THE NORTHERN TRUST COMPANY
DEPOSITORY CUSTODY AGREEMENT
The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
RE: DEPOSITORY CUSTODY SERVICE-ACCOUNT NO. 17-88265
Gentlemen:
We hereby request that you serve as our custodial agent for all cash,
securities and other property that we deliver to you from time to time for
safekeeping and processing on our behalf in accordance with this Depository
Custody Agreement (the "Agreement"). Your appointment hereunder will
become effective upon your acceptance of this request.
1. Custody Account. You will establish and maintain a custodial
account (the "Account") in our name and will record as credits to that
account all cash, securities and other property, both foreign and domestic,
that we deliver, or that we direct others to deliver, to you for that
purpose. You will separately identify the Account on your books by the
number 17-88265 and by the name "The Canandaigua Bond Fund".
2. Account and Custody Operations. You will hold in custody for
safekeeping, pending transfer from the Account pursuant to our
instructions, all the cash, securities and other property delivered to you
for credit to the Account. You may hold such securities or other property
in your name or in the name of your nominee, and you may place securities
or other property credited to the Account in a securities depository,
clearing corporation, federal book-entry securities account, or other third
party facility, whether foreign or domestic. You may return to us any
securities or other properties that are not accepted for deposit or
recordation by the relevant third-party agent or facility, securities
depository, clearing corporation, or federal book-entry system, or that
cannot be re-registered in your nominee name or held by you in bearer form.
If, in connection with your use of such agents and facilities, you are
required to follow specified operational procedures and time frames, we
agree that those procedures and time frames will be binding on us in
respect of Account activity. In addition, both you and we will carry out
processing duties under this Agreement in accordance with The Northern
Trust Company's Depository Custody Services Operations Manual (the
"Operations Manual") as updated by you from time to time. On your
acceptance of our request, you will supply us with a copy of the Operations
Manual, which we have previously reviewed. During the term of this
Agreement, you will provide us promptly with all material changes that are
made to the Operations Manual.
You will collect income, noncash distributions, and maturing principal
on the assets credited to the Account when paid or distributed and will
retain such collections, together with any other cash credited to the
Account, in the form(s) and in depository facilities you deem appropriate,
including deposit accounts in your banking department, subject to our
specific direction. If any noncash distribution represents a fractional
share or other interest, you are authorized, but not required, to liquidate
such fraction, collect the liquidation proceeds, and credit the account
with the cash received.
You will use your best efforts to provide us with timely notice of
corporate actions or other events that involve assets credited to the
Account and that require the exercise of discretion in providing necessary
instructions or making necessary responses to the issuer or a third party.
We will assume the responsibility to forward such notices on a timely basis
to the appropriate person for decision-making and provide you with timely
instructions regarding the action to be taken (except that we will assume
full responsibility to communicate any proxy vote directly to the proxy
agent). If any securities credited to the Account are called for partial
redemption, you may allot the called portion or cause such portion to be
allotted among your account holders, including us, in any manner you
consider equitable. With respect to nondiscretionary corporate actions or
other nondiscretionary events, you may act as you consider appropriate on a
best-efforts basis, subject to any instructions we timely communicate to
you.
You will effect transfers of property credited to the Account,
including transfers incident to settlement of purchase and sale
transactions involving Account assets that we or our agents initiate, at
such times and to such persons as we or our agents direct. We or our
agents will provide you with transaction settlement instructions either in
written or electronic form. In any case, all instructions will be deemed
communicated to you only if made in accordance with governing rules and
procedures of the relevant third-party agent, securities depository,
clearing corporation, or book-entry system and the Operations Manual. We
will assume sole responsibility to assure that only authorized individuals
provide you with instructions respecting all transactions involving Account
assets, including, but not limited to, transaction settlements, asset
transfers, and cash transfers or disbursements, and you will provide us
with notice of instructions you receive from third parties pursuant to the
time frames and procedures specified in the Operations Manual. Absent an
authorized individual's timely disavowal of any instructions you receive,
you may rely conclusively and act on all instructions you receive (see
Appendix A).
We authorize you to execute and deliver in our name any assignments,
stock or bond powers or other documents or instruments which you deem
necessary or convenient and proper (a) to sell, assign, transfer, or make
other disposition of any security or other property in the Account; (b) to
take any action in relation to any such security or property; or (c) to
obtain any payment due. You may execute any and all documents by signing
our name alone or as our attorney-in-fact pursuant to this authorization.
You are not obligated to follow any instruction to purchase securities
or other property that is to be delivered for credit to the Account, or to
transfer cash credited to the Account unless sufficient cash is on deposit
and credited to the Account at the time specified in the Operations Manual
to enable payment in full, nor are you obligated to sell properties
credited to the Account unless the properties are in good deliverable form.
Notwithstanding the foregoing, you may in your sole discretion advance for
the benefit of our Account cash needed to settle a purchase transaction or
for such other purposes as we may request. We will consider any such
advance to be an interest-bearing loan from the date of the advance until
the date of repayment in full (including accrued interest) of such advance,
and we agree to pay interest on the unpaid principal amount of the advance
from time to time outstanding at a rate equal to two percent (2.00%) in
addition to the "Prime Rate," which shall mean that rate of interest per
year announced from time to time by The Northern Trust Company, Chicago
("Northern"), called its prime rate, which may not at any time be the
lowest rate of interest charged by Northern. Changes in the rate of
interest resulting from a change in the Prime Rate shall take effect on the
date set forth in each announcement.
3. ACCOUNT RECORDS AND REPORTS. You will keep complete, accurate
and current records of all receipts, disbursements and transfers in respect
of Account assets. We or our designee may examine such records at any
reasonable time during your normal business hours.
You will furnish us with daily electronic reports showing receipts,
disbursements and transfers in respect of Account assets, trade
settlements, and Account assets as of the close of the prior business day.
Securities listed will be appropriately identified in terms of number of
shares, par value, principal amount, or other customary identifiers. We
will give you written or electronic notice of any exceptions to a report
within 30 days of the date of the report. Thereafter, all unexcepted
entries in a report will be considered final and binding on us.
4. REPRESENTATIONS AND SPECIAL UNDERTAKINGS. We represent to you
that all cash, securities and other property delivered to you for credit to
the Account constitute the assets of trust and agency accounts we
administer. We are solely responsible for the maintenance of separate
books and records respecting ownership of those assets and for the
allocation of income and principal among our accounts. We understand that
you, necessarily, will commingle the assets of our various accounts that
are delivered to you for Credit to the Account, and will commingle, in each
omnibus agency account you maintain with each third party agent,
depository, book-entry system administrator, or other central repository,
assets credited to the Account with assets of other persons for whom you
act as custodian.
We will be responsible to you as a principal for all our obligations
under this Agreement and for all actions you take on our behalf hereunder,
and we warrant that we have, or will take all necessary steps to have,
authority to effect any instruction we give you and any deposit we make in
the Account.
You will not be liable to us for any loss that occurs as a result of
any action taken or not taken under this Agreement so long as you act, or
refrain from acting, in good faith and in the absence of gross negligence,
provided, however, that you will not be liable to us under any
circumstances for (a) any loss that may result from any action taken or not
taken based on an oral instruction from us or our agent or an instruction
that is not communicated to you in a timely manner pursuant to the
procedures set forth in the Operations Manual, (b) investment losses that
may result from any action you take or refrain from taking under this
Agreement, or (c) losses attributable to defaults or insolvencies by any
agent we designate. We agree to indemnity you and hold you harmless from
any loss or liability you incur in taking or not taking action under the
Agreement except losses and liabilities attributable to your bad faith or
gross negligence. We acknowledge that you have no obligation hereunder to
render investment advice or to act or to refrain from acting with reference
to investment considerations.
5. ENTIRE AGREEMENT; ACKNOWLEDGMENTS. This Agreement represents the
entire agreement between you and us with respect to our use of your custody
services, and supersedes any previous oral or written agreements in
relation thereto. This Agreement does not cover our use of options, unless
the separate Options Sub-Agreement has been executed and made an attachment
hereto. This Agreement does not cover any other agency services you
provide us, including securities lending services, absent an express
written agreement to the contrary.
6. CUSTODIAN FEES AND EXPENSES. We will pay you for your services
as custodian in amounts and at intervals set forth in your schedule of fees
current from time to time, and will reimburse you for all reasonable
expenses, including accounting and legal expenses, incident to
administering the Account under this Agreement (see Appendix B). You may
collect payment for your fees and expenses by debits to the Account. You
will give us 60 days' advance written notice of fee changes.
7. TERM AND TERMINATION OF THIS AGREEMENT. This Agreement, which
shall
remain in effect until terminated, may be terminated at any time following
30 days' advance written notice from us to you or you to us. At the end of
the 30-day termination period, we will promptly return your Operations
Manual, and you will promptly deliver to us or to such other person as we
direct all assets credited to the Account, less fees due and expenses not
paid, including expenses incident to termination of the Account, together
with a closing statement.
8. MODIFICATIONS. This Agreement may be amended or modified only by
a writing signed by you and by us, except that fees may be changed and the
Operations Manual may be modified at any time as provided in paragraphs 6
and 2 above.
9. GOVERNING LAW: SEVERABILITY. This Agreement shall be governed by
the internal law of the State of Illinois. If any provision of this
Agreement is invalid, the balance of the Agreement shall be considered
severable and independently enforceable.
Dated this 4th day of December, 1997.
ACCEPTED:
THE CANANDAIGUA THE NORTHERN TRUST COMPANY
BOND FUND
By: /s/ Xxxxxx X. Xxxxxxxx By:____________________________
As its Secretary and Treasurer As its__________________________
Tax Identification No.____________
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