CUSTODY AGREEMENT
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This AGREEMENT, effective as of May 3, 2004, by and between Xxxxxx Capital
Funds, Inc. (the "Company"), a corporation organized under the laws of the State
of Maryland, acting for and on behalf of its initial series, Xxxxxx Equity &
Income Fund (the "Fund"), which is operated and maintained by the Company for
the benefit of the holders of shares of the Fund, and U.S. BANK, N.A., (the
"Custodian").
W I T N E S S E T H:
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WHEREAS, the Company desires that the Fund's Securities and cash be held
and administered by the Custodian pursuant to this Agreement;
WHEREAS, the 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, the
Company and the Custodian hereby agree as follows:
ARTICLE I
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DEFINITIONS
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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 to give Oral Instructions and Written
Instructions on behalf of the 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 Directors from time to time serving
under the Company's Articles of Incorporation, as from time to time amended.
1.3 "Book-Entry System" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFR
Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of such Subpart O.
1.4 "Business Day" shall mean any day recognized as a settlement day by The
New York Stock Exchange, Inc. and any other day for which the Company computes
the net asset value of Shares of the Fund.
1.5 "Fund Custody Account" shall mean any of the accounts in the name of
the Company, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.7 "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 the Company .
1.8 "Oral Instructions" shall mean instructions orally transmitted to and
accepted by the Custodian because such instructions are: (i) reasonably believed
by the Custodian to have been given by an Authorized Person, (ii) recorded and
kept among the records of the Custodian made in the ordinary course of business;
and (iii) orally confirmed by the Custodian. The 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.
1.9 "Proper Instructions" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
1.10 "Securities Depository" shall mean The 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 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.
1.11 "Securities" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank certificates
of deposit, bankers' acceptances, mortgage-backed securities or other
obligations, and any certificates, receipts, warrants or other instruments or
documents representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or any similar
property or assets that the Custodian has the facilities to clear and to
service.
1.12 "Shares" shall mean, with respect to the Fund, the shares of common
stock issued by the Company on account of the Fund.
1.13 "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 the 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 foregoing) such that the Fund will be adequately protected
against the risk of loss of assets held in accordance with such contract; (ii)
that the Fund'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) that
beneficial ownership for the Fund'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 the Fund or as being held by a third party for the benefit of the
Fund; (v) that the Fund's independent public accountants will be given access to
those records or confirmation of the contents of those records; and (vi) that
the Fund will receive periodic reports with respect to the safekeeping of the
Fund's assets, including, but not limited to, notification of any transfer to or
from the Fund's account or a third party account containing assets held for the
benefit of the Fund. Such contract may contain, in lieu of any or all of the
provisions specified above, such other provisions that the Custodian determines
will provide, in their entirety, the same or a greater level of care and
protection for Fund assets as the specified provisions, in their entirety.
1.14 "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
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APPOINTMENT OF CUSTODIAN
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2.1 Appointment. The Company hereby constitutes and appoints the Custodian
as custodian of all Securities and cash owned by or in the possession of the
Fund at any time during the period of this Agreement.
2.2 Acceptance. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as 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 the Company:
a. A copy of the Articles of Incorporation of the Company certified by
the Secretary;
b. A copy of the By-Laws of the Company certified by the Secretary;
c. A copy of the resolution of the Board of Directors of the Company
appointing the Custodian, certified by the Secretary;
d. A copy of the then current Prospectus of the Fund; and
e. A certification of the Chairman and Secretary of the 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. The Company
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent of the Fund.
ARTICLE III
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CUSTODY OF CASH AND SECURITIES
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3.1 Segregation. All Securities and non-cash property held by the Custodian
for the account of the 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 and shall be
identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to the Fund, the Custodian shall open and
maintain in its Company department a custody account in the name of the Company
coupled with the name of the 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 such Fund 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 the Fund and to carry out such
other provisions of this Agreement as it may determine, provided, however, that
the appointment of any such agents and maintenance of any Securities and cash of
the Fund 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 in connection with this Agreement, the Custodian wishes to appoint
other Sub-Custodians to hold property of the 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 such 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(a)(1)(iii).
(d) At the end of each calendar quarter, the Custodian shall provide
written reports notifying the Board of Directors of the placement of the
Securities and cash of the Fund with a particular Sub-Custodian and of any
material changes in the Fund's arrangements. The Custodian shall promptly take
such steps as may be required to withdraw assets of the 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 the Company that it agrees to exercise reasonable
care, prudence, and diligence such as a person having responsibility for the
safekeeping of property of the Fund. The Custodian further warrants that the
Fund's assets will be subject to reasonable care, based on the standards
applicable to custodians in the relevant market, if maintained with each
Sub-Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation: (i) the Sub-Custodian's practices,
procedures, and internal controls, for certificated securities (if applicable),
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 Fund will have jurisdiction over and be able to enforce judgments
against the Sub-Custodian, such as 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 process in the United States.
(f) The Custodian shall establish a system to monitor the appropriateness
of maintaining the Fund's assets with a particular Sub-Custodian and the
contract governing the Fund's arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Company shall deliver, or cause to
be delivered, to the Custodian all of the Fund's Securities, cash and other
assets, including (a) all payments of income, payments of principal and capital
distributions received by the Fund with respect to such Securities, cash or
other assets owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time during such
period, of Shares. The Custodian shall not be responsible for such Securities,
cash, or other assets until actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of the Fund in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Fund in any Securities
Depository or Book-Entry System, the Company shall deliver to the Custodian a
resolution of the Board of Directors , certified by an Officer, authorizing and
instructing the Custodian on an on-going basis to deposit in such Securities
Depository or Book-Entry System all Securities eligible for deposit therein and
to make use of such Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of collateral
consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of the Custodian
in such Book-Entry System or Securities Depository which includes only assets
held by the Custodian as a fiduciary, custodian or otherwise for customers.
(c) The records of the Custodian with respect to Securities of the Fund
maintained in a Book-Entry System or Securities Depository shall, by book-entry,
identify such Securities as belonging to such Fund.
(d) If Securities purchased by the Fund are to be held in a Book-Entry
System or Securities Depository, the Custodian shall pay for such Securities
upon (i) receipt of advice from the Book-Entry System or Securities Depository
that such Securities have been transferred to the Depository Account, and (ii)
the making of an entry on the records of the Custodian to reflect such payment
and transfer for the account of such Fund. If Securities sold by the Fund are
held in a Book-Entry System or Securities Depository, the Custodian shall
transfer such Securities upon (i) receipt of advice from the Book-Entry System
or Securities Depository that payment for such Securities has been transferred
to the Depository Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of such Fund.
(e) The Custodian shall provide the 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.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Company for any loss or damage to the Fund
resulting (i) from the use of a Book-Entry System or Securities Depository by
reason of any negligence or willful misconduct on the part of the Custodian or
any Sub-Custodian appointed pursuant to Section 3.3 above or any of its or their
employees, or (ii) from failure of the Custodian or any such Sub-Custodian to
enforce effectively such rights as it may have against a Book-Entry System or
Securities Depository. At its election, the Company 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 from any loss or damage to the 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 any such loss or damage.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the Fund Custody
Account but only in the following cases:
(a) For the purchase of Securities for the 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 such Sub-Custodian) of such
receipts as are required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or such Sub-Custodian) of evidence
of title thereto in favor of the 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 the Company and a bank which is a member of the Federal
Reserve System or between the Company 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;
(c) For the payment of any dividends or capital gain distributions declared
by the Fund;
(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) For the payment of any expense or liability incurred by the 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, legal fees; and other operating expenses of the Fund;
in all cases, whether or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement among
the 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 the Fund;
(g) For transfer in accordance with the provision of any agreement among
the 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 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; and
(i) 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 the
Fund Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of the Fund but only
against receipt of payment therefor in cash, by certified or cashiers check or
bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or other
similar offers for Securities of the Fund; provided that, in any such case, the
cash or other consideration is to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name of
the Fund, the Custodian or any Sub-Custodian appointed pursuant to Section 3.3
above, or of any nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other evidence representing
the same aggregate face amount or number of units; provided that, in any such
case, the new Securities are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in accordance with
the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the issuer of
such Securities, or pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement, including surrender or receipt
of underlying Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new Securities and
cash, if any, are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or reverse
repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities, and cash,
if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of the 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 the 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 the Company;
(l) For delivery in accordance with the provisions of any agreement among
the 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 Fund;
(m) For delivery in accordance with the provisions of any agreement among
the 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 Fund; or
(n) 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, certified by an Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise instructed
by the Company, the Custodian shall with respect to all Securities held for the
Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all income and
other payments to which the Fund is entitled either by law or pursuant to custom
in the securities business;
(b) Present for payment and, subject to Section 7.4 below, collect on a
timely basis the amount payable upon all Securities which may mature or be
called, redeemed, or retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect, and prepare and submit
reports to the Internal Revenue Service ("IRS") and to the Company at such time,
in such manner and containing such information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all rights and
similar securities issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper Instructions,
attend to all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with Securities and assets
of the Fund.
3.9 Registration and Transfer of Securities. All Securities held for the
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 the Fund
may be registered in the name of such Fund, the Custodian, or any Sub-Custodian
appointed pursuant to Section 3.3 above, or in the name of any nominee of any of
them, or in the name of a Book-Entry System, Securities Depository or any
nominee of either thereof. The 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 the Fund.
3.10 Records. (a) The Custodian shall maintain complete and accurate
records with respect to Securities, cash or other property held for the 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 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 the Fund as the 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, (b) All such
books and records maintained by the Custodian shall (i) be maintained in a form
acceptable to the 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
the 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 the 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
from time to time, 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.
3.12 Other Reports by Custodian. The Custodian shall provide the Company
with such reports, as the Company may reasonably request from time to time, on
the internal accounting controls and procedures for safeguarding Securities,
which are employed by the Custodian or any Sub-Custodian appointed pursuant to
Section 3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the Fund, to be
promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the 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 the Company all information received by the Custodian and pertaining to
Securities being held by the 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 the 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. The 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
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4.1 Purchase of Securities. Promptly upon each purchase of Securities for
the 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 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 the Fund, if in the Fund Custody Account there is insufficient
cash available to the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities Purchased. In
any and every case where payment for the purchase of Securities for the Fund 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 the 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 generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Fund shall bear the risk that
final payment for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person to whom they
were delivered, and the Custodian shall have no liability for any for the
foregoing.
4.5 Payment for Securities Sold, etc. In its sole discretion and from time
to time, the Custodian may credit the Fund Custody Account, prior to actual
receipt of final payment thereof, with (i) proceeds from the sale of Securities
which it has been instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Fund, and (iii) income from
cash, Securities or other assets of the Fund. Any such credit shall be
conditional upon actual receipt by the Custodian of final payment and may be
reversed if final payment is not actually received in full. The Custodian may,
in its sole discretion and from time to time, permit the Fund to use funds so
credited to the Fund Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand made by the
Custodian at any time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Fund Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Company to facilitate the
settlement of the Fund's transactions in the Fund Custody Account. Any such
advance shall be repayable immediately upon demand made by 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 or
through such bank as the Company may designate with respect to such amount in
such Proper Instructions.
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 paid 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 the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) In accordance with the provisions of any agreement among the 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
Corporation and of any registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the 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,
which constitute collateral for loans of Securities made by the Fund,
(c) 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
(d) 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 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 use its best efforts and shall
act in good faith in carrying out its obligations under this Agreement, and
shall be without liability to the Company or the Fund for any loss, damage,
cost, expense (including attorneys' fees and disbursements), liability or claim
unless such loss, damage, cost, expense, liability or claim arises from gross
negligence, bad faith or willful misconduct on its part or on the part of any
Sub-Custodian appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to rely on and may act upon advice of counsel on all matters, and shall
be without liability (except in the case of gross negligence, bad faith or
willful misconduct) 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. The Custodian shall not
be under any obligation at any time to ascertain whether the Company or the Fund
is in compliance with the 1940 Act, the regulations thereunder, the provisions
of the Company's Articles of Incorporation or By-Laws, or its investment
objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the 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 Express Duties Only. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
7.7 Co-operation. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Company to keep the books
of account of the Fund and/or compute the value of the assets of the Fund. The
Custodian shall take all such reasonable actions as the 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.
ARTICLE VIII
------------
INDEMNIFICATION
---------------
8.1 Indemnification by Company. The Company shall indemnify and hold
harmless the Custodian and any Sub-Custodian appointed pursuant to Section 3.3
above, and any nominee of the Custodian or of such Sub-Custodian, from and
against any loss, damage, cost, expense (including attorneys' fees and
disbursements), liability (including, without limitation, liability arising
under the Securities Act of 1933, the 1934 Act, the 1940 Act, and any state or
foreign securities and/or banking laws) or claim arising directly or indirectly
(a) from the fact that Securities are registered in the name of any such
nominee, or (b) from any action or inaction by the Custodian or such
Sub-Custodian (i) at the request or direction of or in reliance on the advice of
the Company, or (ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or any sub-custody agreement
with a Sub-Custodian appointed pursuant to Section 3.3 above, provided that
neither the Custodian nor any such Sub-Custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense, liability or
claim arising from the Custodian's or such Sub-Custodian's negligence, bad faith
or willful misconduct. The indemnification herein shall survive the termination
of this Agreement.
8.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Company from and against any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability (including without limitation,
liability arising under the Securities Act of 1933, the 1934 Act, the 1940 Act,
and any state or foreign securities and/or banking laws) or claim arising 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. The indemnification provided for herein
shall survive the termination of this Agreement.
8.3 Indemnity to be Provided. If the 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 the Fund for
any purpose, either at the Company's request or as otherwise contemplated in
this Agreement, or in the event that the Custodian or its nominee incurs, in
connection with its performance under this Agreement, any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim
(except such as may arise from its or its nominee's negligence, bad faith or
willful misconduct), then, in any such event, any property at any time held for
the account of such Fund shall be security therefor, and should the Fund fail
promptly to repay or indemnify the Custodian, the Custodian shall be entitled to
utilize available cash of the Fund and to dispose of other assets of the Fund to
the extent necessary to obtain reimbursement or indemnification.
ARTICLE IX
----------
COMPLIANCE WITH RULE 17f-7
--------------------------
9.1 The Custodian shall, for consideration by the Company, provide an
analysis in accordance with Rule 17f-7(a)(1)(i)(A) under the 1940 Act of the
risks associated with maintaining the Fund's foreign assets with each Securities
Depository used by the Custodian as of the date hereof (or , in the case of a
Securities Depository not used by the Custodian as of the date hereof, prior to
the initial placement of the Fund's foreign assets at such Securities
Depository) and at which any foreign asset of the Fund are held or are expected
to be held. The Custodian will also inform the Company whether holding assets in
a particular Securities Depository is voluntary or compulsory. In connection
with the foregoing, the Company shall notify the Custodian of any Securities
Depositories at which it does not choose to have its foreign assets held. The
Custodian shall monitor the custody risks associated with maintaining the Fund's
foreign assets at each such Securities Depository on a continuing basis and
shall promptly notify the Company or its investment adviser of any material
changes in such risks.
9.2 The Custodian shall exercise such reasonable care, prudence and
diligence in performing the requirements of Rule 17f-7 under the 1940 Act or, as
applicable, in selecting a sub-custodian that will perform the requirements of
Rule 17f-7, as a professional custodian having responsibility for safekeeping of
foreign assets or delegating such function to a sub-custodian would exercise.
9. 3 Based on the information available to it in the exercise of reasonable
care, prudence, and diligence, the Custodian or its designated sub-custodian
shall determine the eligibility under Rule 17f-7 of each depository and shall
promptly advise the Company if any such depository ceases to be eligible.
ARTICLE X
---------
FORCE MAJEURE; DISASTER RECOVERY SYSTEMS
----------------------------------------
10.1 Force Majeure. Neither the Custodian nor the Company 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; and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation, 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 Fund 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.
10.2 Disaster Recovery Systems. The Custodian shall maintain a disaster
recovery plan and procedures including provisions for emergency use of
electronic data processing equipment, which is reasonable in light of the
services to be provided. The Custodian shall, at no additional expense to the
Fund take reasonable steps to minimize service interruptions. The Custodian
shall have no liability with respect to the loss of data or service
interruptions caused by equipment failure, provided it maintains such plans and
procedures.
ARTICLE XI
----------
EFFECTIVE PERIOD; TERMINATION
-----------------------------
11.1 Effective Period. This Agreement shall become effective as of its
execution or when the Fund commences operations and shall continue in full force
and effect until terminated as hereinafter provided.
11.2 Termination. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than sixty (60) days after the date of the
giving of such notice. If a successor custodian shall have 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 the Funds at the successor custodian, provided that the Trust shall have paid
to the Custodian all fees, expenses and other amounts to the payment or
reimbursment of which it shall then be entitled. Upon such delivery and
transfer, the Custodian shall be relieved of all obligations under this
Agreement. The 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.
11.3 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 the Funds at such bank or
trust company all Securities of the Funds held in a Book-Entry System or
Securities Depository. Upon such delivery and transfer, such bank or trust
company shall be the successor custodian under this Agreement and the Custodian
shall be relieved of all obligations under this Agreement.
ARTICLE XII
-----------
COMPENSATION OF CUSTODIAN
-------------------------
The Custodian shall be entitled to compensation as agreed upon from time to
time by the Corporation and the Custodian. The fees and other charges in effect
on the date hereof and applicable to the Fund are set forth in Exhibit C
attached hereto.
ARTICLE XIII
------------
LIMITATION OF LIABILITY
-----------------------
It is expressly agreed that the obligations of the Company hereunder shall
not be binding upon any of the Directors, shareholders, nominees, officers,
agents or employees of the Company personally, but shall bind only the property
of the Company as provided in the Company's Articles of Incorporation, as from
time to time amended. The execution and delivery of this Agreement have been
authorized by the Company, and this Agreement has been signed and delivered by
an authorized officer of the 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 property of the
Company as provided in the Company's Articles of Incorporation.
ARTICLE XIV
-----------
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 herein
below:
To the Company:
Xxxxxx Capital Funds, Inc.
0000 X. 000xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, President
To Custodian:
U.S. Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-X0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Institutional Trust & Custody
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIV. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal, and magnetic tape.
ARTICLE XV
----------
MISCELLANEOUS
-------------
15.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
15.2 References to Custodian. The Company shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information for the Fund and such other printed matter
as merely identifies Custodian as custodian for the Fund. The Company shall
submit printed matter requiring approval to Custodian in draft form, allowing
sufficient time for review by Custodian and its counsel prior to any deadline
for printing.
15.3 No Waiver. No failure by either party hereto to exercise, and no delay
by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
15.4 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.
15.5 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.
15.6 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.
15.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
15.8 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: XXXXXX CAPITAL FUNDS, INC.
______________________________ By:_____________________________
Xxxxx X. Xxxxxx, President
ATTEST: U.S. BANK, N.A.
______________________________ By:____________________________
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Company to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
President: ___________________
Secretary: ___________________
Treasurer: ___________________
Vice President: ___________________
Adviser Employees: ___________________
___________________
Transfer Agent/Fund Accountant
Employees: ___________________
___________________
___________________
___________________
___________________
EXHIBIT B
U.S. Bank Institutional Trust & Custody Services
Standards of Service Guide
August, 2001
U.S. Bank, N.A. is committed to providing superior quality service to all
customers and their agents at all times. We have compiled this guide as a tool
for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for U.S. Bank, N.A. to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, U.S. Bank, N.A. will make every effort to
complete all processing on a timely basis.
U.S. Bank, N.A. is a direct participant of the Depository Corporation
Company, a direct member of the Federal Reserve Bank of Cleveland, and utilizes
the Bank of New York as its agent for ineligible and foreign securities.
For corporate reorganizations, U.S. Bank, N.A. utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, U.S. Bank, N.A. utilizes SEI's Bond
Source, Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and
DTC Important Notices. U.S. Bank, N.A. will not notify clients of optional put
opportunities.
Any securities delivered free to U.S. Bank, N.A., or its agents must be
received three (3) business days prior to any payment or settlement in order for
the U.S. Bank, N.A. standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide is
subject to change. Should any changes be made U.S. Bank, N.A.
will provide you with an updated copy of its Standards of Service
Guide.
U.S. BANK, N.A. SECURITY SETTLEMENT STANDARDS
Transaction Type Instructions Deadlines* Delivery Instructions
DTC 1:30 P.M. on Settlement Date DTC Participant #0000
Xxxxx Xxxx XX 00000
Institutional #________________
For Account #____________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cleveland
for U.S. Bank, N.A. ABA# 000000000
XXXXX/1050
For Account #_____________
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date Federal Reserve Bank of Cleveland
Agreement Collateral Only) for U.S. Bank, N.A. ABA# 000000000
XXXXX/1040
For Account #_____________
PTC Securities 12:00 P.M. on Settlement Date Federal Reserve Bank of Cleveland
(GNMA Book Entry) For: Firstar Bank, N.A., Company
ABA 000-000-000
XXXXX/1050
For Account Number:
Physical Securities 9:30 A.M. EST on Settlement Date Bank of New York
(for Deliveries, by 4:00 P.M. on Settlement One Wall Street- 3rd Floor - Window A
Date minus 1) Xxx Xxxx, XX 00000
For account of U.S. Bank, N.A. / Cust #117612
Attn: Xxxxxx Xxxxxx
CEDEL/EURO-CLEAR 11:00 A..M. on Settlement Date minus 2 Cedel a/c 55021
FFC: a/c 387000
U.S. Bank, N.A. /Global Omnibus
Euroclear a/c 97816
FFC: a/c 387000
U.S. Bank, N.A./Global Omnibus
Cash Wire Transfer 3:00 P.M. U.S. Bank,X.X. Xxxxx/Company ABA# 000000000
Credit Account #112950027
Account of U.S Bank, N.A. Company Services
Further Credit to ___________
Account # _______________
* All times listed are Eastern Standard Time.
U.S. BANK, N.A. PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will be
made on the immediately following business day.
U.S. BANK CORPORATE REORGANIZATION STANDARDS
Type of Action Notification to Client Deadline for Client Instructions Transaction
to U.S. Bank, N.A. Posting
Rights, Warrants, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
and Optional Mergers or receipt of notice
Mandatory Puts with Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Option to Retain or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Exchanges, or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies,
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to expiration None Upon receipt
or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be sold.
EXHIBIT C
FEE SCHEDULES
U.S. Bank Institutional Custody Services
Domestic Custody Fee Schedule
For
XXXXXX EQUITY & INCOME FUND
U.S. Bank Institutional Custody Services, as Custodian, will receive monthly
compensation for services according to the terms of the following Schedule:
I. Portfolio Transaction Fees:
---------------------------
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through
DTC or Federal Reserve $ 9.00
(c) For each portfolio transaction processed through
DTC or Federal Reserve - Advisor affirmed $ 7.50
(d) Fund of Fund trades Advisor initiated $12.00
(e) Fund of Fund Trades Custodian initiated $20.00
(f) For each portfolio transaction processed through
our New York custodian $20.00
(g) For each Amortized Security Purchase and sale $ 9.00
(h) For each Amortized Security Prin/Int Paydown $ 8.00
(i) For each covered call option/future contract written,
exercised or expired $10.00
(j) For each Cedel/Euro clear transaction $80.00
(k) For each Disbursement (Fund expenses only) $ 5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. Market Value Fee
----------------
Based upon an annual rate of: Million
.00030 (3.0 Basis Points) on First $20
.00015 (1.5 Basis Point) on Next $30
.00010 (1.0 Basis Point) on Balance
III. Monthly Minimum Fee-Per Fund $300.00
---------------------------
IV. Out-of-Pocket Expenses
----------------------
The only out-of-pocket expenses charged to your account will be
shipping fees or transfer fees.
V. XXX Documents
-------------
Per Shareholder/year to hold each XXX Document $5.00
VI. Earnings Credits
----------------
On a monthly basis any earnings credits generated from uninvested custody
balances will be applied against any cash management service fees
generated.
U S Bank Institutional Custody retains the right to be reimbursed for
out-of-pocket expenses including, but not limited to postage, insurance and long
distance telephone charges. Other services are available and prices can be
supplied upon request.
Real Time Internet Access for the client will be provided at no additional
charge.
This fee schedule is quoted based on exclusive utilization of the First American
Money Market Funds, Commercial Paper, Repurchase Agreements or Fed Discount
Notes for investment of short-term cash.
Cash Management Fee Schedule
----------------------------
For
---
Xxxxxx Equity & Income Fund
---------------------------
Services Unit Cost ($) Monthly Cost ($)
-------- ------------- ----------------
D.D.A. Account Maintenance 17.00
Deposits .42
Deposited Items .119
Checks Paid .16
Balance Reporting - P.C. Access 50.00 Prior Day Module
10.00 Per Account
.07 Per Transaction
60.00 Current Day Module
15.00 Per Account
.07 Per Transaction
ACH Transaction .105
ACH Monthly Maintenance 60.00
ACH Additions, Deletions, Changes 6.00
ACH Stop Payment 5.00
ACH Debits - Received .12
ACH Credits Received .08
Deposited Items Returned 6.00
International Items Returned 10.00
NSF Returned Checks 27.50
Stop Payments 27.50
Data Transmission per account 130.00
Drafts Cleared .18
Lockbox Maintenance 85.00
Lockbox items Processed .38
Miscellaneous Lockbox items .12
Account Reconciliation 60.00
Per Item .06
Positive Pay 75.00
Per Item .015
Invoicing for Service Charge 15.00
Wires Incoming
Domestic 11.00
International 11.00
Wires Outgoing
Domestic International
Repetitive 14.00 Repetitive 35.00
Non-Repetitive 13.00 Non-Repetitive 40.00
PC - Initiated Wires:
Domestic International
Repetitive 10.00 Repetitive 25.00
Non-Repetitive 11.00 Non-Repetitive 25.00
Customer Initiated 9.00
Uncollected Charge -- Firstar Prime Rate as of first of month plus 4% Other
available cash management services are priced separately.
