held harmless
from and against any such loss, damage, cost, expense,
liability or claim arising from the Custodian's or any
Sub-Custodian's or nominee's negligence, bad faith or willful
misconduct.
8.2 Indemnification by Custodian. The Custodian shall indemnify
and hold harmless each Company from and against any loss,
damage, cost, expense (including reasonable attorneys' fees),
liability or claim arising from the negligence, bad faith or
willful misconduct of the Custodian or any Sub-Custodian
appointed pursuant to Section 3.3 above, or any nominee of the
Custodian or of such Sub-Custodian.
8.3 Indemnity to be Provided. If a Company 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 Company shall have
provided indemnity therefor to the Custodian in an amount and
form satisfactory to the Custodian.
8.4 Security. If the Custodian advances cash or Securities to a
Fund for any purpose, either at a Company's request or as
otherwise contemplated in this Agreement the assets held for
the account of the Fund shall be security therefor, and should
the Fund fail to promptly to repay or indemnify the Custodian,
the Custodian shall be entitled to utilize available cash of
such Fund and to dispose of other assets of the Fund to the
extent necessary to obtain reimbursement or indemnification.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor any of the Companies 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 (i) shall not discriminate against the Company in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
14
10.1 Effective Period. This Agreement shall become effective as of
the date hereof with respect to AEF and on or about May 1,
2000 (with the parties to agree upon the exact effective date)
with respect to JGF and JFI and, unless sooner terminated as
provided herein, shall continue subject to Board of Directors
approval in effect for successive annual periods.
10.2 Termination. This Agreement may be terminated by any party to
this Agreement, upon giving sixty (60) days prior written
notice to the other parties or such shorter period as is
mutually agreed upon by the parties.
If a successor custodian shall has been appointed by the Board
of Directors, 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
Fund 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 a Fund at
the successor custodian, provided that the Company shall have
paid to the Custodian all fees, expenses and other amounts to
the payment or reimbursement of which it shall then be
entitled.
Each Company 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 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 Company 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 (a) is a "bank"
as defined in the 1940 Act and (b) has aggregate capital,
surplus and undivided profits as shown on its then most recent
published report of not less than $25 million, all Securities,
cash and other property held by Custodian under this Agreement
and to transfer to an account of or for each Fund at such bank
or trust company all Securities of the Fund 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.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from
time to time by each Company and the Custodian. The fees and other charges in
effect on the date hereof and applicable to each Fund are set forth in Exhibit C
attached hereto.
15
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of each Company hereunder
shall not be binding upon any of the Company's shareholders, nominees, officers,
agents or employees of the Company personally, but shall bind only the property
of the Company as provided in such Company's Articles of Incorporation, as
amended. The execution and delivery of this Agreement has been authorized by
each Company, and this Agreement has been signed and delivered by an authorized
Officer of each Company, acting as such, and neither such authorization by the
Company nor such execution and delivery by such Officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the corporation property of the Company as
provided in the above-mentioned Articles of Incorporation.
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 recipient at the address set forth after its name
hereinbelow:
To a Company:
-------------
Xxxxx Associates, Inc.
Attn: Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
To Custodian:
-------------
Firstar Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as the parties shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmissions 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 Company shall not circulate any
printed matter which contains any reference to the Custodian
without the prior written approval of the Custodian, excepting
printed matter contained in the prospectus or statement of
additional information for a Fund and such other printed
matter which merely identifies the Custodian as custodian for
a Fund. Each Company shall submit printed matter requiring
such approval to the Custodian in draft form, allowing
sufficient time for
16
review by the Custodian and its counsel prior to any deadline
for printing.
14.3 No Waiver. No failure by any party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by any 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 any 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.
17
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.
THE XXXXX GROWTH FUND, INC. FIRSTAR BANK, N.A.
By:______________________________ By: ________________________________
Attest: _______________________ Attest:_____________________________
XXXXX FUNDS, INC.
By:______________________________
Attest: _______________________
AMERICAN EAGLE FUNDS, INC.
By:______________________________
Attest: _______________________
18
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by each Company to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
------------------ -------------------
Xxxxx X. Xxxxx ___________________
Xxxxxx X. Xxxxx ___________________
Xxxx X. Xxxxx ___________________
Xxxxx X. Xxxx ___________________
Xxxxxxxx X. Xxxxxxx ___________________
Xxx X. Xxxxx ___________________
Xxxx Xxxxxx ___________________
Xxxxxxx Xxxxxx ___________________
Xxxxxxx Xxxxx ___________________
Xxxxxxxxxx Xxxxxxxxx ___________________
19
EXHIBIT B
FIRSTAR BANK, N.A.
STANDARDS OF SERVICE GUIDE
**[INSERT FOR REVIEW]**
20
EXHIBIT C
FIRSTAR BANK, N.A.
DOMESTIC CUSTODY FEE SCHEDULE
Firstar Bank, N.A., as Custodian, will receive monthly compensation for services
according to the terms of the following Schedule:
Annual fee based upon market value
1 basis point per year
Minimum annual fee per Fund - $3,000
Investment transactions (purchase, sale, exchange, tender, redemption, maturity,
receipt, delivery):
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$25.00 per mutual fund trade $75.00 per Euroclear
$ 8.00 per principal reduction on pass-through certificates
$ 6.00 per short sale/liability transaction
$35.00 per option/futures contracts
$15.00 per variation margin
$15.00 per Fed wire deposit or withdrawl
Variable Amount Demand Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
Plus reasonable out-of-pocket expenses, and extraordinary expenses based upon
complexity
Fees are billed monthly, based upon market value at the beginning of the month
21
