CUSTODY AGREEMENT
Dated , 1995
Between
UMB BANK, N.A.
and
FRONTEGRA FUNDS, INC.
Prototype Custody Agreement
for
Registered Investment Companies
Table of Contents
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions 1
(a) Securities 1
(b) Assets 2
(c) Instructions and Special Instructions 2
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic
Subcustodian 3
(a) Safekeeping 3
(b) Manner of Holding Securities 4
(c) Free Delivery of Assets 5
(d) Exchange of Securities 6
(e) Purchases of Assets 6
(f) Sales of Assets 7
(g) Options 7
(h) Futures Contracts 8
(i) Segregated Accounts 8
(j) Depositary Receipts 9
(k) Corporate Actions, Put Bonds, Called
Bonds, Etc. 9
(l) Interest Bearing Deposits 10
(m) Foreign Exchange Transactions 10
(n) Pledges or Loans of Securities 11
(o) Stock Dividends, Rights, Etc. 12
(p) Routine Dealings 12
(q) Collections 12
(r) Bank Accounts 12
(s) Dividends, Distributions and Redemptions 13
(t) Proceeds from Shares Sold 13
(u) Proxies and Notices; Compliance with the
Shareholders Communication Act of 1985 13
(v) Books and Records 14
(w) Opinion of Fund's Independent Certified
Public Accountants 14
(x) Reports by Independent Certified Public
Accountants 14
(y) Bills and Others Disbursements 14
5. Subcustodians 14
(a) Domestic Subcustodians 15
(b) Foreign Subcustodians 15
(c) Interim Subcustodians 16
(d) Special Subcustodians 17
(e) Termination of a Subcustodian 17
(f) Certification Regarding Foreign
Subcustodians 17
6. Standard of Care 17
(a) General Standard of Care 17
(b) Actions Prohibited by Applicable Law,
Events Beyond Custodian's Control,
Armed Conflict, Sovereign Risk, Etc. 17
(c) Liability for Past Records 18
(d) Advice of Counsel 18
(e) Advice of the Fund and Others 18
(f) Instructions Appearing to be Genuine 18
(g) Exceptions from Liability 19
7. Liability of the Custodian for Actions of
Others 19
(a) Domestic Subcustodians 19
(b) Liability for Acts and Omissions of
Foreign Subcustodians 19
(c) Securities Systems, Interim Subcustodians,
Special Subcustodians, Securities
Depositories and Clearing Agencies 19
(d) Defaults or Insolvencies of Brokers,
Banks, Etc. 20
(e) Reimbursement of Expenses 20
8. Indemnification 20
(a) Indemnification by Fund 20
(b) Indemnification by Custodian 20
9. Advances 21
10. Liens 21
11. Compensation 22
12. Powers of Attorney 22
13. Termination and Assignment 22
14. Additional Funds 22
15. Notices 23
16. Miscellaneous 23
CUSTODY AGREEMENT
This agreement made as of this day of
, 199 , between UMB Bank, n.a., a national banking
association with its principal place of business
located at Kansas City, Missouri (hereinafter
"Custodian"), and each of the Funds which have executed
the signature page hereof together with such additional
Funds which shall be made parties to this Agreement by
the execution of a separate signature page hereto
(individually, a "Fund" and collectively, the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as an open-end
management investment company under the Investment
Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as
its custodian for the custody of Assets (as hereinafter
defined) owned by such Fund which Assets are to be held
in such accounts as such Fund may establish from time
to time; and
WHEREAS, Custodian is willing to accept such
appointment on the terms and conditions hereof.
NOW, THEREFORE, 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.
Each Fund hereby constitutes and appoints the
Custodian as custodian of Assets belonging to each such
Fund which have been or may be from time to time
deposited with the Custodian. Custodian accepts such
appointment as a custodian and agrees to perform the
duties and responsibilities of Custodian as set forth
herein on the conditions set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the following
terms shall have the meanings so indicated:
(a) "Security" or "Securities" shall mean
stocks, bonds, bills, rights, script, warrants, interim
certificates and all negotiable or nonnegotiable paper
commonly known as Securities and other instruments or
obligations.
(b) "Assets" shall mean Securities, monies
and other property held by the Custodian for the
benefit of a Fund.
(c)(1) "Instructions", as used herein, shall
mean: (i) a tested telex, a written (including, without
limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by or
on behalf of a Fund by an Authorized Person; (ii) a
telephonic or other oral communication from a person
the Custodian reasonably believes to be an Authorized
Person; or (iii) a communication effected directly
between an electro-mechanical or electronic device or
system (including, without limitation, computers) on
behalf of a Fund. Instructions in the form of oral
communications shall be confirmed by the appropriate
Fund by tested telex or in writing in the manner set
forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by
the Custodian in reliance upon such oral Instructions
prior to the Custodian's receipt of such confirmation.
Each Fund authorizes the Custodian to record any and
all telephonic or other oral Instructions communicated
to the Custodian.
(2) "Special Instructions", as used herein,
shall mean Instructions countersigned or confirmed in
writing by the Treasurer or any Assistant Treasurer of
a Fund or any other person designated by the Treasurer
of such Fund in writing, which countersignature or
confirmation shall be included on the same instrument
containing the Instructions or on a separate instrument
relating thereto.
(3) Instructions and Special Instructions
shall be delivered to the Custodian at the address
and/or telephone, facsimile transmission or telex
number agreed upon from time to time by the Custodian
and each Fund.
(4) Where appropriate, Instructions and
Special Instructions shall be continuing instructions.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents
that its execution does not violate any of the
provisions of its respective charter, articles of
incorporation, articles of association or bylaws and
all required corporate action to authorize the
execution and delivery of this Agreement has been
taken.
Each Fund has furnished the Custodian with copies,
properly certified or authenticated, with all
amendments or supplements thereto, of the following
documents:
(a) Certificate of Incorporation (or equivalent document) of the Fund
as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing the
Custodian and approving the form of this Agreement; and
(d) The Fund's current prospectus and statements of additional
information.
Each Fund shall promptly furnish the Custodian with
copies of any updates, amendments or supplements to the
foregoing documents.
In addition, each Fund has delivered or will
promptly deliver to the Custodian, copies of the
Resolution(s) of its Board of Directors or Trustees and
all amendments or supplements thereto, properly
certified or authenticated, designating certain
officers or employees of each such Fund who will have
continuing authority to certify to the Custodian: (a)
the names, titles, signatures and scope of authority of
all persons authorized to give Instructions or any
other notice, request, direction, instruction,
certificate or instrument on behalf of each Fund, and
(b) the names, titles and signatures of those persons
authorized to countersign or confirm Special
Instructions on behalf of each Fund (in both cases
collectively, the "Authorized Persons" and
individually, an "Authorized Person"). Such
Resolutions and certificates may be accepted and relied
upon by the Custodian as conclusive evidence of the
facts set forth therein and shall be considered to be
in full force and effect until delivery to the
Custodian of a similar Resolution or certificate to the
contrary. Upon delivery of a certificate which deletes
or does not include the name(s) of a person previously
authorized to give Instructions or to countersign or
confirm Special Instructions, such persons shall no
longer be considered an Authorized Person authorized to
give Instructions or to countersign or confirm Special
Instructions. Unless the certificate specifically
requires that the approval of anyone else will first
have been obtained, the Custodian will be under no
obligation to inquire into the right of the person
giving such Instructions or Special Instructions to do
so. Notwithstanding any of the foregoing, no
Instructions or Special Instructions received by the
Custodian from a Fund will be deemed to authorize or
permit any director, trustee, officer, employee, or
agent of such Fund to withdraw any of the Assets of
such Fund upon the mere receipt of such authorization,
Special Instructions or Instructions from such
director, trustee, officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC
SUBCUSTODIAN.
Except for Assets held by any Subcustodian
appointed pursuant to Sections 5(b), (c), or (d) of
this Agreement, the Custodian shall have and perform
the powers and duties hereinafter set forth in this
Section 4. For purposes of this Section 4 all
references to powers and duties of the "Custodian"
shall also refer to any Domestic Subcustodian appointed
pursuant to Section 5(a).
(a) Safekeeping.
The Custodian will keep safely the Assets of
each Fund which are delivered to it from time to time.
The Custodian shall not be responsible for any property
of a Fund held or received by such Fund and not
delivered to the Custodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold
Securities of each Fund either: (i) by physical
possession of the share certificates or other
instruments representing such Securities in registered
or bearer form; or (ii) in book-entry form by a
Securities System (as hereinafter defined) in
accordance with the provisions of sub-paragraph (3)
below.
(2) The Custodian may hold registrable
portfolio Securities which have been delivered to it in
physical form, by registering the same in the name of
the appropriate Fund or its nominee, or in the name of
the Custodian or its nominee, for whose actions such
Fund and Custodian, respectively, shall be fully
responsible. Upon the receipt of Instructions, the
Custodian shall hold such Securities in street
certificate form, so called, with or without any
indication of fiduciary capacity. However, unless it
receives Instructions to the contrary, the Custodian
will register all such portfolio Securities in the name
of the Custodian's authorized nominee. All such
Securities shall be held in an account of the Custodian
containing only assets of the appropriate Fund or only
assets held by the Custodian as a fiduciary, provided
that the records of the Custodian shall indicate at all
times the Fund or other customer for which such
Securities are held in such accounts and the respective
interests therein.
(3) The Custodian may deposit and/or
maintain domestic Securities owned by a Fund in, and
each Fund hereby approves use of: (a) The Depository
Trust Company; (b) The Participants Trust Company; and
(c) any book-entry system as provided in (i) Subpart O
of Treasury Circular Xx. 000, 00 XXX 306.115, (ii)
Subpart B of Treasury Circular Public Debt Series Xx.
00-00, 00 XXX 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the
form of 31 CFR 306.115. Upon the receipt of Special
Instructions, the Custodian may deposit and/or maintain
domestic Securities owned by a Fund in any other
domestic clearing agency registered with the Securities
and Exchange Commission ("SEC") under Section 17A of
the Securities Exchange Act of 1934 (or as may
otherwise be authorized by the SEC to serve in the
capacity of depository or clearing agent for the
Securities or other assets of investment companies)
which acts as a Securities depository. Each of the
foregoing shall be referred to in this Agreement as a
"Securities System", and all such Securities Systems
shall be listed on the attached Appendix A. Use of a
Securities System shall be in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(i) The Custodian may deposit the Securities directly or through one or
more agents or Subcustodians which are also qualified to act as custodians
for investment companies.
(ii)The Custodian shall deposit and/or maintain the Securities in a
Securities System, provided that such Securities are represented in an
account ("Account") of the Custodian in the Securities System that includes
only assets held by the Custodian as a fiduciary, custodian or otherwise
for customers.
(iii)The books and records of the Custodian shall at all times
identify those Securities belonging to any one or more Funds which are
maintained in a Securities System.
(iv)The Custodian shall pay for Securities purchased for the account
of a Fund only upon (a) receipt of advice from the Securities System that
such Securities have been transferred to the Account of the Custodian in
accordance with the rules of the Securities System, and (b) the making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of such Fund. The Custodian shall transfer
Securities sold for the account of a Fund only upon (a) receipt of advice
from the Securities System that payment for such Securities has been
transferred to the Account of the Custodian in accordance with the rules
of the Securities System, and (b) the making of an entry on the records of
the Custodian to reflect such transfer and payment for the account of such
Fund. Copies of all advices from the Securities System relating to
transfers of Securities for the account of a Fund shall be maintained for
such Fund by the Custodian. The Custodian shall deliver to a Fund on the
next succeeding business day daily transaction reports which shall include
each day's transactions in the Securities System for the account of such
Fund. Such transaction reports shall be delivered to such Fund or any
agent designated by such Fund pursuant to Instructions, by computer or in
such other manner as such Fund and Custodian may agree.
(v)The Custodian shall, if requested by a Fund pursuant to
Instructions, provide such Fund with reports obtained by the Custodian or
any Subcustodian with respect to a Securities System's accounting system,
internal accounting control and procedures for safeguarding Securities
deposited in the Securities System.
(vi)Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System on behalf of a Fund as promptly
as practicable and shall take all actions reasonably practicable to
safeguard the Securities of such Fund maintained with such Securities
System.
(c) Free Delivery of Assets.
Notwithstanding any other provision of this
Agreement and except as provided in Section 3 hereof,
the Custodian, upon receipt of Special Instructions,
will undertake to make free delivery of Assets,
provided such Assets are on hand and available, in
connection with a Fund's transactions and to transfer
such Assets to such broker, dealer, Subcustodian, bank,
agent, Securities System or otherwise as specified in
such Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian
will exchange portfolio Securities held by it for a
Fund for other Securities or cash paid in connection
with any reorganization, recapitalization, merger,
consolidation, or conversion of convertible Securities,
and will deposit any such Securities in accordance with
the terms of any reorganization or protective plan.
Without Instructions, the Custodian is
authorized to exchange Securities held by it in
temporary form for Securities in definitive form, to
surrender Securities for transfer into a name or
nominee name as permitted in Section 4(b)(2), to effect
an exchange of shares in a stock split or when the par
value of the stock is changed, to sell any fractional
shares, and, upon receiving payment therefor, to
surrender bonds or other Securities held by it at
maturity or call.
(e) Purchases of Assets.
(1) Securities Purchases. In accordance
with Instructions, the Custodian shall, with respect to
a purchase of Securities, pay for such Securities out
of monies held for a Fund's account for which the
purchase was made, but only insofar as monies are
available therein for such purpose, and receive the
portfolio Securities so purchased. Unless the
Custodian has received Special Instructions to the
contrary, such payment will be made only upon receipt
of Securities by the Custodian, a clearing corporation
of a national Securities exchange of which the
Custodian is a member, or a Securities System in
accordance with the provisions of Section 4(b)(3)
hereof. Notwithstanding the foregoing, upon receipt of
Instructions: (i) in connection with a repurchase
agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from
the Securities System that the Securities underlying
such repurchase agreement have been transferred by
book-entry into the Account maintained with such
Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System
require that the Securities System may make payment of
such funds to the other party to the repurchase
agreement only upon transfer by book-entry of the
Securities underlying the repurchase agreement into
such Account; (ii) in the case of Interest Bearing
Deposits, currency deposits, and other deposits,
foreign exchange transactions, futures contracts or
options, pursuant to Sections 4(g), 4(h), 4(l), and
4(m) hereof, the Custodian may make payment therefor
before receipt of an advice of transaction; and (iii)
in the case of Securities as to which payment for the
Security and receipt of the instrument evidencing the
Security are under generally accepted trade practice or
the terms of the instrument representing the Security
expected to take place in different locations or
through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates,
derivatives and similar Securities, the Custodian may
make payment for such Securities prior to delivery
thereof in accordance with such generally accepted
trade practice or the terms of the instrument
representing such Security.
(2) Other Assets Purchased. Upon receipt of
Instructions and except as otherwise provided herein,
the Custodian shall pay for and receive other Assets
for the account of a Fund as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with
Instructions, the Custodian will, with respect to a
sale, deliver or cause to be delivered the Securities
thus designated as sold to the broker or other person
specified in the Instructions relating to such sale.
Unless the Custodian has received Special Instructions
to the contrary, such delivery shall be made only upon
receipt of payment therefor in the form of: (a) cash,
certified check, bank cashier's check, bank credit, or
bank wire transfer; (b) credit to the account of the
Custodian with a clearing corporation of a national
Securities exchange of which the Custodian is a member;
or (c) credit to the Account of the Custodian with a
Securities System, in accordance with the provisions of
Section 4(b)(3) hereof. Notwithstanding the foregoing,
Securities held in physical form may be delivered and
paid for in accordance with "street delivery custom" to
a broker or its clearing agent, against delivery to the
Custodian of a receipt for such Securities, provided
that the Custodian shall have taken reasonable steps to
ensure prompt collection of the payment for, or return
of, such Securities by the broker or its clearing
agent, and provided further that the Custodian shall
not be responsible for the selection of or the failure
or inability to perform of such broker or its clearing
agent or for any related loss arising from delivery or
custody of such Securities prior to receiving payment
therefor.
(2) Other Assets Sold. Upon receipt of
Instructions and except as otherwise provided herein,
the Custodian shall receive payment for and deliver
other Assets for the account of a Fund as provided in
Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to
the purchase of an option or sale of a covered call
option, the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing
the purchase or writing of the option by a Fund; (b) if
the transaction involves the sale of a covered call
option, deposit and maintain in a segregated account
the Securities (either physically or by book-entry in a
Securities System) subject to the covered call option
written on behalf of such Fund; and (c) pay, release
and/or transfer such Securities, cash or other Assets
in accordance with any notices or other communications
evidencing the expiration, termination or exercise of
such options which are furnished to the Custodian by
the Options Clearing Corporation (the "OCC"), the
securities or options exchanges on which such options
were traded, or such other organization as may be
responsible for handling such option transactions.
(2) Upon receipt of Instructions relating to
the sale of a naked option (including stock index and
commodity options), the Custodian, the appropriate Fund
and the broker-dealer shall enter into an agreement to
comply with the rules of the OCC or of any registered
national securities exchange or similar
organizations(s). Pursuant to that agreement and such
Fund's Instructions, the Custodian shall: (a) receive
and retain confirmations or other documents, if any,
evidencing the writing of the option; (b) deposit and
maintain in a segregated account, Securities (either
physically or by book-entry in a Securities System),
cash and/or other Assets; and (c) pay, release and/or
transfer such Securities, cash or other Assets in
accordance with any such agreement and with any notices
or other communications evidencing the expiration,
termination or exercise of such option which are
furnished to the Custodian by the OCC, the securities
or options exchanges on which such options were traded,
or such other organization as may be responsible for
handling such option transactions. The appropriate
Fund and the broker-dealer shall be responsible for
determining the quality and quantity of assets held in
any segregated account established in compliance with
applicable margin maintenance requirements and the
performance of other terms of any option contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall
enter into a futures margin procedural agreement among
the appropriate Fund, the Custodian and the designated
futures commission merchant (a "Procedural Agreement").
Under the Procedural Agreement the Custodian shall:
(a) receive and retain confirmations, if any,
evidencing the purchase or sale of a futures contract
or an option on a futures contract by such Fund; (b)
deposit and maintain in a segregated account cash,
Securities and/or other Assets designated as initial,
maintenance or variation "margin" deposits intended to
secure such Fund's performance of its obligations under
any futures contracts purchased or sold, or any options
on futures contracts written by such Fund, in
accordance with the provisions of any Procedural
Agreement designed to comply with the provisions of the
Commodity Futures Trading Commission and/or any
commodity exchange or contract market (such as the
Chicago Board of Trade), or any similar
organization(s), regarding such margin deposits; and
(c) release Assets from and/or transfer Assets into
such margin accounts only in accordance with any such
Procedural Agreements. The appropriate Fund and such
futures commission merchant shall be responsible for
determining the type and amount of Assets held in the
segregated account or paid to the broker-dealer in
compliance with applicable margin maintenance
requirements and the performance of any futures
contract or option on a futures contract in accordance
with its terms.
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian
shall establish and maintain on its books a segregated
account or accounts for and on behalf of a Fund, into
which account or accounts may be transferred Assets of
such Fund, including Securities maintained by the
Custodian in a Securities System
pursuant to Paragraph (b)(3) of this Section 4, said
account or accounts to be maintained (i) for the
purposes set forth in Sections 4(g), 4(h) and 4(n) and
(ii) for the purpose of compliance by such Fund with
the procedures required by the SEC Investment Company
Act Release Number 10666 or any subsequent release or
releases relating to the maintenance of segregated
accounts by registered investment companies, or (iii)
for such other purposes as may be set forth, from time
to time, in Special Instructions. The Custodian shall
not be responsible for the determination of the type or
amount of Assets to be held in any segregated account
referred to in this paragraph, or for compliance by the
Fund with required procedures noted in (ii) above.
(j) Depositary Receipts.
Upon receipt of Instructions, the Custodian shall
surrender or cause to be surrendered Securities to the
depositary used for such Securities by an issuer of
American Depositary Receipts or International
Depositary Receipts (hereinafter referred to,
collectively, as "ADRs"), against a written receipt
therefor adequately describing such Securities and
written evidence satisfactory to the organization
surrendering the same that the depositary has
acknowledged receipt of instructions to issue ADRs with
respect to such Securities in the name of the Custodian
or a nominee of the Custodian, for delivery in
accordance with such instructions.
Upon receipt of Instructions, the Custodian shall
surrender or cause to be surrendered ADRs to the issuer
thereof, against a written receipt therefor adequately
describing the ADRs surrendered and written evidence
satisfactory to the organization surrendering the same
that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the
Securities underlying such ADRs in accordance with such
instructions.
(k) Corporate Actions, Put Bonds, Called
Bonds, Etc.
Upon receipt of Instructions, the Custodian shall:
(a) deliver warrants, puts, calls, rights or similar
Securities to the issuer or trustee thereof (or to the
agent of such issuer or trustee) for the purpose of
exercise or sale, provided that the new Securities,
cash or other Assets, if any, acquired as a result of
such actions are to be delivered to the Custodian; and
(b) deposit Securities upon invitations for tenders
thereof, provided that the consideration for such
Securities is to be paid or delivered to the Custodian,
or the tendered Securities are to be returned to the
Custodian.
Notwithstanding any provision of this Agreement to
the contrary, the Custodian shall take all necessary
action, unless otherwise directed to the contrary in
Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions,
or similar rights of security ownership, and shall
notify the appropriate Fund of such action in writing
by facsimile transmission or in such other manner as
such Fund and Custodian may agree in writing.
The Fund agrees that if it gives an Instruction
for the performance of an act on the last permissible
date of a period established by any optional offer or
on the last permissible date for the performance of
such act, the Fund shall hold the Bank harmless from
any adverse consequences in connection with acting upon
or failing to act upon such Instructions.
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the
Custodian to purchase interest bearing fixed term and
call deposits (hereinafter referred to, collectively,
as "Interest Bearing Deposits") for the account of a
Fund, the Custodian shall purchase such Interest
Bearing Deposits in the name of such Fund with such
banks or trust companies, including the Custodian, any
Subcustodian or any subsidiary or affiliate of the
Custodian (hereinafter referred to as "Banking
Institutions"), and in such amounts as such Fund may
direct pursuant to Instructions. Such Interest Bearing
Deposits may be denominated in U.S. dollars or other
currencies, as such Fund may determine and direct
pursuant to Instructions. The responsibilities of the
Custodian to a Fund for Interest Bearing Deposits
issued by the Custodian shall be that of a U.S. bank
for a similar deposit. With respect to Interest
Bearing Deposits other than those issued by the
Custodian, (a) the Custodian shall be responsible for
the collection of income and the transmission of cash
to and from such accounts; and (b) the Custodian shall
have no duty with respect to the selection of the
Banking Institution or for the failure of such Banking
Institution to pay upon demand.
(m) Foreign Exchange Transactions.
(l) Each Fund hereby appoints the
Custodian as its agent in the execution of all currency
exchange transactions. The Custodian agrees to provide
exchange rate and U.S. Dollar information, in writing,
to the Funds. Such information shall be supplied by
the Custodian at least by the business day prior to the
value date of the foreign exchange transaction,
provided that the Custodian receives the request for
such information at least two business days prior to
the value date of the transaction.
(2) Upon receipt of Instructions, the
Custodian shall settle foreign exchange contracts or
options to purchase and sell foreign currencies for
spot and future delivery on behalf of and for the
account of a Fund with such currency brokers or Banking
Institutions as such Fund may determine and direct
pursuant to Instructions. If, in its Instructions, a
Fund does not direct the Custodian to utilize a
particular currency broker or Banking Institution, the
Custodian is authorized to select such currency broker
or Banking Institution as it deems appropriate to
execute the Fund's foreign currency transaction.
(3) Each Fund accepts full
responsibility for its use of third party foreign
exchange brokers and for execution of said foreign
exchange contracts and understands that the Fund shall
be responsible for any and all costs and interest
charges which may be incurred as a result of the
failure or delay of its third party broker to deliver
foreign exchange. The Custodian shall have no
responsibility or liability with respect to the
selection of the currency brokers or Banking
Institutions with which a Fund deals or the performance
of such brokers or Banking Institutions.
(4) Notwithstanding anything to the
contrary contained herein, upon receipt of Instructions
the Custodian may, in connection with a foreign
exchange contract, make free outgoing payments of cash
in the form of U.S. Dollars or foreign currency prior
to receipt of confirmation of such foreign exchange
contract or confirmation that the countervalue currency
completing such contract has been delivered or
received.
(5) The Custodian shall not be
obligated to enter into foreign exchange transactions
as principal. However, if the Custodian has made
available to a Fund its services as a principal in
foreign exchange transactions and subject to any
separate agreement between the parties relating to such
transactions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on
behalf of and for the account of the Fund, with the
Custodian as principal.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from a
Fund, the Custodian will release or cause to be
released Securities held in custody to the pledgees
designated in such Instructions by way of pledge or
hypothecation to secure loans incurred by such Fund
with various lenders including but not limited to UMB
Bank, n.a.; provided, however, that the Securities
shall be released only upon payment to the Custodian of
the monies borrowed, except that in cases where
additional collateral is required to secure existing
borrowings, further Securities may be released or
delivered, or caused to be released or delivered for
that purpose upon receipt of Instructions. Upon
receipt of Instructions, the Custodian will pay, but
only from funds available for such purpose, any such
loan upon re-delivery to it of the Securities pledged
or hypothecated therefor and upon surrender of the note
or notes evidencing such loan. In lieu of delivering
collateral to a pledgee, the Custodian, on the receipt
of Instructions, shall transfer the pledged Securities
to a segregated account for the benefit of the pledgee.
(2) Upon receipt of Special Instructions,
and execution of a separate Securities Lending
Agreement, the Custodian will release Securities held
in custody to the borrower designated in such
Instructions and may, except as otherwise provided
below, deliver such Securities prior to the receipt of
collateral, if any, for such borrowing, provided that,
in case of loans of Securities held by a Securities
System that are secured by cash collateral, the
Custodian's instructions to the Securities System shall
require that the Securities System deliver the
Securities of the appropriate Fund to the borrower
thereof only upon receipt of the collateral for such
borrowing. The Custodian shall have no responsibility
or liability for any loss arising from the delivery of
Securities prior to the receipt of collateral. Upon
receipt of Instructions and the loaned Securities, the
Custodian will release the collateral to the borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all
stock dividends, rights, and other items of like nature
and, upon receipt of Instructions, take action with
respect to the same as directed in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all
routine and mechanical matters in accordance with
industry standards in connection with the sale,
exchange, substitution, purchase, transfer, or other
dealings with Securities or other property of each Fund
except as may be otherwise provided in this Agreement
or directed from time to time by Instructions from any
particular Fund. The Custodian may also make payments
to itself or others from the Assets for disbursements
and out-of-pocket expenses incidental to handling
Securities or other similar items relating to its
duties under this Agreement, provided that all such
payments shall be accounted for to the appropriate
Fund.
(q) Collections.
The Custodian shall (a) collect amounts
due and payable to each Fund with respect to portfolio
Securities and other Assets; (b) promptly credit to the
account of each Fund all income and other payments
relating to portfolio Securities and other Assets held
by the Custodian hereunder upon Custodian's receipt of
such income or payments or as otherwise agreed in
writing by the Custodian and any particular Fund; (c)
promptly endorse and deliver any instruments required
to effect such collection; and (d) promptly execute
ownership and other certificates and affidavits for all
federal, state, local and foreign tax purposes in
connection with receipt of income or other payments
with respect to portfolio Securities and other Assets,
or in connection with the transfer of such Securities
or other Assets; provided, however, that with respect
to portfolio Securities registered in so-called street
name, or physical Securities with variable interest
rates, the Custodian shall use its best efforts to
collect amounts due and payable to any such Fund. The
Custodian shall notify a Fund in writing by facsimile
transmission or in such other manner as such Fund and
Custodian may agree in writing if any amount payable
with respect to portfolio Securities or other Assets is
not received by the Custodian when due. The Custodian
shall not be responsible for the collection of amounts
due and payable with respect to portfolio Securities or
other Assets that are in default.
(r) Bank Accounts.
Upon Instructions, the Custodian shall open
and operate a bank account or accounts on the books of
the Custodian; provided that such bank account(s) shall
be in the name of the Custodian or a nominee thereof,
for the account of one or more Funds, and shall be
subject only to draft or order of the Custodian. The
responsibilities of the Custodian to any one or more
such Funds for deposits accepted on the Custodian's
books shall be that of a U.S. bank for a similar
deposit.
(s) Dividends, Distributions and
Redemptions.
To enable each Fund to pay dividends or other
distributions to shareholders of each such Fund and to
make payment to shareholders who have requested
repurchase or redemption of their shares of each such
Fund (collectively, the "Shares"), the Custodian shall
release cash or Securities insofar as available. In
the case of cash, the Custodian shall, upon the receipt
of Instructions, transfer such funds by check or wire
transfer to any account at any bank or trust company
designated by each such Fund in such Instructions. In
the case of Securities, the Custodian shall, upon the
receipt of Special Instructions, make such transfer to
any entity or account designated by each such Fund in
such Special Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds
representing cash payments received for shares issued
or sold from time to time by each Fund, and shall
credit such funds to the account of the appropriate
Fund. The Custodian shall notify the appropriate Fund
of Custodian's receipt of cash in payment for shares
issued by such Fund by facsimile transmission or in
such other manner as such Fund and the Custodian shall
agree. Upon receipt of Instructions, the Custodian
shall: (a) deliver all federal funds received by the
Custodian in payment for shares as may be set forth in
such Instructions and at a time agreed upon between the
Custodian and such Fund; and (b) make federal funds
available to a Fund as of specified times agreed upon
from time to time by such Fund and the Custodian, in
the amount of checks received in payment for shares
which are deposited to the accounts of such Fund.
(u) Proxies and Notices; Compliance with the Shareholders
Communication Act of 1985.
The Custodian shall deliver or cause to be
delivered to the appropriate Fund all forms of proxies,
all notices of meetings, and any other notices or
announcements affecting or relating to Securities owned
by such Fund that are received by the Custodian, any
Subcustodian, or any nominee of either of them, and,
upon receipt of Instructions, the Custodian shall
execute and deliver, or cause such Subcustodian or
nominee to execute and deliver, such proxies or other
authorizations as may be required. Except as directed
pursuant to Instructions, neither the Custodian nor any
Subcustodian or nominee shall vote upon any such
Securities, or execute any proxy to vote thereon, or
give any consent or take any other action with respect
thereto.
The Custodian will not release the identity
of any 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 any such Fund
unless a particular Fund directs the Custodian
otherwise in writing.
(v) Books and Records.
The Custodian shall maintain such records
relating to its activities under this Agreement as are
required to be maintained by Rule 31a-1 under the
Investment Company Act of 1940 ("xxx 0000 Xxx") and to
preserve them for the periods prescribed in Rule 31a-2
under the 1940 Act. These records shall be open for
inspection by duly authorized officers, employees or
agents (including independent public accountants) of
the appropriate Fund during normal business hours of
the Custodian.
The Custodian shall provide accountings
relating to its activities under this Agreement as
shall be agreed upon by each Fund and the Custodian.
(w) Opinion of Fund's Independent Certified
Public Accountants.
The Custodian shall take all reasonable
action as each Fund may request to obtain from year to
year favorable opinions from each such Fund's
independent certified public accountants with respect
to the Custodian's activities hereunder and in
connection with the preparation of each such Fund's
periodic reports to the SEC and with respect to any
other requirements of the SEC.
(x) Reports by Independent Certified Public
Accountants.
At the request of a Fund, the Custodian shall
deliver to such Fund a written report prepared by the
Custodian's independent certified public accountants
with respect to the services provided by the Custodian
under this Agreement, including, without limitation,
the Custodian's accounting system, internal accounting
control and procedures for safeguarding cash,
Securities and other Assets, including cash, Securities
and other Assets deposited and/or maintained in a
Securities System or with a Subcustodian. Such report
shall be of sufficient scope and in sufficient detail
as may reasonably be required by such Fund and as may
reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian
shall pay, or cause to be paid, all bills, statements,
or other obligations of a Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the
relevant provisions of this Agreement, the Custodian
may appoint one or more Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians, or Interim
Subcustodians (as each are hereinafter defined) to act
on behalf of any one or more Funds. A Domestic
Subcustodian, in accordance with the provisions of this
Agreement, may also appoint a Foreign Subcustodian,
Special Subcustodian, or Interim Subcustodian to act on
behalf of any one or more Funds. For purposes of this
Agreement, all Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians and Interim
Subcustodians shall be referred to collectively as
"Subcustodians".
(a) Domestic Subcustodians.
The Custodian may, at any time and from time
to time, appoint any bank as defined in Section 2(a)(5)
of the 1940 Act or any trust company or other entity,
any of which meet the requirements of a custodian under
Section 17(f) of the 1940 Act and the rules and
regulations thereunder, to act for the Custodian on
behalf of any one or more Funds as a subcustodian for
purposes of holding Assets of such Fund(s) and
performing other functions of the Custodian within the
United States (a "Domestic Subcustodian"). Each Fund
shall approve in writing the appointment of the
proposed Domestic Subcustodian; and the Custodian's
appointment of any such Domestic Subcustodian shall not
be effective without such prior written approval of the
Fund(s). Each such duly approved Domestic Subcustodian
shall be listed on Appendix A attached hereto, as it
may be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a
Domestic Subcustodian to appoint, any bank, trust
company or other entity meeting the requirements of an
"eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder to
act for the Custodian on behalf of any one or more
Funds as a subcustodian or sub-subcustodian (if
appointed by a Domestic Subcustodian) for purposes of
holding Assets of the Fund(s) and performing other
functions of the Custodian in countries other than the
United States of America (hereinafter referred to as a
"Foreign Subcustodian" in the context of either a
subcustodian or a sub-subcustodian); provided that the
Custodian shall have obtained written confirmation from
each Fund of the approval of the Board of Directors or
other governing body of each such Fund (which approval
may be withheld in the sole discretion of such Board of
Directors or other governing body or entity) with
respect to (i) the identity of any proposed Foreign
Subcustodian (including branch designation), (ii) the
country or countries in which, and the securities
depositories or clearing agencies (hereinafter
"Securities Depositories and Clearing Agencies"), if
any, through which, the Custodian or any proposed
Foreign Subcustodian is authorized to hold Securities
and other Assets of each such Fund, and (iii) the form
and terms of the subcustodian agreement to be entered
into with such proposed Foreign Subcustodian. Each
such duly approved Foreign Subcustodian and the
countries where and the Securities Depositories and
Clearing Agencies through which they may hold
Securities and other Assets of the Fund(s) shall be
listed on Appendix A attached hereto, as it may be
amended, from time to time. Each Fund shall be
responsible for informing the Custodian sufficiently in
advance of a proposed investment which is to be held in
a country in which no Foreign Subcustodian is
authorized to act, in order that there shall be
sufficient time for the Custodian, or any Domestic
Subcustodian, to effect the appropriate arrangements
with a proposed Foreign Subcustodian, including
obtaining approval as provided in this Section 5(b).
In connection with the appointment of any Foreign
Subcustodian, the Custodian shall, or shall cause the
Domestic Subcustodian to, enter into a subcustodian
agreement with the Foreign Subcustodian in form and
substance approved by each such Fund. The Custodian
shall not consent to the amendment of, and shall cause
any Domestic Subcustodian not to consent to the
amendment of, any agreement entered into with a Foreign
Subcustodian, which materially affects any Fund's
rights under such agreement, except upon prior written
approval of such Fund pursuant to Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event
that a Fund shall invest in an Asset to be held in a
country in which no Foreign Subcustodian is
authorized to act, the Custodian shall notify such Fund
in writing by facsimile transmission or in such other
manner as such Fund and the Custodian shall agree in
writing of the unavailability of an approved Foreign
Subcustodian in such country; and upon the receipt of
Special Instructions from such Fund, the Custodian
shall, or shall cause its Domestic Subcustodian to,
appoint or approve an entity (referred to herein as an
"Interim Subcustodian") designated in such Special
Instructions to hold such Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the
Custodian shall, on behalf of a Fund, appoint one or
more banks, trust companies or other entities
designated in such Special Instructions to act for the
Custodian on behalf of such Fund as a subcustodian for
purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other
entities through the use of a common custodian or
subcustodian; (ii) providing depository and clearing
agency services with respect to certain variable rate
demand note Securities, (iii) providing depository and
clearing agency services with respect to dollar
denominated Securities, and (iv) effecting any other
transactions designated by such Fund in such Special
Instructions. Each such designated subcustodian
(hereinafter referred to as a "Special Subcustodian")
shall be listed on Appendix A attached hereto, as it
may be amended from time to time. In connection with
the appointment of any Special Subcustodian, the
Custodian shall enter into a subcustodian agreement
with the Special Subcustodian in form and substance
approved by the appropriate Fund in Special
Instructions. The Custodian shall not amend any
subcustodian agreement entered into with a Special
Subcustodian, or waive any rights under such agreement,
except upon prior approval pursuant to Special
Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its
discretion upon notification to the appropriate
Fund(s), terminate any Subcustodian of such Fund(s) in
accordance with the termination provisions under the
applicable subcustodian agreement, and upon the receipt
of Special Instructions, the Custodian will terminate
any Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement.
(f) Certification Regarding Foreign
Subcustodians.
Upon request of a Fund, the Custodian shall
deliver to such Fund a certificate stating: (i) the
identity of each Foreign Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which
and the Securities Depositories and Clearing Agencies
through which each such Foreign Subcustodian is then
holding cash, Securities and other Assets of such Fund;
and (iii) such other information as may be requested by
such Fund, and as the Custodian shall be reasonably
able to obtain, to evidence compliance with rules and
regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to a Fund for
all losses, damages and reasonable costs and expenses
suffered or incurred by such Fund resulting from the
gross negligence or willful misfeasance of the
Custodian; provided, however, in no event shall the
Custodian be liable for special, indirect or
consequential damages arising under or in connection
with this Agreement.
(b) Actions Prohibited by Applicable Law,
Events Beyond Custodian's Control, Sovereign Risk, Etc.
In no event shall the Custodian or any
Domestic Subcustodian incur liability hereunder (i) if
the Custodian or any Subcustodian or Securities System,
or any subcustodian, Securities System, Securities
Depository or Clearing Agency utilized by the Custodian
or any such Subcustodian, or any nominee of the
Custodian or any Subcustodian (individually, a
"Person") is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which
this Agreement provides shall be performed or omitted
to be performed, by reason of: (a) any provision of any
present or future law or regulation or order of the
United States of America, or any state thereof, or of
any foreign country, or political subdivision thereof
or of any court of competent jurisdiction (and neither
the Custodian nor any other Person shall be obligated
to take any action contrary thereto); or (b) any event
beyond the control of the Custodian or other Person
such as armed conflict, riots, strikes, lockouts, labor
disputes, equipment or transmission failures, natural
disasters, or failure of the mails, transportation,
communications or power supply; or (ii) for any loss,
damage, cost or expense resulting from "Sovereign
Risk." A "Sovereign Risk" shall mean nationalization,
expropriation, currency devaluation, revaluation or
fluctuation, confiscation, seizure, cancellation,
destruction or similar action by any governmental
authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such
governmental authority of currency restrictions,
exchange controls, taxes, levies or other charges
affecting a Fund's Assets; or acts of armed conflict,
terrorism, insurrection or revolution; or any other act
or event beyond the Custodian's or such other Person's
control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic
Subcustodian shall have any liability in respect of any
loss, damage or expense suffered by a Fund, insofar as
such loss, damage or expense arises from the
performance of the Custodian or any Domestic
Subcustodian in reliance upon records that were
maintained for such Fund by entities other than the
Custodian or any Domestic Subcustodian prior to the
Custodian's employment hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians
shall be entitled to receive and act upon advice of
counsel of its own choosing on all matters. The
Custodian and all Domestic Subcustodians shall be
without liability for any actions taken or omitted in
good faith pursuant to the advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian
may rely upon the advice of any Fund and upon
statements of such Fund's accountants and other persons
believed by it in good faith to be expert in matters
upon which they are consulted, and neither the
Custodian nor any Domestic Subcustodian shall be liable
for any actions taken or omitted, in good faith,
pursuant to such advice or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians
shall be fully protected and indemnified in acting as a
custodian hereunder upon any Resolutions of the Board
of Directors or Trustees, Instructions, Special
Instructions, advice, notice, request, consent,
certificate, instrument or paper 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 any Fund
hereunder a certificate signed by any officer of such
Fund authorized to countersign or confirm Special
Instructions.
(g) Exceptions from Liability.
Without limiting the generality of any other
provisions hereof, neither the Custodian nor any
Domestic Subcustodian shall be under any duty or
obligation to inquire into, nor be liable for:
(i)the validity of the issue of any Securities purchased by or for any
Fund, the legality of the purchase thereof or evidence of ownership
required to be received by any such Fund, or the propriety of the
decision to purchase or amount paid therefor;
(ii)the legality of the sale of any Securities by or for any Fund, or
the propriety of the amount for which the same were sold; or
(iii)any other expenditures, encumbrances of Securities, borrowings or
similar actions with respect to any Fund's Assets;
and may, until notified to the contrary, presume that
all Instructions or Special Instructions received by it
are not in conflict with or in any way contrary to any
provisions of any such Fund's Declaration of Trust,
Partnership Agreement, Articles of Incorporation or
By-Laws or votes or proceedings of the shareholders,
trustees, partners or directors of any such Fund, or
any such Fund's currently effective Registration
Statement on file with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF
OTHERS.
(a) Domestic Subcustodians
The Custodian shall be liable for the acts or
omissions of any Domestic Subcustodian to the same
extent as if such actions or omissions were performed
by the Custodian itself.
(b) Liability for Acts and Omissions of
Foreign Subcustodians.
The Custodian shall be liable to a Fund for
any loss or damage to such Fund caused by or resulting
from the acts or omissions of any Foreign Subcustodian
to the extent that, under the terms set forth in the
subcustodian agreement between the Custodian or a
Domestic Subcustodian and such Foreign Subcustodian,
the Foreign Subcustodian has failed to perform in
accordance with the standard of conduct imposed under
such subcustodian agreement and the Custodian or
Domestic Subcustodian recovers from the Foreign
Subcustodian under the applicable subcustodian
agreement.
(c) Securities Systems, Interim
Subcustodians, Special Subcustodians, Securities
Depositories and Clearing Agencies.
The Custodian shall not be liable to any Fund
for any loss, damage or expense suffered or incurred by
such Fund resulting from or occasioned by the actions
or omissions of a Securities System, Interim
Subcustodian, Special Subcustodian, or Securities
Depository and Clearing Agency unless such loss, damage
or expense is caused by, or results from, the gross
negligence or willful misfeasance of the Custodian.
(d) Defaults or Insolvencies of Brokers,
Banks, Etc.
The Custodian shall not be liable for any
loss, damage or expense suffered or incurred by any
Fund resulting from or occasioned by the actions,
omissions, neglects, defaults or insolvency of any
broker, bank, trust company
or any other person with whom the Custodian may deal
(other than any of such entities acting as a
Subcustodian, Securities System or Securities
Depository and Clearing Agency, for whose actions the
liability of the Custodian is set out elsewhere in this
Agreement) unless such loss, damage or expense is
caused by, or results from, the gross negligence or
willful misfeasance of the Custodian.
(e) Reimbursement of Expenses.
Each Fund agrees to reimburse the Custodian
for all out-of-pocket expenses incurred by the
Custodian in connection with this Agreement, but
excluding salaries and usual overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by Fund.
Subject to the limitations set forth in this
Agreement, each Fund agrees to indemnify and hold
harmless the Custodian and its nominees from all
losses, damages and expenses (including attorneys'
fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the
Custodian, its employees or agents in the performance
of its duties and obligations under this Agreement,
including, but not limited to, any indemnification
obligations undertaken by the Custodian under any
relevant subcustodian agreement; provided, however,
that such indemnity shall not apply to the extent the
Custodian is liable under Sections 6 or 7 hereof.
If any Fund requires the Custodian to take
any action with respect to Securities, which action
involves the payment of money or which may, in the
opinion of the Custodian, result in the Custodian or
its nominee assigned to such Fund being liable for the
payment of money or incurring liability of some other
form, such Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity
to the Custodian in an amount and form satisfactory to
it.
(b) Indemnification by Custodian.
Subject to the limitations set forth in this
Agreement and in addition to the obligations provided
in Sections 6 and 7, the Custodian agrees to indemnify
and hold harmless each Fund from all losses, damages
and expenses suffered or incurred by each such Fund
caused by the gross negligence or willful misfeasance
of the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions,
the Custodian or any Subcustodian, Securities System,
or Securities Depository or Clearing Agency acting
either directly or indirectly under agreement with the
Custodian (each of which for purposes of this Section 9
shall be referred to as "Custodian"), makes any payment
or transfer of funds on behalf of any Fund as to which
there would be, at the close of business on the date of
such payment or transfer, insufficient funds held by
the Custodian on behalf of any such Fund, the Custodian
may, in its discretion without further Instructions,
provide an advance ("Advance") to any such Fund in an
amount sufficient to allow the completion of the
transaction by reason of which such payment or transfer
of funds is to be made. In addition, in the event the
Custodian is directed by Instructions to make any
payment or transfer of funds on behalf of any Fund as
to which it is subsequently determined that such Fund
has overdrawn its cash account with the Custodian as of
the close of business on the date of such payment or
transfer, said overdraft shall constitute an Advance.
Any Advance shall be payable by the Fund on behalf of
which the Advance was made on demand by Custodian,
unless otherwise agreed by such Fund and the Custodian,
and shall accrue interest from the date of the Advance
to the date of payment by such Fund to the Custodian at
a rate agreed upon in writing from time to time by the
Custodian and such Fund. It is understood that any
transaction in respect of which the Custodian shall
have made an Advance, including but not limited to a
foreign exchange contract or transaction in respect of
which the Custodian is not acting as a principal, is
for the account of and at the risk of the Fund on
behalf of which the Advance was made, and not, by
reason of such Advance, deemed to be a transaction
undertaken by the Custodian for its own account and
risk. The Custodian and each of the Funds which are
parties to this Agreement acknowledge that the purpose
of Advances is to finance temporarily the purchase or
sale of Securities for prompt delivery in accordance
with the settlement terms of such transactions or to
meet emergency expenses not reasonably foreseeable by a
Fund. The Custodian shall promptly notify the
appropriate Fund of any Advance. Such notification
shall be sent by facsimile transmission or in such
other manner as such Fund and the Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in
the Custody Account to secure payment of fees and
expenses for the services rendered under this
Agreement. If the Bank advances cash or securities to
the Fund for any purpose or in the event that the Bank
or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities
in connection with the performance of its duties
hereunder, except such as may arise from its or its
nominee's negligent action, negligent failure to act or
willful misconduct, any Property at any time held for
the Custody Account shall be security therefor and the
Fund hereby grants a security interest therein to the
Bank. The Fund shall promptly reimburse the Bank for
any such advance of cash or securities or any such
taxes, charges, expenses, assessments, claims or
liabilities upon request for payment, but should the
Fund fail to so reimburse the Bank, the Bank shall be
entitled to dispose of such Property to the extent
necessary to obtain reimbursement. The Bank shall be
entitled to debit any account of the Fund with the Bank
including, without limitation, the Custody Account, in
connection with any such advance and any interest on
such advance as the Bank deems reasonable.
11. COMPENSATION.
Each Fund will pay to the Custodian such
compensation as is agreed to in writing by the
Custodian and each such Fund from time to time. Such
compensation, together with all amounts for which the
Custodian is to be reimbursed in accordance with
Section 7(e), shall be billed to each such Fund and
paid in cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the
Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or
desirable in connection with the performance by the
Custodian or any Subcustodian of their respective
obligations under this Agreement or any applicable
subcustodian agreement.
13. TERMINATION AND ASSIGNMENT.
Any Fund or the Custodian may terminate this
Agreement by notice in writing, delivered or mailed,
postage prepaid (certified mail, return receipt
requested) to the other not less than 90 days prior to
the date upon which such termination shall take effect.
Upon termination of this Agreement, the appropriate
Fund shall pay to the Custodian such fees as may be due
the Custodian hereunder as well as its reimbursable
disbursements, costs and expenses paid or incurred.
Upon termination of this Agreement, the Custodian shall
deliver, at the terminating party's expense, all Assets
held by it hereunder to the appropriate Fund or as
otherwise designated by such Fund by Special
Instructions. Upon such delivery, the Custodian shall
have no further obligations or liabilities under this
Agreement except as to the final resolution of matters
relating to activity occurring prior to the effective
date of termination.
This Agreement may not be assigned by the
Custodian or any Fund without the respective consent of
the other, duly authorized by a resolution by its Board
of Directors or Trustees.
14. ADDITIONAL FUNDS. An additional Fund or
Funds may become a party to this Agreement after the
date hereof by an instrument in writing to such effect
signed by such Fund or Funds and the Custodian. If
this Agreement is terminated as to one or more of the
Funds (but less than all of the Funds) or if an
additional Fund or Funds shall become a party to this
Agreement, there shall be delivered to each party an
Appendix B or an amended Appendix B, signed by each of
the additional Funds (if any) and each of the remaining
Funds as well as the Custodian, deleting or adding such
Fund or Funds, as the case may be. The termination of
this Agreement as to less than all of the Funds shall
not affect the obligations of the Custodian and the
remaining Funds hereunder as set forth on the signature
page hereto and in Appendix B as revised from time to
time.
15. NOTICES.
As to each Fund, notices, requests, instructions
and other writings delivered to Frontegra Funds, Inc.,
000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xx,
00000 postage prepaid, or to such other address as any
particular Fund may have designated to the Custodian in
writing, shall be deemed to have been properly
delivered or given to a Fund.
Notices, requests, instructions and other writings
delivered to the Securities Administration Department
of the Custodian at its office at 000 Xxxxx Xxxxxxxxx,
Xxxxxx Xxxx, Xxxxxxxx, or mailed postage prepaid, to
the Custodian's Securities Administration Department,
Post Office Box 419226, Xxxxxx Xxxx, Xxxxxxxx 00000, or
to such other addresses as the Custodian may have
designated to each Fund in writing, shall be deemed to
have been properly delivered or given to the Custodian
hereunder; provided, however, that procedures for the
delivery of Instructions and Special Instructions shall
be governed by Section 2(c) hereof.
16. MISCELLANEOUS.
(a) This Agreement is executed and delivered
in the State of Missouri and shall be governed by the
laws of such state.
(b) All of the terms and provisions of this
Agreement shall be binding upon, and inure to the
benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be
amended, modified or waived, in any manner except in
writing, properly executed by both parties hereto;
provided, however, Appendix A may be amended from time
to time as Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians, and Securities
Depositories and Clearing Agencies are approved or
terminated according to the terms of this Agreement.
(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 shall be effective as of
the date of execution hereof.
(f) 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.
(g) The following terms are defined terms
within the meaning of this Agreement, and the
definitions thereof are found in the following sections
of the Agreement:
Term Section
Account
4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
Liability 10
OCC 4(g)(2)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2
Securities Depositories and 5(b)
Clearing Agencies
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2
Special Subcustodian 5(c)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this
Agreement is held to be illegal, in conflict with any
law or otherwise invalid by any court of competent
jurisdiction, the remaining portion or portions shall
be considered severable and shall not be affected, and
the rights and obligations of the parties shall be
construed and enforced as if this Agreement did not
contain the particular part, term or provision held to
be illegal or invalid.
(i) This Agreement constitutes the entire
understanding and agreement of the parties hereto with
respect to the subject matter hereof, and accordingly
supersedes, as of the effective date of this Agreement,
any custodian agreement heretofore in effect between
the Fund and the Custodian.
IN WITNESS WHEREOF, the parties hereto have caused
this Custody Agreement to be executed by their
respective duly authorized officers.
FRONTEGRA FUNDS, INC.
ATTEST:
By:_________________________
Name:
Title:
Date:
UMB BANK, N.A.
ATTEST:
By:__________________________
Name:
Title:
Date:
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
Xxxxxx Xxxxxxx Trust Company (Foreign Securities Only)
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
Frontegra Funds, Inc. UMB Bank, n.a.
By:___________________________ By:____________________________
Name: Name:
Title: Title:
Date: Date:
APPENDIX B
CUSTODY AGREEMENT
The following open-end management investment
companies ("Funds") are hereby made parties to the
Custody Agreement dated , 199 ,
with UMB Bank, n.a. ("Custodian") and Frontegra Funds,
Inc. and agree to be bound by all the terms and
conditions contained in said Agreement:
LIST THE FUNDS
Frontegra Total Return Bond Fund
ATTEST:____________________
FRONTEGRA FUNDS, INC.
By:__________________________
Name:
Title:
Date:
ATTEST:_____________________
UMB BANK, N.A.
By:____________________________
Name:
Title:
Date: