BANK ONE TRUST COMPANY, N.A.
CUSTODIAN AGREEMENT
FOR
MUTUAL FUNDS
BANK ONE TRUST COMPANY, N.A.
CUSTODIAN AGREEMENT
FOR
MUTUAL FUNDS
Execution Form
Name of Fund: XXXX FAMILY OF FUNDS, with respect to each portfolio (each a
"Portfolio) listed on Schedule B as it may be amended from time to time.
Address of Fund: c/o Countrywide Fund Services, Inc., 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxxxx, Xxxx 00000.
Execution Date:_________________________________________________________________
Effective Date:_________________________________________________________________
This Custodian Agreement is entered into on the Execution Date set forth above
effective on the Effective Date set forth above, by and between the above named
Fund ("Fund") and Bank One Trust Company, N.A. ("Custodian"), with its principal
offices located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000. In consideration
of the mutual covenants and conditions of this agreement, the Custodian and Fund
hereby agree to the Provisions of this agreement attached hereto and the
Schedules (if any) of this agreement attached hereto.
IN WITNESS WHEREOF, this agreement is executed by the Custodian and the Fund on
the Execution Date.
CUSTODIAN FUND
BANK ONE TRUST COMPANY, X.X. XXXX FAMILY OF FUNDS
BY: BY:
TITLE: TITLE:
ATTEST: ATTEST:
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BANK ONE TRUST COMPANY, N.A.
CUSTODIAN AGREEMENT
FOR
MUTUAL FUNDS
Table of Contents for Provisions
Section 1 Appointment of Custodian
Section 2 Delivery of Securities, Cash and Other Property
Section 3 Accounts
Section 4 Proper Instructions
Section 5 Payments for Shares
Section 6 Collection of Income and Short Term Investments
Section 7 Payment of Monies
Section 8 Duties of Custodian with Respect to Securities
of the Fund Held by Custodian
Section 9 Registration of Securities
Section 10 Segregated Account
Section 11 Voting and Other Action
Section 12 Transfer Taxes and Other Disbursements
Section 13 Responsibility of Custodian
Section 14 Options
Section 15 Futures Contracts
Section 16 Records and Reports
Section 17 Effective Period, Termination and Interpretive
and Additional Provisions
Section 18 Successor Custodian
Section 19 Compensation of Custodian
Section 20 Notices
Section 21 Overdrafts
Section 22 Governing Law
Section 23 Severability
Section 24 Non-Waiver
Section 25 No Third Party Benefit
Section 26 Captions
Section 27 Governed Accounts
Section 28 Entire Agreement
Section 29 Dispute Resolution
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BANK ONE TRUST COMPANY, N.A.
CUSTODIAN AGREEMENT
FOR
MUTUAL FUNDS
Provisions
These Provisions are applicable to the Custodian Agreement between the Custodian
and the Fund described in the foregoing Execution Form.
1. APPOINTMENT OF CUSTODIAN Subject to the terms and conditions of
this agreement, the Fund hereby appoints and Custodian hereby accepts such
appointment by the Fund as custodian for certain cash, securities and other
property owned by the Fund.
2. DELIVERY OF SECURITIES, CASH AND OTHER PROPERTY The Fund shall
deliver to Custodian the cash, securities and other property of the Portfolios.
Custodian shall accept for deposit hereunder additional cash, securities and
other property upon receiving written notice from Fund. The Custodian shall only
be responsible for custody hereunder of cash, securities, and other property
delivered to it and then only while they are held in and as a part of the
custodial account. All securities received by Custodian from time to time shall
be hereinafter referred to collectively as the "Securities" and shall be held by
Custodian subject to the terms and conditions of this agreement.
3. ACCOUNTS Custodian shall open and maintain a separate account or
accounts in the name of each Portfolio of the Fund, subject only to draft or
order by Custodian pursuant to the terms of this agreement, and shall maintain
in such account or accounts all cash received by it from or for the account of
the Portfolio, other than cash maintained by the Portfolio pursuant to Rule
17f-3 promulgated under the Investment Company Act of 1940 (the "40 Act").
Custodian may deposit the securities held in the account of a Portfolio:
(a) in the banking department of Custodian;
(b) in such other banks or trust companies, including
affiliates of Custodian, as Custodian may deem appropriate;
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(c) in its accounts with a clearing agency registered with the
Securities and Exchange Commission (the "Commission") under
Section 17A of the Securities Exchange Act of 1934 (the
"Exchange Act"), which acts as a securities depository (the
"Securities Depository"); or
(d) in a book-entry account which is maintained for the
Custodian by a Federal Reserve bank (the "Book Entry
Account").
So long as Custodian maintains any account pursuant to
subsections (c) and (d) above for a Portfolio, Custodian shall
comply with the requirements of Rule 17f-4, including, but not
limited to:
(i) deposit the Securities in such an account that
includes only assets held for the Portfolio;
(ii) send the Fund confirmation of any transfers to or
from the account maintained for the Portfolio;
(iii) with respect to Securities transferred to the
account of the Portfolio, identify as belonging to
the Portfolio, by book-entry or otherwise, a
quantity of such Securities in the fungible bulk of
Securities (A) registered in the name of Custodian
or its nominee, or (B) shown on Custodian's account
on the books of the Securities Depository, the
Book-Entry Account, or Custodian's agent;
(iv) promptly send to the Fund reports it receives from
the appropriate Federal Reserve Bank of Securities
Depository on its system of internal accounting
control; and
(v) send to the Fund such reports of the systems of
internal accounting control of Custodian and its
agents through which such Securities are deposited
as are available and as the Fund may reasonably
request from time to time.
4. PROPER INSTRUCTIONS For the purpose of this agreement, "proper
instructions" shall mean (a) any oral authorizations, instructions or approvals
of any kind transmitted to Custodian in person or by telephone by a person
believed in good faith by Custodian to be a person authorized by a resolution of
the Board of Trustees of the Fund to give such authorizations, instructions or
approvals on behalf of the Fund; or (b) written authorizations, instructions, or
approvals of any kind transmitted to Custodian by mail, personal delivery,
telecopy, telegram or other written means by at least two (2) persons believed
in good faith by Custodian to be persons authorized by a resolution of the Board
of Trustees of the Fund to give such authorization,
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instructions or approvals on behalf of the Fund. The Fund shall confirm any
oral authorization, instructions or approval described in (a), above, the same
business day by transmittal to Custodian of a written authorization, instruction
or approval described in (b), above.
5. PAYMENTS FOR SHARES The Fund shall be responsible for allocation of
payment for Shares of a Portfolio, issued from time to time by the Fund. Such
payments will be made instructions or approvals on behalf of the Fund. The Fund
shall confirm any oral authorization, available to the Portfolio in federal
funds as of specified times agreed upon from time to time by the Fund and
Custodian.
6. COLLECTION OF INCOME AND SHORT TERM INVESTMENTS Custodian shall
collect all income and other payments with respect to registered Securities held
hereunder to which each Portfolio shall be entitled by law or pursuant to custom
in the securities business, and shall collect all income and principal and other
payments with respect to bearer Securities if, on the date of payment by the
issuer, such Securities are held by Custodian or agent thereof, and shall
deposit such income and principal, as collected, into such Portfolio's account.
Without limiting the generality of the foregoing, Custodial shall detach and
present for payment all coupons and other income and principal items requiring
presentation as and when they become due, shall collect dividends and interest
when due on Securities held hereunder, and shall endorse and deposit for
collection, in the name of the Portfolio, checks, drafts, and other negotiable
instruments within a reasonable period of time. The Custodian is further
authorized, empowered and directed to invest, said proceeds and any other monies
not directed by the Fund or Fund's agent to be invested in short term interest
bearing or short term discount obligations to the best of Custodian's ability.
It is contemplated that the Fund will, from time to time, provide Custodian with
certain written guidelines setting forth specific short term interest bearing
and short term discount obligations which are acceptable to Fund, and Custodian
agreed to act within said guidelines.
Unless provided otherwise in written instructions from the Fund to the
Custodian, the Custodian is specifically authorized, empowered and directed to
invest any short term monies in securities of The One Group U.S. Treasury
Securities Money Market Fund and The One Group Prime Money Market Fund. The One
Group is an open-end investment company registered under the '40 Act. The fact
that the Custodian, any affiliate of the Custodian, or any affiliate of BANC ONE
CORPORATION is providing services to and receiving remuneration from the
foregoing investment company or investment trust as investment advisor,
custodian, transfer agent, registrar, or otherwise shall not preclude the
Custodian from investing in the securities of such investment company or
investment trust.
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With respect to Securities of foreign issuers, while Custodian will use its best
efforts to collect any monies which may to its knowledge become collectible
arising from such Securities including dividends, interest and other income and
principal, and to notify the Fund of any call for redemption, offer of exchange,
right of subscription, reorganization or other proceedings affecting such
Securities, it is understood that Custodian shall be under no responsibility for
any failure or delay in effecting such collections or giving such notices.
Custodian shall not be under any obligation or duty to take action to effect
collection of any amount, if the Securities (domestic or foreign) on which such
amount is payable are in default and payment is refused after due demand or
presentation. Custodian will, however, promptly notify the Fund in writing of
such default and refusal to pay.
7. PAYMENT OF MONIES Upon receipt of proper instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing instructions when
Fund and Custodian specifically agree in writing, Custodian shall pay out monies
of a Portfolio from the custodial account in the following cases only:
(a) Upon the purchase of Securities for the account of the Portfolio
by only (i) against the delivery of such Securities to Custodian (or any bank,
banking firm or trust company doing business in the United States or abroad
which is qualified under the '40 Act to act as a custodian and has been
designated by Custodian as its agent for this purpose) registered in the name of
the Portfolio or in the name of a nominee of the Fund or in the name of a
nominee of Custodian referred to in Section 9 below or in proper form for
transfer; (ii) in the case of a purchase effected through a Securities
Depository, in accordance with the conditions set forth in Section 3 above or
(iii) in the case of repurchase agreements entered into between the Fund and
another bank or broker-dealer, against delivery of Securities either in
certificate form or through an entry crediting Custodian's account at the
Federal Reserve Bank with such securities.
(b) In connection with conversion, exchange, surrender, or redemption
of securities owned by the Fund as set forth in Section 8(b) of
this agreement;
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(c) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management
accounting, transfer agent and legal fees, distribution plan
payments and other operating expenses of the Fund;
(d) For the payment of any dividends or other distributions on
shares of the Portfolio declared pursuant to the governing
documents of the Fund;
(e) In connection with options and futures contracts, as set
forth in sections 14 and 15 of this agreement, respectively; and
(f) For any other purpose of the Fund, but only upon receipt of
proper instructions from the Fund, specifying the amount of such
payment, setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be made.
Notwithstanding anything to the contrary, in connection with sales and purchases
of Securities, the Custodian is hereby authorized to debit or credit the
Portfolio's Account on contractual settlement date.
8. DUTIES OF CUSTODIAN WITH RESPECT TO SECURITIES OF THE FUND HELD BY
CUSTODIAN
(a) Holding Securities Custodian shall hold and physically
segregate for the account of each Portfolio all Securities owned
by the Fund other than securities held in a Securities Depository
or Book Entry Account, as provided in Section 3 of this
agreement.
(b) Delivery of Securities Custodian shall release and deliver
Securities owned by a Portfolio held by Custodian or in a
Securities Depository or Book Entry Account for Custodian only
upon receipt of proper instructions from the Fund on behalf of
the applicable Portfolio, which may be continuing instructions
when the Fund and Custodian specifically agree in writing, and
only in the following cases:
(i) Upon the sale of such Securities for the account of the
Portfolio and the receipt of payment therefor;
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(ii) Upon the receipt of payment in connection with any
repurchase agreement related to such Securities entered
into by the Portfolio;
(iii) In the case of a sale effected through a Securities
Depository or Book Entry Account, in accordance with the
provisions of Section 3 of this agreement;
(iv) In connection with tender or other similar offers for
Securities owned by the Portfolio, provided that, in any
such case, the cash or other consideration is to be
delivered to Custodian;
(v) To the issuer thereof or its agent when such Securities
are called, redeemed, retired, or otherwise become
payable, provided that, in any such case, the cash or
other consideration is to be delivered to Custodian;
(vi) To the issuer thereof, or its agent, for transfer into
the name of the Custodian or into the name of any nominee
or nominees of Custodian, or for exchange for a different
number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units, or for exchange of interim receipts or temporary
Securities or definitive Securities, provided that, in any
such case, the new Securities are to be delivered to
Custodian;
(vii) To the broker selling the same, against a receipt,
for examination in accordance with "street delivery"
custom provided that Custodian may adopt such procedures
to ensure their prompt return to Custodian by the broker
in the event the broker elects not to accept them;
(viii) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization,
or readjustment of the Securities of the issuer of such
Securities, or pursuant to provisions for conversion
contained in such Securities provided that, in any such
case, the new Securities and cash, if any, are to be
delivered to Custodian;
(ix) In the case of warrants, rights or similar
Securities, the surrender thereof upon the exercise of
such warrants, rights or similar Securities or the
surrender of interim receipts or temporary Securities for
definitive Securities, provided that, in any such case,
the new Securities and cash, if any, are to be delivered
to Custodian;
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(x) If the Custodian and the Fund have executed a
Securities Lending Agreement, for delivery in connection
with any loans of securities made by the Portfolio
pursuant to the terms of such Securities Lending
Agreement;
(xi) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf of the
Portfolio but only against receipt of amounts borrowed;
(xii) For delivery in accordance with the provisions of
any agreement among the Fund on behalf of the Portfolio,
Custodian and a broker- dealer registered under the
Exchange Act and a member of theNational
(xiii) For delivery in accordance with the provisions of
any agreement among the Fund on behalf of the Portfolio,
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to the
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 Portfolio;
(xiv) Upon receipt of instructions from the Transfer Agent
for the Fund, for delivery to such Transfer Agent or to
holders of Shares in connection with distributions in
kind, as may be described from time to time in one or more
currently effective prospectuses of the Fund, in
satisfaction of requests by holders of Shares
forrepurchase or redemption; and
(xv) For any other purpose of the Fund, but only upon
receipt of, in addition to proper instructions from the
Fund on behalf of the applicable Portfolio, a certified
resolution of the Board of Trustees of the Fund 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 purpose and naming the person or
persons to whom delivery of such Securities shall be made.
Notwithsanding anything to the contrary, in connection with sales and purchases
of Securities, the Custodian is hereby authorized to debit or credit the
Portfolio's Account on contractual settlement date.
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(c) Security Holdings Disclosure The Custodian is not authorized
and shall not disclose the name, address, or security positions
of the Fund in response to requests concerning shareholder
communications under Section 14 of the Securities Exchange Act of
1934, the rules and regulations thereunder, and any similar
statute, regulation or rule in effect from time to time.
9. REGISTRATION OF SECURITIES Securities held by Custodian (other than
bearer Securities) shall be registered in the name of the Fund or in the name of
any nominee of the Fund or of any nominee of Custodian, unless the Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment adviser as the
Fund. All Securities accepted by Custodian on behalf of the Fund under the terms
of this agreement shall be in "street name" or other good delivery form.
10. SEGREGATED ACCOUNT Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts for and on
behalf of each applicable Portfolio, into which account or accounts may be
transferred cash and/or Securities including Securities maintained in an account
by the Custodian pursuant to Section 3 of this agreement (a) in accordance with
the provisions of any agreement among the Fund on behalf of the Portfolio,
Custodian and a dealer or broker which is registered under the Exchange Act and
is a member in good standing of the NASD relating to compliance with the rules
of the O.C.C. 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 Portfolio; (b) for purposes of segregating
cash or government Securities in connection with options purchased or written by
the Fund or commodity futures contracts or options thereon purchase, sold, or
written by the Fund; and (c) for any other purpose, upon receipt of proper
instructions.
11. VOTING AND OTHER ACTION Custodian shall promptly deliver or mail to
the Fund all forms of proxies and all notices of meetings relating to Securities
held for the account of each Portfolio, and, upon receipt of proper
instructions, shall execute and deliver such proxies or other authorizations as
may be required. Neither Custodian nor its nominee shall vote any Securities or
execute any proxy to vote the same or give any consent to take any other action
with respect thereto (except as otherwise herein provided) unless directed to do
so by the Fund on behalf of the Portfolio upon receipt of proper instructions.
12. TRANSFER TAXES AND OTHER DISBURSEMENTS The Fund shall pay or
reimburse Custodian from time to time for any transfer taxes payable upon
transfers of Securities made hereunder, and for all other necessary and proper
disbursements and expenses made or incurred by Custodian in the performance of
its duties and obligations under this agreement. Custodian shall execute and
deliver and shall cause any Securities Depository to execute and deliver such
certificates in connection with Securities delivered to it or by it under this
agreement as may be required under the laws of any jurisdiction to exempt from
taxation any exemptible transfers and/or deliveries of any such Securities.
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13. RESPONSIBILITY OF CUSTODIAN Custodian shall be held to the exercise
of reasonable care in carrying out its obligations under this Agreement and
shall be without liability to the Fund for any loss, damage, cost, expense
(including attorney's fees and disbursement), liability or claim, unless such
loss, damage, cost, expense, liability or claim arises from negligence, bad
faith or willful misconduct on its part or on the part of any sub-custodian
appointed by Custodian. IN NO EVENT SHALL THE AGENT BE LIABLE FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES EVEN IF THE AGENT HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION OF LIABILITY
WILL APPLY REGARDLESS OF THE FORM OF ACTION, INCLUDING WITHOUT LIMITATION,
BREACH OF CONTRACT OF TORT (INCLUDING NEGLIGENCE).
Custodian shall be held harmless in acting upon proper instructions, certified
resolutions of the Board of Trustees of the Fund, or any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to be signed by the proper party or parties; and shall be entitled to
receive as conclusive proof of any fact or matter required to be ascertained by
it hereunder, a certificate by the President, Treasurer, or Secretary or
Assistant Secretary of the Fund. Custodian may receive and accept a certified
resolution of the Board of Trustees of the Fund as conclusive evidence (a) of
the authority of any person to act in accordance with such resolution or (b) of
any determination or of any action by the Board of Trustees of the Fund pursuant
to the Declaration of Trust or the Code of Regulation or the By-Laws as
described in such resolution, and such vote may be considered as in full force
and effect until receipt by Custodian of written notice from the Secretary or
Assistant Secretary to the contrary. Notwithstanding anything to the contrary,
Custodian shall have no obligation to perform market-to-market services in
connection with securities transactions, including, without limitation, options
and futures.
Custodian shall be entitled to reasonably rely upon and may act upon advice of
counsel (who may or may not be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to such
advice.
If the Fund on behalf of a Portfolio requires Custodian to take any action with
respect to Securities, which action involves the payment of monies or which
action may, in the opinion of Custodian, result in Custodian or its nominee
being liable for the payment of money or incurring liability of some other form,
the Fund on behalf of a Portfolio, as a prerequisite to requiring Custodian to
take such action, shall provide indemnity to Custodian in an amount and form
satisfactory to it.
With respect to Securities held by Custodian on behalf of a Portfolio, Custodian
shall collect all income or other payments, release and deliver such Securities,
and take any other action as directed by the Fund with respect to dividends,
splits, distributions, spin-offs, puts, calls,
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conversions, redemptions, tenders, exchanges, mergers, reorganizations, rights,
warrants or any other similar activity relating to the Securities. The Custodian
shall request direction of Fund upon receipt of actual notice of any such
activity. For purposes of this paragraph, Custodian shall be deemed to have
actual notice if any such activity is published in one or more of the following
publications: X.X. Xxxxxx'x Munibase System, Xcitek, Inc., Financial Card
Service, Standard & Poors' Called Bond Listing, Depository Trust Reorganization
Notices, and The Wall Street Journal. If Custodian does not have actual notice
of such activity, any such activity will be handled by Custodian on a "best
efforts" basis.
14. OPTIONS
(a) Purchase of Options by a Portfolio Upon the purchase
by a Portfolio of any Option (as defined below), the Fund
on behalf of the Portfolio shall promptly deliver to the
Custodian a certificate signed by an appropriate officer
of the Fund (a "Certificate") specifying with respect to
each such Option: (i) whether the Option is a put or call
Option; (ii) the name of the issuer of the securities
subject to the Option and the title and number of such
securities; (iii) the expiration date: (iv) the exercise
price; (v) the date of purchase and settlement; (vi) the
premium to be paid by the Portfolio; and (vii) the name of
the registered broker-dealer who is acting as the clearing
agent (the "Clearing Agent"). Upon receipt of a Clearing
Agent's confirmation of the purchase of the Option held by
such Clearing Agent for the account of Custodian as
custodian for the Portfolio, Custodian shall pay the
premium payable to the Clearing Agent through whom the
purchase was made; provided, that such premium conforms to
the total premium payable as set forth in such
Certificate.
(b) Sale of Options by a Portfolio Upon the sale of any
Option purchased by a Portfolio in accordance with
subsection (a) above, the Fund on behalf of the Portfolio
shall promptly deliver to Custodian a Certificate
specifying with respect to such sale: (i) the type of
Option (put or call); (ii) the name of the issuer of the
securities subject to the Option and the title and number
of such securities; (iii) the date of sale; (iv) the sales
price; (v) the date of settlement; (vi) the total amount
payable to the Portfolio upon such sale; and (vii) the
name of the Clearing Agent through whom the sale was made.
Custodian shall consent to the delivery of the Option sold
by the Clearing Agent which previously supplies the
confirmation described in subsection (a) above with
respect to such Option against payment to Custodian of the
total amount payable to the Portfolio; provided that the
same conforms to the total amount payable as set forth in
such Certificate.
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(c) Upon the exercise by the Portfolio of any Call Option
(as defined below) purchased by the Portfolio pursuant to
subsection (a) above, the Fund on behalf of the Portfolio
shall promptly deliver to Custodian a Certificate
specifying with respect to such Call Option: (i) the name
of the issuer of the securities subject to such Call
Option and the title and number of such securities; (ii)
the expiration date; (iii) the date of exercise and
settlement; (iv) the exercise price per share; (v) the
total amount to be paid by the Portfolio upon such
exercise; and (vi) the name of the Clearing Agent through
whom such Call Option was exercised. Custodian shall, upon
receipt of the securities underlying the Call Option which
was exercised,(A) pay out of the moneys held for the
account of the Portfolio the total amount payable to the
Clearing Agent through whom the Call Option was exercised;
provided that the same conforms to the total amount
payable as set forth in such Certificate, and (B) delete
the exercised Call Option from the statements delivered to
the Fund pursuant to Section 16 of this agreement.
(d) Upon the exercise by a Portfolio of any Put Option (as
defined below) purchased by the Portfolio pursuant to
subsection (a) hereof, the Fund on behalf of the Portfolio
shall deliver to Custodian a Certificate specifying with
respect to such Put Option: (i) the name of the issuer of
the securities subject to such Put Option and the title
and number of such securities; (ii) the expiration date;
(iii) the date of exercise and settlement; (iv) the
exercise price per share; (v) the total amount to be paid
to the Portfolio upon such exercise; and (vi) the name of
the Clearing Agent through whom such Put Option was
exercised. Custodian shall upon receipt of the amount
payable upon the exercise of the Put Option (A) deliver or
cause the Securities Depository or Book Entry Account to
deliver, out of the account of the Portfolio to which such
Put Option was allocated, the securities which were
subject to such Put Option; provided that the same
conforms to the amount payable to the Portfolio as set
forth in such Certificate, and (B) delete the exercised
Put Option from the statements to be delivered to the Fund
pursuant to Section 16 of this agreement.
(e) Whenever a Portfolio writes a Covered Call Option (as
defined below) with respect to securities held by
Custodian hereunder, the Fund on behalf of the Portfolio
shall promptly deliver to Custodian a Certificate
specifying with respect to such Covered Call Option: (i)
the name of the issuer of the securities subject to such
Covered Call Option and the title and number of such
securities; (ii) the expiration date; (iii) the exercise
price; (iv) the premium to be received by the Portfolio;
(v) the date such Covered Call Option was written; and
(vi) the name of the Clearing Agent through whom the
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premium is to be received. Custodian shall deliver or
cause to be delivered, in exchange for receipt of the
premium specified in the Certificate with respect to such
Covered Call Option, such receipts as are required in
accordance with the customs prevailing among brokers in
Covered Call Options, and shall impose, or direct the
Securities Depository or Book Entry Account to impose,
upon the underlying securities specified in the
Certificate such restrictions as may be required by such
receipts.
(f) Whenever Covered Call Option written by a Portfolio
and described in the preceding subsection (e) is
exercised, the Fund on behalf of the Portfolio shall
promptly deliver to Custodian a Certificate instructing
Custodian to deliver, or to direct the Securities
Depository or Book Entry Account to deliver, the
securities subject to such Covered Call Option and
specifying: (i) the name of the issuer of the securities
subject to such Covered Call Option and the title and
number of such securities; (ii) the Clearing Agent to whom
the underlying securities are to be delivered; and (iii)
the total amount payable to the Portfolio upon such
delivery. Upon the return and/or cancellation of any
receipts delivered pursuant to subsection (e) hereof,
Custodian shall deliver, or cause the Securities
Depository or Book Entry Account to deliver, the
underlying securities as specified in the Certificate for
the amount to be received as set forth in such
Certificate.
(g) Whenever a Portfolio purchases any Option identical to
a previously written Covered Call Option described in
subsection (e) hereof in a transaction expressly
designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Fund
on behalf of the Portfolio shall promptly deliver to
Custodian a Certificate specifying with respect to the
Option being purchased: (i) that the transaction is a
Closing Purchase Transaction; (ii) the name of the issuer
of the securities subject to such Option and the title and
number of such securities; (iii) the exercise price; (iv)
the premium to be paid by the Portfolio; (v) the
expiration date; (vi) the date of such purchase; and (vii)
the name of the Clearing Agent to whom the premium is to
be paid. Upon Custodian's payment of the premium and the
return and/or cancellation of any receipt issued pursuant
to subsection (e) of this Section 14 with respect to the
Covered Call option being liquidated through the Closing
Purchase Transaction, Custodian shall (A) remove, or
direct the Securities Depository or Book Entry Account to
remove, the previously imposed restriction on the
securities underlying the Covered Call Option, and (B)
delete such Option from statements delivered to the Fund
by Custodian pursuant to Section 16 of this agreement.
- 15 -
(h) Upon the expiration of any Option purchased by a
Portfolio pursuant to subsection (a) of this Section 14 or
any Covered Call Option written by a Portfolio and
described in subsection (e) of this Section 14, Custodian
shall (i) delete such Option from the statements delivered
to the Fund pursuant to Section 16 of this agreement and,
if such expired Option was a Covered Call Option written
by the Portfolio, (ii) free, or instruct the Securities
Depository or Book Entry Account to free, the Securities
underlying such Covered Call Option from the restrictions
imposed by receipts issued in connection therewith.
(i) For purposes of this Section 14, the following terms
shall have the meanings as set forth below:
(i) "Option" shall mean a Call Option, Covered Call
Option and/or Put Option.
(ii) "Call Option" shall mean an option entitling the
holder thereof, upon timely exercise and payment of
the exercise price, as specified therein, to purchase
from the writer of such Call Option the specified
underlying Securities.
(iii) "Covered Call Option" shall mean an option
entitling its holder, upon timely exercise and
payment of the specified exercise price, to purchase
from the writer of such Covered Call Option the
specified underlying Securities which are owned by
such writer and are subject to appropriate
restrictions.
(iv) "Put Option" shall mean an option entitling the
holder thereof, upon timely exercise and tender of
the specified underlying Securities, to sell such
Securities to the writer of such Put Option for the
specified exercise price.
15. FUTURES CONTRACTS
(a) Whenever a Portfolio shall enter into a Futures
Contract (as defined below) to be held by Custodian under
this agreement, the Fund on behalf of the Portfolio shall
deliver to Custodian a Certificate specifying with respect
to such Futures Contract: (i) the category of Futures
Contract (the name of the underlying stock index or
financial instrument); (ii) the number of identical
Futures Contracts entered into; (iii) the delivery of
settlement date of the Futures Contract; (iv) the date the
Futures Contract was entered into; (v) whether the Fund is
buying (going long) or selling (going short) on such
Futures Contract; (vi) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited by
Custodian in a - 16 - margin account with respect to such
Futures Contract and the name in which the margin account
has been, or is to be, established; (vii) the name of the
- 16 -
broker, dealer, or futures commission merchant through
whom the Futures Contract was entered into; and (viii) the
amount of fee or commission, if any, to be paid to the
broker, dealer, or futures commission merchant. Custodian
shall upon receipt of such broker's, dealer's, or futures
commission merchant's statement confirming the purchase
(creation of a long position) or sale (creation of a short
position) of a Futures Contract which is held by such
broker, dealer, or futures commission merchant in the name
of Custodian (or of a duly appointed and registered
nominee of Custodian or a designated depository or its
nominee) as custodian for the Portfolio, make payment of
the fee or commission, if any, specified in the
Certificate and deposit in such margin account the amount
of cash and/or the amount and kind of securities specified
in such Certificate.
(b) The Portfolio shall, from time to time, make such
additional deposits to, or withdrawals from, a margin
account as specified in a Certificate received by
Custodian. Such Certificate shall specify the amount of
cash and/or the amount and kind of Securities specifically
to be deposited in, or withdrawn from, a specified margin
account. In the event that the Fund fails to specify in a
Certificate the name of the issuer, the title and the
number of shares or the principal amount of any particular
Securities to be deposited by Custodian in a margin
account, Custodian shall not be under any obligation to
make any such deposit and shall so notify the Fund.
(c) Custodian shall make deliveries or payments from a
margin account to the broker, dealer, or futures
commission merchant in whose name, or for whose benefit,
the account was established only upon the receipt of a
certificate specifying the broker, dealer, or futures
commission merchant to whom such payment or delivery is to
be made, the amount of money and/or the amount and kind of
securities to be paid or delivered, and the date on which
such payment or delivery is to be made. After receipt of
such a Certificate, Custodian shall make the payments
and/or deliveries to the broker, dealer, or futures
commission merchant therein specified.
(d) Whenever a Futures Contract held by Custodian
hereunder is retained by a Portfolio until delivery or
settlement is made on such Futures Contract, the Fund on
behalf of the Portfolio shall deliver to Custodian a
Certificate specifying: (i) the Futures Contract; (ii)
with respect to a Stock Index Futures Contract (as defined
below), the total cash settlement amount to be paid or
received, and with respect to a Financial Futures Contract
(as defined below), the Securities and/or amount of cash
to be delivered or received; (iii) the broker, dealer, or
futures commission merchant to or - 17 - from whom payment
or delivery is to be made or received; and (iv) the amount
of cash and/or Securities to be withdrawn from the related
margin account. Upon the receipt of a broker's, dealer's,
or futures commission merchant's statement or confirmation
reasonably believed by Custodian to be in the form
customarily used by brokers, dealers or futures commission
merchants confirming that the Futures Contract is being
settled and that the Portfolio's position in such Futures
Contract is thereby terminated, Custodian shall make the
payment or delivery specified in the Certificate, and
delete such Futures Contract from the statements delivered
to the Fund pursuant to Section 16 of this agreement.
- 17 -
(e) Whenever a Portfolio shall enter into a Futures
Contract to offset a Futures Contract held by Custodian
hereunder, the Fund on behalf of the Portfolio shall
deliver to Custodian a Certificate specifying: (i) the
items of information required in a Certificate described
in subsection (a) above, and (ii) the Futures Contract
being offset. Custodian shall, upon receipt of a broker's,
dealer's. or futures commission merchant's statement or
confirmation reasonably believed by Custodian to be in the
form customarily used by brokers, dealers, or futures
commission merchants confirming the offsetting
transaction, make payment of the fee or commission, if
any, specified in the Certificate and delete the Futures
Contract being offset from the statements delivered to the
Fund pursuant to Section 16 of this agreement.
(f) Custodian shall accept cash and/or Securities tendered
or delivered by a broker, dealer, or futures commission
merchant in connection with any Futures Contract held by
Custodian hereunder when instructed to accept such cash
and/or Securities in a Certificate. Such Certificate shall
instruct Custodian where to deposit such cash and/or
Securities.
(g) For purposes of this Section 15, the following terms
shall have the meanings set forth below:
(i) "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contract.
(ii) "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities,
including U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds, Government National Mortgage
Association mortgage-backed securities and commercial
paper, at a specified time at an agreed upon price.
- 18 -
(iii) "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties
agree to take or make delivery of an amount of cash
equal to a specified dollar amount times the
difference between the value of a particular stock
index at the close of the last business day of the
contract and the price at which the Futures Contract
is originally struck.
16. RECORDS AND REPORTS Fund hereby acknowledges that it may have the
right to receive broker confirmations within the time period prescribed by 12
C.F.R. Section 12.5 at no additional cost. In lieu of receiving such
confirmations within such time period, Custodian and Fund agree to the
alternative procedures set forth below.
Custodian shall create and maintain records relating to its activities and
obligations under this agreement in such manner as will meet the obligations of
the Fund under the '40 Act, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, applicable Federal and State tax laws and any
other law or administrative rules or procedures which may be applicable to the
Fund and employees and agents of the Securities and Exchange Commission. All
such records shall remain the property of the Fund, shall be subject to the
provisions of Section 13 of this agreement, and shall be open to the inspection
and audit as reasonable times by duly authorized officers, employees or agents
of the Fund. Custodian shall, at the Fund's request, supply the Fund with a
tabulation of Securities owned by each Portfolio and held by Custodian and shall
supply to the Fund a report from time to time as parties shall agree of all
monies received or paid on behalf of each Portfolio and of the resultant cash
balance, a list of all security transactions that remain unsettled at such time,
and such other reports as the Fund may reasonably request.
17. EFFECTIVE PERIOD, TERMINATION AND INTERPRETIVE AND ADDITIONAL
PROVISIONS This agreement shall become effective as of the date first set forth
in this agreement, and may be terminated by either party by 60 days advance
written notice delivered pursuant to Section 20 of this agreement to the other
party.
Upon termination hereof, the Fund shall pay to Custodian such compensation as
may be due as of the date of such termination, and shall likewise reimburse
Custodian for its costs, expenses and disbursements as of the date of such
termination as contemplated by this agreement.
In connection with the operation of this agreement, Custodian and the Fund may
agree from time to time on such provisions interpretive or in addition to the
provisions of this agreement as may in their joint opinion be consistent with
the general tenor of this agreement. Any such interpretive or additional
provisions shall be signed by both parties and annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
Federal or State regulations, or any provision of the Declaration of Trust and
By-Laws of the Fund as the same may from time to time be amended.
- 19 -
18. SUCCESSOR CUSTODIAN If a successor custodian for the Fund, or one
or more of the Portfolios is appointed by the Board of Trustees of the Fund,
Custodian shall, upon termination, deliver to such successor custodian, duly
endorsed and in form for transfer, all Securities of each applicable Portfolio
then held hereunder and all other property of the applicable Portfolio(s)
deposited with or held by it hereunder and Custodian shall be released of all
duties and obligations under this agreement.
If no such successor custodian is appointed and this agreement is terminated
pursuant to Section 17 of this agreement, Custodian shall, in like manner, at
its office, upon receipt of a certified resolution of the Board of Trustees of
the Fund, deliver such property in accordance with such resolution.
In the event that no written order designating a successor custodian or
certified copy of a resolution of the Board of Trustees of the Fund shall have
been delivered to Custodian on or before the date when such termination shall
become effective, then Custodian shall have the right to deliver to a bank or
trust company of its own selection qualified to act as a custodian under the '40
Act, all property of applicable Portfolios held by Custodian, under this
agreement. Thereafter, such bank or trust company shall be the successor of
Custodian under this agreement and Custodian shall be released of all duties and
obligations under this agreement. Alternatively, Custodian shall have the right
to commence as action in the nature of an interpleader, and seek to deposit the
property in a court of competent jurisdiction.
19. COMPENSATION OF CUSTODIAN Custodian shall be entitled to
compensation for its services as set forth in Schedule A attached hereto and
made a part hereof as amended by Custodian from time to time (the "Fee
Schedule") and for reimbursement of its out of pocket expenses.
20. NOTICES Any notices required or desired to be given to any party
hereto shall be in writing, shall be addressed to such other party at that
party's address set forth at the beginning of this agreement and shall be deemed
given when deposited in the United States mail, certified, return receipt
requested, or actually received by the party to whom it was addressed if
delivered by an alternate method. Any party may change the address to which
notices or other communications are to be given by giving the other parties
notice of such change.
21. OVERDRAFTS Any Securities purchased in anticipation of the delivery
of cash on behalf of the Portfolio shall not be credited to the Account of the
Portfolio if such cash is not actually received by the Custodian by the
anticipated delivery date. In such event, Custodian may, in its sole discretion,
advance the necessary funds to complete the transaction and immediately shall
notify the Portfolio of the foregoing. Upon receipt of such notification, the
Portfolio shall wire such funds to the Custodian, in such amount as agreed upon
by the Fund and Custodian to make the Custodian whole in connection with the
shortfall, by 1:00 p.m. eastern standard time on the day the notification is
received or, alternatively, instruct the Custodian to sell Securities in the
Portfolio's account in the amount agreed. Upon Custodian's receipt of the
- 20 -
funds representing the shortfall, the subject Securities will be credited to the
Portfolio's account. If the Custodian has not received funds in the amount
necessary to cover the shortfall in the Portfolio's account within two days
following notification, Custodian is authorized to sell the subject Securities
and retain that portion of the proceeds necessary to make the Custodian whole,
and shall credit any remaining proceeds to the Account of the Portfolio.
22. GOVERNING LAw This agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of Ohio.
23. SEVERABILITY The intention of the parties to this agreement is to
comply fully with all laws, rules, regulations and public policies, and this
agreement shall be construed consistently with all laws, rules, regulations and
public policies to the extent possible. If and to the extent that any court of
competent jurisdiction determines it is impossible to construe any provision of
this agreement consistently with any law, rule, regulation or public policy and
consequently holds that provision to be invalid, such holding shall in no way
affect the validity of the other provisions of this agreement, which shall
remain in full force and effect.
24. NON-WAIVER No failure by any party to insist upon compliance with
any term of this agreement, to exercise any option, enforce any right, or seek
any remedy upon any default of any other party shall affect, or constitute a
waiver of, the first party's right to insist on such strict compliance, exercise
that option, enforce that right, or seek that remedy with respect to that
default or any prior, contemporaneous, or subsequent default. No custom or
practice of the parties at variance with any provision of this agreement shall
affect or constitute a waiver of, any party's right to demand strict compliance
with all provisions of this agreement.
25. NO THIRD PARTY BENEFIT This agreement is intended for the exclusive
benefit of the parties to this agreement and their respective successors and
assigns, and nothing contained in this agreement shall be construed as creating
any rights or benefits in or to any third party.
26. CAPTIONS The captions of the various sections of this agreement are
not part of the context of this agreement, but are only labels to assist in
locating those sections and shall be ignored in construing this agreement.
27. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the parties and may not be modified or amended except by a writing
signed by the party to be charged, except as otherwise provided herein.
28. DISPUTE RESOLUTION AND ARBITRATION. Any controversy or claim
arising out of or relating to this agreement, or the breach of the same, shall
be settled through consultation and negotiation in good faith and a spirit of
mutual cooperation. However, if those attempts fail, the
- 21 -
parties agree that any misunderstandings or disputes arising from this agreement
shall be decided by arbitration which shall be conducted, upon request by either
party, before three (3) arbitrators (unless both parties agree on one (1)
arbitrator) designated by the American Arbitration Association (the "AAA"), in
accordance with the terms of the Commercial Arbitration Rules of the AAA, and,
to the maximum extent applicable, the United States Arbitration Act (Title 9 of
the United States Code), or if such Act is not applicable, any substantially
equivalent state law. The parties further agree that the arbitrator(s) will
decide which party must bear the expenses of the arbitration proceedings.
CUSTODIAN FUND
BANK ONE TRUST COMPANY, X.X. XXXX FAMILY OF FUNDS
By:________________________ By:________________________________
Title:_____________________ Title:_____________________________
Attest:____________________ Attest:____________________________
BANK ONE TRUST COMPANY, N.A.
STANDARD CUSTODY AGREEMENT
SCHEDULE A
FEE SCHEDULE
This Schedule A sets forth the compensation agreed upon by XXXX FAMILY
OF FUNDS to be paid to Bank One Trust Company, N.A. (the "Custodian") pursuant
to the terms and conditions of Section 14 of the Standard Custody Agreement
Effective ____________, 1997 and executed by such parties. Any changes to the
fee schedule shall be by execution of a new Schedule A.
Custody Fees
Base Fee (per portfolio) $400
Transactions (per transaction) $5 DTC/FRB Eligible
$20 DTC/FRB Ineligible
$5 Principal Paydowns
Market Value Fee (annual) .0l% Of Market Value
This fee schedule shall not be amended by Custodian for a period of three years
from the Effective Date hereof.
Effective Date of this Fee Schedule: April 1, 1997
CUSTODIAN PRINCIPAL
Bank One Trust Company, X.X. XXXX FAMILY OF FUNDS
By:_________________________ By:_____________________________
Printed Name:_______________ Printed Name:___________________
Title:______________________ Title:__________________________
Dated:______________________ Dated:__________________________
SCHEDULE B
LIST OF PORTFOLIOS
LARGE CAP VALUE FUND
SMALL CAP VALUE FUND
BALANCED FUND
