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EX-99.B8-CUSTODYA
CUSTODY AGREEMENT
THIS AGREEMENT made the 10th day of September, 1992, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of
the state of Missouri, having its trust office located at 000 Xxxx 00xx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and XXXXXXX NATIONAL CAPITAL
MANAGEMENT FUNDS, a Massachusetts business trust, having its principal office
and place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and recordkeeper for the securities and monies of Fund's investment
portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant
and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian
as custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at any time
owned by the Fund; and
B. Appointment as agent to perform certain accounting and
recordkeeping functions required of a duly registered investment
company in compliance with applicable provisions of federal, state
and local laws, rules and regulations including, as may be required:
1. Providing information necessary for Fund to file
required financial reports: maintaining and preserving
required books, accounts and records as the basis for such
reports; and performing certain daily functions in
connection with such accounts and records.
2. Calculating daily net asset value of the Fund, and
3. Acting as liaison with independent auditors.
C. Appointment as agent to perform certain tax and compliance
function required of the Fund.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Trustees of Fund appointing Custodian as
custodian hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Trustees of Fund designating
certain persons to give instructions on behalf of Fund to Custodian
and
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authorizing Custodian to rely upon written instructions over
their signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it except as
permitted by the Investment Company Act of 1940 or from time to
time coming into its possession during the time this Agreement
shall continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not
so delivered. All securities so delivered to Custodian (other than
bearer securities) shall be registered in the name of Fund or its
nominee, or of a nominee of Custodian, or shall be properly
endorsed and in form for transfer satisfactory to Custodian.
B. Delivery of Accounts and Records
Fund shall turn over to Custodian all of the Fund's relevant
accounts and records previously maintained by it. Custodian shall
be entitled to rely conclusively on the completeness and
correctness of the accounts and records turned over to it by the
Fund, and Fund shall indemnify and hold Custodian harmless of and
from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or
other deficiency of such accounts and records or in the failure o
Fund to provide any portion of such or to provide any information
needed by the Custodian knowledgeably to perform its function
hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets of
Fund delivered to it from time to time segregated in a separate
account. Custodian will not deliver, assign, pledge or hypothecate
any such assets to any person except as permitted by the provisions
of this Agreement or any agreement executed by it according to the
terms of section 3.S. of this Agreement. Upon delivery of any such
assets to a subcustodian pursuant to Section 3.S. of this
agreement, Custodian will create and maintain records identifying
those assets which have been delivered to the subcustodian as
belonging to Fund. The Custodian is responsible for the securities
and monies of Fund only until they have been transmitted to and
received by other persons as permitted under the terms of this
Agreement, except for securities and monies transmitted to United
Missouri Bank of Kansas City, N.A. (UMBKC) and United Missouri
Trust Company of New York (UMBNY) for which Custodian remains
responsible as defined in Section 5 of this Agreement. Custodian
shall be responsible for the monies and securities of Fund held by
eligible foreign custodians under this Agreement to the extent the
domestic subcustodian with which the Custodian contracts is
responsible to Custodian. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System or Participant Trust
Company (PTC) (as such entities are defined at 17 CFR Section
270.17f-4(b)) or other depository
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approved by the Fund and with which Custodian has a satisfactory
direct or indirect contractual relationship.
D. Registration of Securities
Custodian will hold stocks and other registerable portfolio
securities of Fund registered in the name of Fund or in the name of
any nominee of Custodian for whose fidelity and liability Custodian
will be fully responsible or in street certificate form, so-called,
with or without any indication of fiduciary capacity.
Unless otherwise instructed, Custodian will register all such
portfolio securities in the name of its authorized nominee. All
securities, and the ownership thereof by Fund, which are held by
Custodian hereunder, however, shall at all times be identifiable on
the records of the Custodian. The Fund agrees to hold Custodian and
its nominee harmless for any liability solely as a recordholder of
securities held in custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of Fund for other securities
or cash issued or paid in connection with any reorganization,
recapitalization, merger, consolidation, split-up of shares, change
of par value, conversion or otherwise, and will deposit any such
securities in accordance with the terms of any reorganization or
protective plan. Without instructions, Custodian is authorized to
exchange securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par value
of the stock is changed, and, upon receiving payment therefore, to
surrender bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that Custodian shall
receive instructions prior to surrendering any convertible
security.
F. Purchases of Investments of the Fund
Fund will, on each business day on which a purchase of securities
shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer
through whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of Fund, but only insofar as monies are
available therein for such purpose, and receive the portfolio
securities so purchased by or for the account of Fund except that
Custodian may in its sole discretion advance funds to the Fund
which may result in an overdraft because the monies held by the
Custodian on behalf of the Fund are insufficient to pay the total
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amount payable upon such purchase. If the Custodian does not
advance monies to pay for portfolio securities, the Custodian will
so notify the Fund. Such payment will be made only upon receipt by
Custodian of the securities so purchased in form for transfer
satisfactory to Custodian.
G. Sales and Deliveries of Investments of the Fund - Other than
Options and Futures Fund will, on each business day on which a
sale of investment securities of Fund has been made, deliver to
Custodian instructions specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be
delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes
or other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer
through whom or person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or
cause to be delivered the securities thus designated as sold for
the account of Fund to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only
upon receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may deliver or
cause to be delivered securities for payment in accordance with
H. Purchases or Sales of Security Options, Options on Indices
and Security Index Futures Contracts Fund will, on each business
day on which a purchase or sale of the following options and/or
futures shall be made by it, deliver to Custodian instructions
which shall specify with respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or
dealer through whom the sale or purchase was made.
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3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other applicable
settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and,
when available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition
to instructions, and if not already in the possession
of Custodian, Fund shall deliver a substantially
complete and executed custodial safekeeping account and
procedural agreement which shall be incorporated by
reference into this Custody Agreement); and
f. The name and address of the futures
commission merchant through whom the sale or purchase
was made, or other applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of Fund:
1. Upon receipt of instructions, Custodian will release or
cause to be released securities held in custody to the
pledgee designated in such instructions by way of pledge
or hypothecation to secure any loan incurred by Fund;
provided, however, that the securities shall be released only
upon payment to Custodian of the monies borrowed, except that
in cases where additional collateral is required to secure a
borrowing already made, further securities may be released or
caused to be released for that purpose upon receipt of
instructions. Upon receipt of instructions, Custodian will
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pay, but only from funds available for such purpose, any such
loan upon redelivery to it of the securities pledged or
hypothecated therefore and upon surrender of the note or
notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated in such
instructions; provided, however, that the securities will be
released only upon deposit with Custodian of full cash
collateral as specified in such instructions, and that Fund
will retain the right to any dividends, interest or
distribution on such loaned securities. Upon receipt of
instructions and the loaned securities, Custodian will
release the cash collateral to the borrower.
J. Routine Matters
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution,
purchase, transfer, or other dealings with securities or other
property of Fund except as may be otherwise provided in this
Agreement or directed from time to time by the Board of Trustees of
Fund or its designees.
K. Deposit Account
Custodian will open and maintain a special purpose deposit accounts
with the approval of the Fund, which approval shall not be
unreasonably denied, in the name of Custodian ("Account"), subject
only to draft or order by Custodian upon receipt of instructions.
All monies received by Custodian from or for the account of a
portfolio shall be deposited in said Account, barring events not in
the control of the Custodian such as strikes, lockouts or labor
disputes, riots, war or equipment or transmission failure or
damage, fire, flood, earthquake or other natural disaster, action
or inaction of governmental authority or other causes beyond its
control, at 9:OO a.m., Kansas City time, on the second business day
after deposit of any check into Fund's Account, Custodian agrees to
make Fed Funds available to the Fund in the amount of the check.
Deposits made by Federal Reserve wire will be available to the Fund
immediately and ACH wires will be available to the Fund on the next
business day. Income earned on the portfolio securities will be
credited to the applicable portfolio of the Fund based on the
schedule attached as Exhibit A. The Custodian will be entitled to
reverse any credited amounts where credits have been made and
monies are not finally collected. If monies are collected after
such reversal, the Custodian will credit the applicable portfolio
in that amount. Custodian may open and maintain an Account in such
other banks or trust companies by properly authorized resolution of
the Board of Trustees of Fund, such Account, however, to be in the
name of custodian and subject only to its draft or order.
L. Income and other Payments to Fund
Custodian will:
1. Collect, claim and receive and deposit for the Account of
Fund all income and other payments which become due and
payable on or after the effective date of this Agreement with
respect to the securities deposited under this
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Agreement, and credit the account of Fund in accordance with
the schedule attached hereto as Exhibit A. If, for any
reason, the Fund is credited with income that is not
subsequently collected, Custodian may reverse that credited
amount;
2. Execute ownership and other certificates and affidavits for
all federal, state and local tax purposes in connection with
the collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income and
other payments, including but not limited to the
presentation for payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be
called, redeemed, retired or otherwise become
payable and regarding which the Custodian has
actual knowledge, or notice of which is
contained in publications of the type to which a
custodian would normally subscribe for such
purpose and
b. the endorsement for collection, in the name of Fund,
of all checks, drafts or other negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon
receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or other
actions. Custodian will receive, claim and collect all stock
dividends, rights and other similar items and will deal with the
same pursuant to instructions. Unless prior instructions have been
received to the contrary, Custodian will, without further
instructions, sell any rights held for the account of Fund on the
last trade date prior to the date of expiration of such rights.
M. Payment of Dividends and other Distributions
On the declaration of any dividend or other distribution on the
shares of Capital Stock of Fund ("Fund Shares") by the Board of
Trustees of Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said Board
of Trustees certified by the Secretary or an Assistant Secretary of
Fund wherein there shall be set forth the record date as of which
shareholders entitled to receive such dividend or other
distribution shall be determined, the date of payment of such
dividend or distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date and the
reinvestment date of any dividend are the same, in which case funds
shall remain in the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other distribution,
Custodian will pay out of the monies held for the account of Fund,
insofar as the same shall be available for such purposes, and
credit to the account of the Dividend Disbursing Agent for Fund,
such amount as may be necessary to pay the amount per share payable
in cash on Fund Shares issued and outstanding on the record date
established by such Resolution.
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N. Shares of Fund Purchased by Fund
Whenever any Fund Shares are repurchased or redeemed by Fund, Fund
or its agent shall advise Custodian of the aggregate dollar amount
to be paid for such shares and shall confirm such advice in
writing. Upon receipt of such advice, Custodian shall charge such
aggregate dollar amount to the Account of Fund and either deposit
the same in the account maintained for the purpose of paying for
the repurchase or redemption of Fund Shares or deliver the same in
accordance with such advice.
Custodian shall not have any duty or responsibility to determine
that Fund Shares have been removed from the proper shareholder
account or accounts or that the proper number of such shares have
been cancelled and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
Whenever Fund Shares are purchased from Fund, Fund will deposit or
cause to be deposited with Custodian the amount received for such
shares.
Custodian shall not have any duty or responsibility to determine
that Fund Shares purchased from Fund have been added to the proper
shareholder account or accounts or that the proper number of such
shares have been added to the shareholder records.
P. Proxies and Notices
Custodian will promptly deliver or mail or have delivered or mailed
to Fund all proxies properly signed, all notices of meetings, all
proxy statements and other notices, requests or announcements
affecting or relating to securities held by Custodian for Fund and
will, upon receipt of instructions, execute and deliver or cause
its nominee to execute and deliver or mail or have delivered or
mailed such proxies or other authorizations as may be required.
Except as provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee will
exercise any power inherent in any such securities, including any
power to vote the same, or execute any proxy, power of attorney, or
other similar instrument voting any of such securities, or give any
consent, approval or waiver with respect thereto, or take any other
similar action.
Q. Disbursements
Custodian will pay or cause to be paid insofar as funds are
available for the purpose, bills, statements and other obligations
of Fund (including but not limited to obligations in connection
with the conversion, exchange or surrender of securities owned by
Fund, interest charges, dividend disbursements, taxes, management
fees, custodian fees, legal fees, auditors' fees, transfer agents'
fees, brokerage commissions, compensation to personnel, and other
operating expenses of Fund) pursuant to instructions of Fund
setting forth the name of the person to whom payment is to be made,
the amount of the payment, and the purpose of the payment.
R. Daily Statement of Accounts
Custodian will render to Fund as of the close of business on each
day but in no event later than 10:00 a.m. Central/Standard Time the
next business day, a detailed statement of the amounts received or
paid and of securities received or delivered for the account of
Fund during said day. Custodian will, from time to
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time, upon request by Fund, render a detailed statement of the
securities and monies held for Fund under this Agreement, and
Custodian will maintain such books and records as are necessary to
enable it to do so and will permit such persons as are authorized
by Fund including Fund's independent public accountants, access to
such records or confirmation of the contents of such records; and
if demanded, will permit federal and state regulatory agencies to
examine the securities, books and records.
Upon the written instructions of Fund or as demanded by federal or
state regulatory agencies, Custodian will instruct any subcustodian
to give such persons as are authorized by Fund including Fund's
independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, to
permit federal and state regulatory agencies to examine the books,
records and securities held by subcustodian
S. Appointment of Subcustodian
1. Notwithstanding any other provisions of this Agreement, all
or any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian and
approved by the Fund including contracts if Custodian is not
completely responsible for the appointment of such bank or
trust company), which approval shall not be unreasonably
withheld. Any such subcustodian must have the qualifications
required for custodian under the Investment Company Act of
1940, as amended. The subcustodian may participate directly or
indirectly in the Depository Trust Company, Treasury/Federal
Reserve Book Entry System, Participant Trust Company (as such
entities are defined at 17 CFR Sec. 270.17f-4(b)), or other
depository approved by the Fund and with which Custodian has a
satisfactory direct or indirect contractual relationship.
Custodian will appoint UMBKC and UMBNY as subcustodians and
Custodian shall be responsible for UMBKC and UMBNY to the same
extent it is responsible to the Fund under Section 5 of this
Agreement. Custodian is not responsible for DTC, the
Treasury/Federal Reserve Book Entry System, and PTC except to
the extent such entities are responsible to Custodian. Upon
instruction of the Fund, Custodian shall be willing to
contract with such entities as Bank of New York (BONY), Xxxxxx
and Guaranty Trust Company (MGTC), Chemical Bank (CB), and
Bankers Trust Company (BT) for variable rate securities, and
Custodian will be responsible to the Fund to the same extent
those entities are responsible to Custodian. The Fund shall be
entitled to review and approve Custodian's contracts with
BONY, MGTC, CB, and BT.
2. Notwithstanding any other provisions of this Agreement,
Fund's foreign securities (as defined in Rule 17f-5(c)(1)
under the Investment Company Act of 1940) and Fund's cash or
cash equivalents, in amounts reasonably necessary to effect
Fund's foreign securities transactions, may be held in the
custody of one or more banks or trust companies acting as
subcustodians, according to Section 3.S.l; and thereafter,
pursuant to a written contract or contracts as approved by
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Fund's governing Board, may be transferred to an account
maintained by such subcustodian with an eligible foreign
custodian, as defined in Rule 17f-5(c)(2), provided that any
such arrangement involving a foreign custodian shall be in
accordance with the provisions of Rule 17f-5 under the
Investment Company Act of 1940 as that Rule may be amended
from time to time. The Fund shall be provided the contract
with the domestic subcustodian who shall contract with the
eligible foreign subcustodians. The Custodian shall be
responsible for the monies and securities of Fund held by
eligible foreign subcustodians to the extent the domestic
subcustodian with which the Custodian contracts is responsible
to Custodian.
T. Accounts and Records
Custodian, with the direction and as interpreted by the Fund,
Fund's accountants and/or other tax advisors, will prepare and
maintain as complete, accurate and current all accounts and records
required to be maintained by Fund and under the general Rules and
Regulations under the Investment Company Act of 1940 ("Rules"), as
amended, as agreed upon between the parties and will preserve said
records in the manner and for the periods prescribed in said Rules,
or for such longer period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate and
timely information to complete Fund's records and perform daily
calculation of the Fund's net asset value, as provided in Section
3.W. below.
Custodian shall incur no liability and Fund shall indemnify and
hold harmless Custodian from and against any liability arising from
any failure of Fund to furnish such information in a timely and
accurate manner, even if Fund subsequently provides accurate but
untimely information. It shall be the responsibility of Fund to
furnish Custodian with the declaration, record and payment dates
and amounts of any dividends or income and any other special actions
required concerning each of its securities when such information is
not readily available from generally accepted securities industry
services or publications.
U. Accounts and Records Property of Fund
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the property
of Fund, and will be made available to Fund for inspection or
reproduction within a reasonable period of time, upon demand.
Custodian will assist Fund's independent auditors, or upon approval
of Fund, or upon demand, any regulatory body having jurisdiction
over the Fund or Custodian, in any requested review of Fund's
accounts and records but shall be reimbursed for all expenses and
employee time invested in any such review outside of routine
and normal periodic reviews. Upon receipt from Fund of the
necessary information, Custodian will supply necessary data for
Fund's completion of any necessary tax returns, questionnaires,
periodic reports to Shareholders and such other reports and
information requests as Fund and Custodian shall agree upon from
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V. Adoption of Procedures
Custodian and Fund may from time to time adopt procedures as they
agree upon, and Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates
any requirements of its prospectus, "Articles of Incorporation,"
Bylaws, or any rule or regulation of any regulatory body or
governmental agency. Fund will be responsible to notify Custodian
of any changes in statutes, regulations, rules or policies which
might necessitate changes in Custodian's responsibilities or
procedures.
W. Calculation of Net Asset Value
Custodian will calculate Fund's net asset value, in accordance with
Fund's prospectus, once daily. Custodian will prepare and maintain
a daily evaluation of securities for which market quotations are
available by the use of outside services normally used and
contracted for this purpose; all other securities will be evaluated
in accordance with Fund's instructions. Custodian will have no
responsibility for the accuracy of the prices quoted by these
outside services, for the information supplied by Fund, or for
acting upon the instructions of the Fund.
X. Overdrafts
If Custodian shall in its sole discretion advance funds to the
account of the Fund which results in an overdraft because the
monies held by Custodian on behalf of the Fund are insufficient to
pay the total amount payable upon a purchase of securities as
specified in Fund's instructions or for some other reason, the
amount of the overdraft shall be payable by the Fund to Custodian
upon demand and shall bear an interest rate determined by Custodian
and as so disclosed in the fee schedule from the date advanced
until the date of payment. Custodian shall have a lien on the
assets of the Fund in the amount of any outstanding overdraft.
Y. Compliance & Tax
The Custodian shall provide the reports, records, and information
described in Exhibit B.
4. INSTRUCTION.
A. The term "instruction", as used herein, means written or oral
instructions to Custodian from a designated representative of Fund.
Certified copies of resolutions of the Board of Trustees of Fund
naming one or more designated representatives to give instructions
in the name and on behalf of Fund, may be received and accepted from
time to time by Custodian as conclusive evidence of the authority of
any designated representative to act for Fund and may be considered
to be in full force and effect (and Custodian will be fully
protected in acting in reliance thereon) until receipt by Custodian
of notice to the contrary. Unless the resolution delegating
authority to any person to give instructions specifically requires
that the approval of anyone else will first have been obtained,
Custodian will be under no obligation to inquire into the right of
the person giving such instructions to do so. Notwithstanding any of
the foregoing provisions of this Section 4. no authorizations or
instructions received by Custodian from Fund, will be deemed to
authorize or permit any director,
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trustee, officer, employee, or agent of Fund to withdraw any of the
securities or similar investments of Fund upon the mere receipt
of such authorization or instructions from such director, trustee,
officer, employee or agent.
Notwithstanding any other provision of this Agreement, Custodian,
upon receipt (and acknowledgment if required at the discretion of
Custodian) of the instructions of a designated representative of
Fund will undertake to deliver for Fund's account monies, provided
such monies are on hand or available) in connection with Fund's
transactions and to wire transfer such monies to such broker,
dealer, subcustodian, bank or other agent specified in such
instructions by a designated representative of Fund.
B. No later than the next business day immediately following
each oral instruction, Fund will send Custodian written
confirmation of such oral instruction. At Custodian's sole
discretion, Custodian may record on tape, or otherwise, any oral
instruction whether given in person or via telephone, each such
recording identifying the parties, the date and the time of the
beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from and
against any loss or liability (including attorneys' fees) arising
out of Custodian's negligence or bad faith. Custodian shall not be
liable for consequential, special, or punitive damages. Custodian
may request and obtain the advice and opinion of counsel for Fund,
or of its own counsel with respect to questions or matters of law,
and it shall be without liability to Fund for any action taken or
omitted by it in good faith, in conformity with such advice or
opinion. If Custodian reasonably believes that it could not
lawfully act according to the instructions of the Fund or
the Fund's counsel, it may in its discretion, with prior notice to
the Fund, not act according to such instructions.
B. Fund shall hold harmless and indemnify Custodian from and
against any loss or liability (including attorneys' fees) in
connection with any matter not related to Custodian's negligence or
bad faith in performance of its duties hereunder.
C. Custodian may rely upon the advice of Fund and upon
statements of Fund's public accountants and other persons
representing the Fund believed by Custodian in good faith, to be
expert in matters upon which they are consulted, and Custodian shall
not be liable for any actions taken, in good faith, upon such
statements.
D. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the payment of
money by it, or which in Custodian's opinion might make it or its
nominee liable for payment of monies or in any other way, Custodian,
upon notice to Fund given prior to such actions, shall be and be
kept indemnified by Fund in an amount and form satisfactory to
Custodian against any liability on account of such action.
E. Custodian shall be entitled to receive, and Fund agrees to
pay to Custodian, on demand, reimbursement for such cash
disbursements, costs and expenses as may be agreed upon from time to
time by Custodian and Fund.
13
F. Custodian shall be protected in acting as custodian hereunder
upon any instructions, advice, notice, request, consent, certificate
or other instrument or paper reasonably appearing to it to be
genuine and to have been properly executed and shall, unless
otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained
from Fund hereunder, a certificate signed by the Fund's President,
or other officer specifically authorized for such purpose.
G. Without limiting the generality of the foregoing, Custodian
shall be under no duty or obligation to inquire into, and shall not
be liable for:
1. The validity of the issue of any securities purchased by or
for Fund, the legality of the purchase thereof or
evidence of ownership required by Fund to be received by
Custodian, or the propriety of the decision to purchase or
amount paid therefore;
2. The legality of the sale of any securities by or for Fund, or
the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the
Capital Stock of Fund, or the sufficiency of the amount
to be received therefore;
4. The legality of the repurchase or redemption of any Fund
Shares, or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or
the legality of the issue of any Fund Shares in payment of
any stock dividend.
H. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft, wire
transfer, clearinghouse funds, uncollected funds, or instrument for
the payment of money received by it on behalf of Fund, until
Custodian actually receives such money, provided only that it shall
advise Fund promptly if it fails to receive any such money in the
ordinary course of business, and use its best efforts and cooperate
with Fund toward the end that such money shall be received.
I. To the extent not inconsistent with Sections 3.C. and 3.S.
herein, Custodian shall not be responsible for loss occasioned by
the acts, neglects, defaults or insolvency of any broker, bank,
trust company, or any other person with whom Custodian may deal in
the absence of negligence, or bad faith on the part of Custodian.
J. Notwithstanding anything herein to the contrary, Custodian
may, and with respect to any foreign subcustodian appointed under
Section 3.S.2. must, provide Fund for its approval, agreements with
banks or trust companies which will act as subcustodians for Fund
pursuant to Section 3.S of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is
stated in the Fee Schedule attached hereto as Exhibit C which may be
changed from time to time as agreed to in writing by Custodian and Fund.
Custodian may charge such compensation against monies held by it for the
account of Fund. Custodian will also be entitled, notwithstanding the
provisions of Sections 5.C. or 5.D. hereof, to charge against any monies
held by it for the account of Fund the amount of any loss, damage,
liability, advance, or expense for which it shall be entitled to
14
reimbursement under the provisions of this Agreement, including fees or
expenses due to Custodian for other services provided to the Fund by the
Custodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other
party hereto and received not less than ninety (90) days prior to the
date upon which such termination will take effect. Upon termination of
this Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund will use its best efforts to obtain a successor custodian.
Unless the holders of a majority of the outstanding shares of "Capital
Stock" of Fund vote to have the securities, funds and other properties
held under this Agreement delivered and paid over to some other person,
firm or corporation specified in the vote, having not less the two
million dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report, and meeting such other
qualifications for custodian as set forth in the Bylaws of Fund, the
Board of Trustees of Fund will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian a bank
or trust company having such qualifications. Custodian will, upon
termination of this Agreement, deliver to the successor custodian so
specified or appointed, at Custodian's office, all securities then held
by Custodian hereunder, duly endorsed and in form for transfer, all funds
and other properties of Fund deposited with or held by Custodian
hereunder, or will cooperate in effecting changes in book-entries at the
Depository Trust Company or in the Treasury/Federal Reserve Book-Entry
System pursuant to 31 CFR Sec. 306.118. In the event no such vote has
been adopted by the stockholders of Fund and no written order designating
a successor custodian has been delivered to Custodian on or before the
date when such termination becomes effective, then Custodian will deliver
the securities, funds and properties of Fund to a bank or trust company
at the selection of Custodian and meeting the qualifications for
custodian, if any, set forth in the Bylaws of Fund and having not less
that two million dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report. Upon either
such delivery to a successor custodian, Custodian will have no further
obligations or liabilities under this Agreement. Thereafter such bank or
trust company will be the successor custodian under this Agreement and
will be entitled to reasonable compensation for its services. In the
event that no such successor custodian can be found, Fund will submit to
its shareholders, before permitting delivery of the cash and securities
owned by Fund to anyone other than a successor custodian, the question of
whether Fund will be liquidated or function without a custodian.
Notwithstanding the foregoing requirement as to delivery upon termination
of this Agreement, Custodian may make any other delivery of the
securities, funds and property of Fund which is permitted by the
Investment Company Act of 1940, Fund's Certificate of Incorporation and
Bylaws then in effect or apply to a court of competent jurisdiction for
the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received by
Fund at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 or at such other address
as Fund may have designated to Custodian in writing, will be deemed to
have been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its offices at
15
000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or to such other
address as it may have designated to Fund in writing, will be deemed to
have been properly given to Custodian hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the
respective successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in
any manner except by a written agreement properly authorized and
executed by both parties hereto.
D. The captions in this Agreement are included for convenience
of reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or otherwise
invalid, the remaining portion or portions shall be considered
severable and not be affected, and the rights and obligations of
the parties shall be construed and enforced as if the Agreement did
not contain the particular part, term or provision held to be
illegal or invalid.
G. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct
communications between such issuer and Fund unless the Fund directs
the Custodian otherwise.
H. This Agreement may not be assigned by either party without
prior written consent of the other party.
I. If any provision of the Agreement, either in its present form
or as amended from time to time, limits, qualifies, or conflicts
with the Investment Company Act of 1940 and the rules and
regulations promulgated thereunder, such statutes, rules and
regulations shall be deemed to control and supersede such provision
without nullifying or terminating the remainder of the provisions of
this Agreement.
10. Termination Assistance. Commencing upon any notice of termination or
expiration of this Agreement, IFTC shall provide to the Company or its
designee termination assistance as defined below in order to allow the
services provided hereunder to continue without interruption or adverse
effect and to facilitate the orderly transfer of responsibility for such
services to the Company or its designee. If and to the extent that such
assistance is provided after the date the termination is to be effective,
the company will pay for such assistance at the then-prevailing rate
under this Agreement. The termination assistance to be provided to the
Company shall include the following:
A. Continuing to perform, for a period of not more than 90 days
following the date the termination is to be effective, any or all of
the services then being performed by IFTC.
16
B. Developing, with the assistance of the Company, a plan for the
transition of operations from IFTC to the Company or its designee.
C. Prior to providing any of the foregoing termination
assistance to the Company or its designee, IFTC shall be entitled to
receive from such designee, in a form and substance acceptable to
IFTC, written assurances that (i) such designee will maintain at all
times the confidentiality of any IFTC proprietary information,
software or materials required to be disclosed or provided to, or
learned by, such designee in connection with the transaction of
duties to Company or designee therewith.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By: /s/
Title: Executive Vice President
XXXXXXX NATIONAL CAPITAL MANAGEMENT FUNDS
By: /s/ Xxxxx X. Xxxxxx
Title: Treasuer
17
EXHIBIT A
IFTC AVAILABILITY SCHEDULE BY TRANSACTION TYPE
TRANSACTION DTC PHYSICAL FED
TYPE CR DATE FDS TYPE CR DATE FDS TYPE CR DATE FDS TYPE
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Paydate C Paydate C N/A
Rate Int.
Floating N/A As Rate C N/A
Rate Int. Received
(No Rate)
Mtg. Backed Paydate C Paydate +1 C Paydate F
P&I Bus. Day
Fixed Rate Paydate C Paydate C Paydate F
Int .
Euroclear N/A C Paydate C
Legend
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
*Availability based on how received.
18
Exhibit B
1. Notify Fund of inconsistencies between securities purchased and
investment restrictions recited in the prospectus, the diversification
requirements of the Investment Company Act of 1940, as amended, and the
Internal Revenue Code of 1986, as amended; and
2. Prepare federal tax returns for review by the Fund; and
3. Notify the Fund when it appears it has not met the requirements of
Section 851(b)(2) or Section 851(b)(3)of the Internal Revenue Code of
1986, as amended; and
4. Assist in monitoring Investment Company Act of 1940, as amended, Section
12(d)(3) upon the instructions of the Fund; and
5. Maintain financial records pursuant to Investment Company Act of 1940, as
amended, Sections 31a-1(a) and 31a-1(b).
19
INVESTORS FIDUCIARY TRUST COMPANY
XXXXXXX NATIONAL CAPITAL MANAGEMENT FUNDS
FEE SCHEDULE
I. TRANSFER AGENCY
A. Base Fee
There is a monthly base fee of $1,500 per fund/portfolio. (This is
not included in the monthly minimum fee discussed in I.B. below.)
B. Minimum Fee
There is a monthly minimum fee of $2,500 per fund/portfolio. The
monthly minimum fee supersedes items listed in I.C. below provided
the total applicable charges based on I.C. do not exceed the monthly
minimum.
C. Account Maintenance and Processing Fees
Open Accounts:
Money Market and Daily Dividend Funds - $17.25 per account per year
Monthly Dividend Funds - $16.25 per account per year
Quarterly Dividend and Equity Funds - $14.25 per account per year
Closed Accounts - $2.65 per account per year
Omnibus Accounts - $2.50 per transaction
New Account Set Up - $2.50 per account
Financial Transactions - $1.50 per transaction
D. Federal Funds Wire
There is a $6.00 fee for each federal funds wire received or
delivered. ACH transactions are provided at no additional cost.
E. Miscellaneous
Fiduciary Trustee Fees:
IRAs/SEPs - $12.00 per account per year
Qualified Plans - $25.00 per social security number per plan
Optional Services
A. Sales Reporting - $250 per month/per applicable portfolio
B. NSCC - $100 per month/per applicable portfolio
C. INVESTOR (linking all individual portfolios under a
single investor hierarchy) - $1.20 per account (production is
an out-of-pocket expense)
Page 1 of 4
20
Xxxxxxx National Capital Management Funds
Proposed Fee Schedule (Continued)
D. 12b-1 processing will be charged at a rate of $0.30
per account per payment cycle with a $0.60 per year minimum.
E. Checkwriting Privileges - $0.35 per check clearing
F. Deferred Contingent Sales Feature - $3.00 per account per year
G. Dealer Maintenance - $2.50 per transaction
II. PORTFOLIO ACCOUNTING
A. Monthly Base Fee Per Portfolio
$500 (not included in minimum monthly asset fee discussed in II.B.
below.)
B. Minimum Monthly Asset Fee
There is a monthly minimum fee of $3,000 per fund/portfolio. The
monthly minimum fee per portfolio does not apply to any portfolio if
the asset based fee discussed in II.C. below produces greater
revenue than the aggregate minimum.
C. Asset Based Fee on a Total Relationship Basis
6/100 of 1% (6 basis points) on the first $150 million in assets
4/100 of 1% (4 basis points) on the next $150 million in assets
2/100 of 1% (2 basis points) on the next $200 million is assets
1/100 of 1% (1 basis point) on all assets in excess of $500 million
D. Foreign Securities Premium on Month-End Foreign Assets
There is a foreign securities premium of 2/100 of 1% (2 basis
points) in addition to either the asset based fees (II.C. above), or
the minimum monthly asset fee (II.B. above).
III. COMPLIANCE
$30 per incurred hour
Monitoring of internal revenue code section 851 diversification, 30%
income and 90% income tests Initial preparation of:
1. Federal tax return.
2. Book tax difference schedules for wash sales.
3. Selected filing such as semi-annual and annual reports, 24(f)(2)
notices and Form N-SAR.
This list of services can be expanded based upon additional
responsibilities and related fees as agreed to between parties. Travel
expenses incurred by IFTC on behalf of supporting the above services will
be billed to the fund as an out-of-pocket expense.
Page 2 of 4
21
Xxxxxxx National Capital Management Funds
Proposed Fee Schedule (Continued)
IV. SECURITY CUSTODY
A. Domestic Securities
Asset-Based Fee on a total relationship basis:
2/100 of 1% (2 basis points) on the first $250 million is assets
1.5/100 of 1% (1.5 basis points) on the next $250 million is assets
1/100 of 1% (1 basis point) on all assets in excess of $500 million
Transaction Fee, per transaction:
Physical Delivery - $22.00
Depository Eligible - $12.00
GNMA Paydown - $12.00
PTC - $12.00
B. Foreign Securities
Asset-Based Fee on a total relationship basis:
16/100 of 1% (16 basis points) on all assets held in foreign
securities
6/100 of 1% (6 basis points) on all assets held in
Euroclear/CEDEL/First Chicago Clearing
Investments in emerging markets will be priced at the time of
investment and should approximate 50 basis points.
Transaction Fee, per transaction:
Euroclear/CEDEL/First Chicago Clearing - $45.00
Emerging Markets - $90.00- $120.00
C. Balance Credits
IFTC will offset fees with balance credits calculated at 75% of the
bank credit rate (see below) applied to average custody collected
cash balances for the month. Balance credits will be applied on a
fund by fund basis and can be used to offset custody, portfolio
accounting, and transfer agency fees. Any credits in excess of fees
will be carried forward from month to month through the end of the
calendar year. For calculation purposes, IFTC uses an actual/actual
basis.
Note: The bank credit rate is the equivalent to the lesser of:
The average 91-day Treasury Xxxx discount rate for the month
or
The average Federal Funds rate for the month less 50 basis
points.
D. Overdraft Charges
Fund overdrafts will be calculated at the Prime rate (as published
in the Wall Street Journal) and charged on a daily basis.
Page 3 of 4
22
Xxxxxxx National Capital Management Funds
Proposed Fee Schedule (Continued)
V. NOTES TO THE ABOVE FEE SCHEDULE
A. Annual maintenance fees are payable monthly at 1/12th of the annual
stated rate.
B. Asset based fees will be billed monthly at 1/12th of the annual
stated rate based on monthly average net assets, except for the foreign
securities premium which will be billed on month-end market value at 1/12th
of the annual stated rate.
C. The above schedule does not include out-of-pocket expenses that
would be incurred by IFTC on the fund's behalf. Examples of out-of-pocket
expenses include but are not limited to pricing services, forms, postage,
mailing services, magnetic tapes, printing, proxy processing,
microfilm/microfiche, FDIC insurance, foreign registration and script
fees, back-up recovery for mainframe services by third parties, etc.
Out-of-pocket expenses incurred by IFTC in planning and executing the
conversion will be passed on to the fund. IFTC bills out-of-pocket expenses
separately from service fees.
D. The fees stated above are exclusive of terminal equipment
required in the client's location(s) and communication line costs.
E. Any fees or out-of-pocket expenses not paid within 30 days of
the date of the original invoice will be charged a late payment fee
of 1% per month until payment of the fees are received by IFTC.
F. The above fee schedule is predicated on the fact that IFTC be
allowed a minimum of 90 calendar days between notification of hiring
and when the selection is effective, and that IFTC receive adequate
cooperation from the client during the implementation period.
G. The balance credits listed in IV.C. will apply for each fund in
which the applicable fees for transfer agency and portfolio
accounting services exceed the minimum fees, respectively.
H. The above fee schedule commences on the effective date of the
service agreement between IFTC and the client and is guaranteed
through September 9, 1994. The minimum fees for transfer agency and
portfolio accounting services will December 31, 1992.
/s/ /s/ Xxxxx X. Xxxxxx, Treasurer
Investors Fiduciary Trust Company Xxxxxxx National Capital Management Funds
September 10, 1992 September 9, 1992
Date Date
Page 4 of 4