CUSTODIAN AGREEMENT
SATURNA INVESTMENT TRUST
SEXTANT SHORT-TERM BOND FUND
This CUSTODIAN AGREEMENT, effective September 28,1995, between the Sextant
Short-Term Bond Fund of Saturna Investment Trust, one of the separate Funds of
the Trust, organized under the Washington State Business Trust Act, (hereinafter
called the "Fund"), and National City Bank, Indiana (hereinafter called the
"Custodian"),
WITNESSETH:
WHEREAS, the Fund desires that its securities and cash shall be hereafter held
and administered by the Custodian pursuant to the terms of this Agreement:
NOW, THEREFORE, in consideration of the mutual agreements herein made, the Fund
and the Custodian agree as follows:
Section 1. Definitions
The word "Securities" as used herein includes stocks, units, options, notes,
mortgages or other obligations and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase, or subscribe for the same,
or evidencing or representing any other rights or interests therein, or in any
property or assets.
The words "Officers' Certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
Chairman of the Executive Committee, the President, a Vice President, the
Secretary and the Treasurer of the Trust on behalf of the Fund, or any other
persons duly authorized to sign by the Board of Trustees or the Executive
Committee of the Trust.
The term "Book-Entry System" shall mean the Federal Reserve / Treasury
book-entry system for the United States and federal agency Securities, its
successor or successors and its nominee or nominees, and the term "Depository"
shall mean a Depository Trust Company ("DTC") a clearing agency registered with
the Securities and Exchange Commission, its successor or successors and its
nominee or nominees, provided the Custodian has received a certified copy of a
resolution of the Trust's Board of Trustees specifically approving deposits in
the Book-Entry System or DTC, as the case may be. The term "Depository" shall
further mean and include any other registered clearing agent, successor or
successors and its nominee or nominees, specifically identified in a certified
copy of a resolution of the Trust's Board of Trustees approving deposits therein
by the Custodian.
Section 2. Names, Titles and Signatures of Trust's Officers
A. The Secretary of the Trust will certify to the Custodian the names and
signatures of those persons authorized to sign the Officers' Certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees and the Executive Committee thereof, together with any changes which
may occur from time to time.
B. Authorized Oral Instructions - Appropriate certifications will be provided to
the Custodian for any oral instructions. The Custodian shall have no
responsibility for the adequacy or accuracy of such instructions received from
the Fund and shall incur no liability for, and shall be entitled to rely upon,
any such instructions which the Custodian believes in good faith are given by an
Authorized Representative.
Section 3. Receipt and Disbursement of Money
A. The Custodian shall open and maintain a separate account or accounts in the
name of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement. The Custodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Fund. The Custodian shall make payments of cash
to, or for the account of the Fund from such cash only (a) for the purchase of
Securities for the Fund upon the delivery of such Securities to the Custodian,
registered in the name of the Fund or the nominee of the Custodian referred to
in Section 9 or in proper form for transfer, (b) for the purchase or redemption
of Shares of the Fund upon delivery thereof to the Custodian, (c) for the
payment of interest, dividends, taxes, management or supervisory fees or
operating expenses (including, without limitation thereto, fees for legal,
accounting and auditing services), (d) for payments in connection with the
conversion, exchange or surrender of Securities to the Custodian, or (e) for
other proper trust purposes. Before making any such payment, the Custodian shall
receive (and may rely upon) an Officers' Certificate requesting such payment and
stating that it is for a purpose permitted under the terms of items (a), (b),
(c) or (d) of this subsection A, and also, in respect of item (e), upon receipt
of an Officers' Certificate and a certified copy of the resolution of the Board
of Trustees or of the Executive Committee of the Trust signed by an Officer of
the Trust and certified by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose for which payment is to be
made, declaring such purpose to be a proper Trust purpose, and naming the person
or persons to whom such payment is to be made.
B. The Custodian is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received by the Custodian for the
account of the Fund.
Section 4. Receipt of Securities
The Custodian, or its sub-custodian as provided in Section 9, shall provide that
all Securities received by it for the account of the Fund shall be held in a
separate account and physically separated at all times from those of any other
person. All such Securities are to be held or disposed by the Custodian, or its
sub-custodians for and subject at all times to the instructions of the Fund
pursuant to the terms of this Agreement. The Custodian, or its sub-custodians,
shall have no power or authority to assign, hypothecate, pledge, or otherwise
dispose of any such Securities and investments, except pursuant to the direction
of the Fund and only for the account of the Fund as set forth in Section 5 of
this Agreement.
Section 5. Transfer, Exchange, Registration, Redelivery,
etc. of Securities
The Custodian shall have sole power to release or deliver Securities of the Fund
held by it pursuant to this Agreement.
A. All Securities held for the Fund, which are issued or issuable only in bearer
form, except such Securities as are held in the Book-Entry System, shall be held
by the Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Fund, in the name of any duly appointed registered
nominee of the Custodian, as the Custodian may from time to time determine, or
in the name of the Book-Entry System or a Depository or their successor or
successors, or their nominee or nominees. The Fund agrees to 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 its registered nominee
or in the name of the Book-Entry System or a Depository any Securities which it
may hold for the account of the Fund. The Custodian shall hold all such
Securities which are not held in the Book-Entry System or in a Depository in a
separate account in the name of the Fund, physically segregated at all times
from those of any other person or persons.
B. The Fund shall instruct the Custodian from time to time in its sole
discretion, by means of an Officers' Certificate signed in the name of the Fund
by two Officers in accordance with the provisions of Section 1, as to the manner
in which and in what amounts such Securities and moneys are to be deposited on
behalf of the Fund in the Book-Entry System or a Depository, as each term is
defined in Section l; provided, however, that prior to the deposit of Securities
or moneys of the Fund in either the Book-Entry System or a Depository, including
a deposit in connection with the settlement of a purchase or sale, or a delivery
of loan collateral, the Custodian shall have received a certified copy of a
resolution of the Trust's Board of Trustees for the Fund specifically approving
such deposits by the Custodian on behalf of the Fund in the Book-Entry System or
a Depository as the case may be. Securities and moneys of the Fund deposited in
either the Book-Entry System or a Depository, as the case may be, will be
represented in accounts which include only assets held by the Custodian for its
customers, (including but not limited to) accounts in which the Custodian acts
in a fiduciary or representative capacity.
C. Unless otherwise instructed to the contrary by an Officers' Certificate
signed in the name of the Fund by any two Officers, the Custodian by itself, or
through the use of the Book-Entry System or a Depository with respect to
Securities therein deposited, shall with respect to all Securities held for the
Fund in accordance with this Agreement:
(l) Collect all income due or payable;
(2) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or
otherwise become payable;
(3) Surrender Securities in temporary form for definitive Securities;
(4) Execute, as Custodian, any necessary declarations or certificates
of ownership under the Federal Tax Laws or the laws or regulations of any
other taxing authority now or hereafter in effect;
(5) Hold directly, or through the Book-Entry System or a Depository
with respect to Securities therein deposited, for the account of the Fund
all stock dividends, rights and similar Securities issued with respect to
any Securities held by the Custodian hereunder.
(D) Upon receipt of an Officers' Certificate signed in the name of the Fund by
any two Officers as defined in Section 1, and not otherwise, the Custodian
shall:
(l) Execute and deliver to such persons as may be designated in such
certificate, proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities may be
exercised;
(2) Deliver any Securities held for the Fund in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(3) Deliver any Securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of
this Agreement, such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such delivery;
(4) Make such transfers or exchanges of the assets of the Fund, and
take such other steps, as shall be stated in said certificate to be for the
purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund.
Section 6. Voting and Other Action
The Custodian shall promptly notify the Fund of any calls for redemption,
mergers, tenders, consolidations, reorganizations, recapitalizations, or similar
proceedings affecting domestic Securities held in the Account, provided notice
of such proceedings appears in standard New York financial publications or a
service to which the Custodian subscribes. The Custodian shall not be liable for
late presentation of such items when the Fund has failed to timely instruct the
Custodian in writing.
Neither the Custodian nor any nominee of the Custodian shall vote any of the
Securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an Officers' Certificate. The
Custodian shall promptly deliver, or cause to be executed and delivered, to the
Fund all notices, proxies and proxy soliciting materials with relation to such
securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
Section 7. Sale and Redemption of Capital Stock of the Fund A. Whenever the Fund
shall sell any Shares of beneficial interest in the Fund, it shall cause to be
delivered to the Custodian all moneys received for such sales. B. Upon receipt
of such moneys, the Custodian shall credit such moneys to the account of the
Fund.
C. Upon the issuance of any of the Shares of beneficial interest of the Fund in
accordance with the foregoing provisions of this Section, the Custodian shall
pay, out of the money held for the account of the Fund, all original issue or
other taxes required to be paid by the Fund in connection with such issuance,
specifying the amount to be paid.
D. Whenever the Fund shall hereafter redeem any Shares of beneficial interest in
the Fund, it shall furnish to the Custodian an Officers' Certificate signed in
the name of the Fund by any two Officers of the Trust, stating:
(a) The name of the investor redeeming; and
(b) The amount to be paid for the Shares redeemed.
E. Upon receipt from the Transfer Agent of an advice setting forth the number of
Shares received by the Transfer Agent for redemption and that such Shares are
valid and good form for redemption, the Custodian shall make payment out of the
moneys held for the account of the Fund, either to the Transfer Agent or to such
other persons as may be specified by the Transfer Agent of the total amount
specified in the certificate issued pursuant to the foregoing subsection D of
this Section.
Section 8. Concerning Custodian
A. The Custodian shall be paid promptly upon receipt of an invoice from the
Custodian for its services pursuant to this Agreement such compensation as may
from time to time be agreed upon between the two parties.
B. The Custodian shall not be liable for any action taken in good faith upon any
certificate herein described or a certified copy of any resolution of the Board
of Trustees of the Trust or of the Executive Committee, and may rely on the
genuiness of any such document which it may in good faith believe to have been
validly executed.
C. The Fund agrees to indemnify and hold harmless the Custodian and its nominee
from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's failure to act due to its gross negligence or willful
misconduct. The Custodian is authorized to charge any account of the Fund for
such items. In the event of any advance of cash for any purpose made by the
Custodian resulting from orders or instructions of the Fund, or in the event
that the Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's failure to
act due to its gross negligence or willful misconduct, any property at any time
held for the account of the Fund shall be security therefor.
Upon the failure of the Fund to cure any overdraft amounts, the Custodian may
immediately and without notice foreclose the foregoing lien and security
interest.
D. The Custodian may appoint one or more banking institutions as Depository or
Depositories or as Sub-Custodians, including, but not limited to banking
institutions located in foreign countries, of Securities and moneys at any time
owned by the Fund, upon terms and conditions approved in written instructions
from two Officers of the Trust for the Fund. Such appointment may include, but
is not limited to, the deposit of all or any portion of the Securities or moneys
of the Fund with DTC or Book-Entry System.
E. The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry System
or a Depository and with such reports on its own systems of internal accounting
control as the Fund may reasonably request from time to time.
Section 9. Reports by Custodian
A. Promptly after each purchase of Securities by the Fund, the Fund shall
deliver to the Custodian, with respect to each purchase of Securities, an
Officers' Certificate signed in the name of the Fund by any two Officers as
defined in Section 1, specifying with respect to each such purchase: (a) the
name of the issuer and the title of the Securities, (b) the number of shares or
the principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per share, (e) the total amount
payable upon such purchase, (f) the name of the person from whom or the broker
through whom the purchase was made, (g) whether such purchase is to be settled
through the Book-Entry System or a Depository, and (h) whether the Securities
purchase are to be deposited in the Book-Entry System or a Depository. The
Custodian shall upon receipt of the Securities purchased by or for the Fund pay
out of the moneys held for the account of the Fund, the total amount payable
upon such purchase, provided that the same conforms to the total amount payable
as set forth in such certificate.
B. Promptly after each sale of Securities by the Fund, the Fund shall deliver to
the Custodian, with respect to each sale of Securities, a certificate signed in
the name of the Fund by any two Officers as defined in Section 1, specifying
with respect to each such sale: (a) the name of the issuer and the title of the
Security, (b) the number of shares or principal amount sold, and the accrued
interest, if any, (c) the date of sale, (d) the sale price per share, (e) the
total amount payable to the Fund upon such sale, (f) the name of the person to
whom or the broker through whom the sale was made, and (g) whether such sale is
to be settled through the Book-Entry System or a Depository. The Custodian shall
deliver the Securities upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount payable as set
forth in such certificate. 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.
C. The Custodian shall deliver to the Fund promptly after the close of business
on each day safekeeping receipts for all transactions for the account of the
Fund during said day; and it shall, at least monthly and from time to time,
render a detailed statement of the Securities and moneys held for the Fund under
this Agreement. The Custodian shall forward to the Fund confirmation of any
purchase or sale of Securities.
Section 10. Termination or Assignment
A. This Agreement may be terminated by the Fund, or by the Custodian, on sixty
days' notice, given in writing and sent by registered mail to the Custodian or
to the Fund, as the case may be. In the event such notice is given by the Fund,
it shall be accompanied by a copy of a resolution of the Board of Trustees of
Saturna Investment Trust, certified by the Secretary or any Assistant Secretary,
electing to terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not less than
$1,000,000 aggregate capital surplus and undivided profits. In the event such
notice is given by the Custodian, the Fund shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of the Board of the Trust,
certified by the Secretary or any Assistant Secretary, designating a successor
custodian or custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus, and
undivided profits. If the Fund fails to designate a successor custodian, the
Fund shall upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all securities and moneys
then owned by the Fund be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement.
B. This Agreement may not be assigned by the Custodian without the consent of
the Fund, authorized or approved by a resolution of the Board of Trustees of the
Trust for the Fund.
Section 11. Custodian Power of Attorney
The Custodian is authorized and empowered in the name of and on behalf of the
Fund to execute any certificates of ownership or other instruments which are or
may hereafter be required by any regulations of the United States or any state
or political subdivision thereof, so that the Custodian may fulfill its
obligations hereunder as required in connection with any Securities.
Section 12. Amendments
The parties may make amendments to the Agreement from time to time, provided
that any such amendment shall be reduced to writing and shall be executed as an
addendum to this Agreement in the same manner as this Agreement has been
executed.
Section 13. Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the
successors and assigns of the respective parties hereto.
Section 14. Completeness
This Agreement along with a copy of the fee schedule constitutes the full and
complete agreement between the Custodian and Fund, and no other understanding or
agreement, whether written or oral, shall bind either of the parties hereto.
Section 15. Governing Law
This Agreement shall be governed by the applicable laws of the State of Indiana.
Section 16. Notices
It shall be sufficient service of any notice, request, authorization, complaint,
demand or other paper required under this Agreement to be given or filed with
the Custodian or Fund if the same shall be duly mailed by first class mail with
postage prepaid addressed as follows:
(a) If to the Custodian:
National City Bank, Indiana
Investment Operations, Suite 435E
Attention: Xxxxx Xxxx
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
FAX Number: (000) 000-0000
(b) If to the Fund:
Saturna Investment Trust
Sextant Short-Term Bond Fund
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
FAX Number: (000) 000-0000
SATURNA INVESTMENT TRUST SEXTANT SHORT-TERM BOND FUND By: Xxxxxxxx Xxxxxx,
President ATTEST
By: Xxxxx Xxxxxxx, Secretary
NATIONAL CITY BANK, INDIANA
By: Xxxxxxxxxxx X. Daily
ATTEST
Xxxxx Xxxx
