AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
TRANSFER AGENCY SERVICES
AND
CUSTODY SERVICES
AGREEMENT made as of August 31, 1998, by and between those investment
companies listed on Exhibit 1, as may be amended from time to time, having their
principal office and place of business at Xxx Xxxx Xxxxxxx, Xxxxx Xxxxx, Xxxx,
Xxxxxx 00000 (the "Investment Company"), on behalf of the portfolios
(individually referred to herein as a "Fund" and collectively as "Funds") of the
Investment Company, and RUSHMORE TRUST AND SAVINGS, FSB, a Federal savings bank,
having its principal office and place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000, on behalf of itself and its affiliates (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), with authorized shares of capital stock or beneficial interest
("Shares");
WHEREAS, the Investment Company desires to retain the Company as fund
accountant to provide Fund Accounting Services (as herein defined) including
certain pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes"), and the Company
desires to accept such appointment;
WHEREAS, the Investment Company desires to appoint the Company as its
transfer agent and dividend disbursing agent to provide it with Transfer Agency
Services (as herein defined) and agent in connection with certain other
activities, and the Company desires to accept such appointment; and
WHEREAS, the Investment Company desires to appoint the Company as
depository of the Investment Company's assets and to provide certain other
Custodial Services (as herein defined), and the Company desires to accept such
appointment.
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
SECTION ONE: FUND ACCOUNTING SERVICES.
ARTICLE 1. APPOINTMENT.
The Investment Company hereby appoints the Company to provide certain
pricing and accounting services to the Funds, and/or the Classes, for the period
and on the terms set forth in this Agreement. The Company accepts such
appointment and agrees to furnish the services subject to the terms and
conditions set forth in this Agreement.
ARTICLE 2. THE DUTIES OF THE COMPANY.
Subject to the supervision and control of the Investment Company's Board of
Trustees or Directors ("Board"), the Company will assist the Investment Company
with regard to fund accounting for the Investment Company, and/or the Funds,
and/or the Classes, and in connection therewith undertakes to perform the
following specific services:
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent pricing
services selected by the Company in consultation with the adviser, or sources
selected by the adviser, and reviewed by the Board; secondarily, if a designated
pricing service does not provide a price for a security which the Company
believes should be available by market quotation, the Company may obtain a price
by calling brokers designated by the investment adviser of the fund holding the
security, or if the adviser does not supply the names of such brokers, the
Company will attempt on its own to find brokers to price those securities;
thirdly, for securities for which no market price is available, the Pricing
Committee of the Board will determine a fair value in good faith. Consistent
with Rule 2a-4 of the 1940 Act, estimates may be used where necessary or
appropriate. The Company's obligations with regard to the prices received from
outside pricing services and designated brokers or other outside sources, is to
exercise reasonable care in the supervision of the pricing agent. The Company is
not the guarantor of the securities prices received from such agents and the
Company is not liable to the Fund for potential errors in valuing a Fund's
assets or calculating the net asset value per share of such Fund or Class when
the calculations are based upon such prices. All of the above sources of prices
used as described are deemed by the Company to be authorized sources of security
prices. The Company provides daily to the adviser the securities prices used in
calculating the net asset value of the fund, for its use in preparing exception
reports for those prices on which the adviser has comment. Further, upon receipt
of the exception reports generated by the adviser, the Company diligently
pursues communication regarding exception reports with the designated pricing
agents;
B. Determine the net asset value per share of each Fund and/or Class, at
the time and in the manner from time to time determined by the Board and as set
forth in the Prospectus and Statement of Additional Information ("Prospectus")
of each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate realized capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Investment Company, including for each Fund, and/or Class, as
required under Section 31(a) of the 1940 Act and the Rules thereunder in
connection with the services provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records to be maintained by Rule 31a-1 under the 1940 Act in connection with
the services provided by the
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Company. The Company further agrees that all such records it maintains for the
Investment Company are the property of the Investment Company and further agrees
to surrender promptly to the Investment Company such records in the form such
records are maintained upon the Investment Company's request; and
G. At the request of the Investment Company, prepare various reports or
other financial documents in accordance with generally accepted accounting
principles as required by federal, state and other applicable laws and
regulations required in the ordinary course of business of the Investment
Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section One,
shall be referred to as "Fund Accounting Services."
The Company, in its sole discretion, may from time to time subcontract to,
employ or associate with itself such person or persons as the Company may
believe to be particularly suited to assist it in performing Fund Accounting
Services. Such person or persons may be affiliates of the Company, third-party
service providers, or they may be officers and employees who are employed by
both the Company and the Investment Company; provided, however, that the Company
shall be as fully responsible to each Fund for the acts and omissions of any
such subcontractor as it is for its own acts and omissions. The compensation of
such person or persons shall be paid by the Company and no obligation shall be
incurred on behalf of the Investment Company, the Funds, or the Classes in such
respect.
SECTION TWO: TRANSFER AGENCY SERVICES.
ARTICLE 3. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the
Investment Company hereby appoints the Company to act as, and the Company agrees
to act as, transfer agent and dividend disbursing agent for each Fund's Shares,
and agent in connection with any accumulation, open-account or similar plans
provided to the shareholders of any Fund ("Shareholder(s)"), including without
limitation any periodic investment plan or periodic withdrawal program.
ARTICLE 4. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Investment Company as
to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate documentation therefore
to the custodian of
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the relevant Fund. The Company shall notify the Fund and the custodian on a
daily basis of the total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the appropriate
number of Shares of each Fund and/or Class and hold such Shares in the
appropriate Shareholder accounts.
(3) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any reason, the
Company shall debit the Share account of the Shareholder by the number of
Shares that had been credited to its account upon receipt of the check or
other order, promptly mail a debit advice to the Shareholder, and notify
the Fund and/or Class of its action. In the event that the amount paid for
such Shares exceeds proceeds of the redemption of such Shares plus the
amount of any dividends paid with respect to such Shares, the Fund and/the
Class or its distributor will reimburse the Company on the amount of such
excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend Disbursing
Agent for the Funds in accordance with the provisions of its governing
document and the then-current Prospectus of the Fund. The Company shall
prepare and mail or credit income, capital gain, or any other payments to
Shareholders. As the Dividend Disbursing Agent, the Company shall, on or
before the payment date of any such distribution, notify the custodian of
the estimated amount required to pay any portion of said distribution which
is payable in cash and request the custodian to make available sufficient
funds for the cash amount to be paid out. The Company shall reconcile the
amounts so requested and the amounts actually received with the custodian
on a daily basis. If a Shareholder is entitled to receive additional Shares
by virtue of any such distribution or dividend, appropriate credits shall
be made to the Shareholder's account; and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Investment Company, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the procedures as
may be described in the Fund Prospectus or set forth in Proper
Instructions, deliver the appropriate instructions therefor to the
custodian. The Company shall notify the Funds on a daily basis of the total
amount of redemption requests processed and monies paid to the Company by
the custodian for redemptions.
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(2) Pursuant to redemption requests and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the appropriate
number of Shares of each Fund and/or Class to be redeemed and deduct such
Shares in the appropriate Shareholder accounts.
(3) At the appropriate time upon receiving redemption proceeds from
the custodian with respect to any redemption, the Company shall pay or
cause to be paid the redemption proceeds in the manner instructed by the
redeeming Shareholders, pursuant to procedures described in the
then-current Prospectus of the Fund.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis and
report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the Securities
and Exchange Commission ("SEC") a record of the total number of Shares of
the Fund and/or Class which are authorized, based upon data provided to it
by the Fund, and issued and outstanding. The Company shall also provide the
Fund on a regular basis or upon reasonable request with the total number of
Shares which are authorized and issued and outstanding, but shall have no
obligation when recording the issuance of Shares, except as otherwise set
forth herein, to monitor the issuance of such Shares or to take cognizance
of any laws relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be performed
hereunder in the form and manner as agreed to by the Investment Company or
the Fund to include a record for each Shareholder's account of the
following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
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(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is required by the
Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance of the
account;
(g) Any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods prescribed in
said rules as specifically noted below. Such record retention shall be at
the expense of the Company, and such records may be inspected by the Fund
at reasonable times. The Company may, at its option at any time, and shall
forthwith upon the Fund's demand, turn over to the Fund and cease to retain
in the Company's files, records and documents created and maintained by the
Company pursuant to this Agreement, which are no longer needed by the
Company in performance of its services or for its protection. If not so
turned over to the Fund, such records and documents will be retained by the
Company for six years from the year of creation, during the first two of
which such documents will be in readily accessible form. At the end of the
six year period, such records and documents will either be turned over to
the Fund or destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to Proper
Instructions delivered from time to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees, or other
transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
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(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if required,
mail to Shareholders, such notices for reporting dividends and
distributions paid as are required to be so filed and mailed and shall
withhold such sums as are required to be withheld under applicable federal
and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth above,
the Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, mailing Shareholder reports and Prospectuses to current
Shareholders, withholding taxes on accounts subject to back-up or
other withholding (including non-resident alien accounts), preparing
and filing reports on U.S. Treasury Department Form 1099 and other
appropriate forms required with respect to dividends and distributions
by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other conformable transactions
in Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information; and
(b) Provide a system which will enable the Fund to monitor the
total number of Shares of each Fund (and/or Class) sold in each state
("blue sky reporting"). The Fund shall by Proper Instructions (i)
identify to the Company those transactions and assets to be treated as
exempt from the blue sky reporting for each state and (ii) verify the
classification of transactions for each state on the system prior to
activation and thereafter monitor the daily activity for each state.
The responsibility of the Company for each Fund's (and/or Class's)
state blue sky registration status is limited solely to the recording
of the initial classification of transactions or accounts with regard
to blue sky compliance and the reporting of such transactions and
accounts to the Fund as provided above.
F. Other Duties
The Company shall answer correspondence from Shareholders relating to
their Share accounts and such other correspondence as may from time to time
be addressed to the Company.
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The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section Two,
shall hereafter be referred to as "Transfer Agency Services."
ARTICLE 5. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of the Securities
Act of 1933, as amended (the "1933 Act"), the 1940 Act and any laws, rules and
regulations of government authorities having jurisdiction.
B. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
SECTION THREE: CUSTODY SERVICES.
ARTICLE 6. APPOINTMENT.
The Fund hereby employs the Company (referred to as the "Custodian" in this
capacity) to serve as depository of its assets pursuant to Rule 17f-2 of the
1940 Act . The Fund agrees to deliver to the Custodian substantially all
securities and cash owned by it from time to time, and substantially all income,
principal or capital distributions or other payments received by it with respect
to such securities, and the cash consideration received for the issuance and
sale of Shares of the Funds from time to time. The Custodian will not be
responsible for any property of the Funds not delivered to the Custodian. The
services set forth in this Section Three along with other services that the
Custodian agrees in writing to perform for the Investment Company under this
Section Three shall be referred to as "Custodial Services."
ARTICLE 7. THE COMPANY AND ITS DUTIES.
A. Holding Securities
The Custodian will hold, earmark and physically segregate for the account
of the Funds all non-cash property, including all securities owned by the Funds,
other than securities maintained pursuant to Section J hereof in a clearing
agency which acts as a securities depository or in an authorized book-entry
system authorized by the U.S. Department of the Treasury, collectively referred
to herein as a "Securities System."
B. Delivery of Securities
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The Custodian will deliver securities held by the Custodian or in a
Securities System account only upon receipt of proper instructions, which may be
continuing instructions, and only in the following cases:
1. Upon sale of such securities for the account of a Fund and receipt of
payment therefor;
2. Upon receipt of payment in connection with any repurchase agreement
related to such securities entered into by a Fund;
3. In the case of a sale effected through a Securities System, in
accordance with the provisions of Section J hereof;
4. To the depository agent in connection with tenders or other similar
offers for securities of a Fund;
5. To the issuer thereof, or its agent, when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the Custodian;
6. To the issuer thereof, or its agent, for registration or
re-registration pursuant to the provisions of Section C hereof; or for exchange
for a different number of certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in any such case, the
new securities are to be delivered to the Custodian;
7. To the broker selling such securities for examination in accordance
with the "street delivery" custom; provided that the Custodian will maintain
procedures to ensure prompt return to the Custodian by the broker in the event
the broker elects not to accept such securities;
8. For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer or pursuant to provisions for conversion contained in
such securities, or pursuant to any deposit agreement; provided that, in any
such case, the new securities and cash, if any, are to be delivered to the
Custodian;
9. In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities for definitive securities;
provided that, in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10. For delivery in connection with any loans of securities made by a
Fund, but only against receipt of adequate collateral, as agreed upon from time
to time by the Custodian and a Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities;
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11. For delivery as security in connection with any borrowing by a Fund
requiring a pledge of assets by the Fund against receipt of amounts borrowed;
12. Upon receipt of instructions from the transfer agent for a Fund for
delivery to the Transfer Agent or to holders of Shares in connection with
distributions in kind in satisfaction of requests by holders of Shares for
repurchase or redemption; and
13. For any other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
signed by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, specifying the securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such purposes to be proper
corporate purposes, and naming the persons to whom delivery of such securities
will be made.
C. Registration of Securities
Securities held by the Custodian (other than bearer securities) will be
registered in the name of the Fund, or in the name of any nominee of the Fund,
the Custodian or any Securities System, or in the name or nominee name of any
agent or sub-custodian appointed pursuant to Section I hereof, provided that the
Custodian will maintain a mechanism for identifying all securities belonging to
the Fund, wherever held or registered. All securities accepted by the Custodian
hereunder will be in "street name" or other good delivery form.
D. Bank Accounts
If requested by a Fund, the Custodian will open and maintain a separate
bank account or accounts in the name of the Fund, subject only to draft or order
by the Custodian acting pursuant to the terms of this Agreement, and will hold
in such account or accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Fund, other than cash maintained by the
Fund in a bank account established and used in accordance with Rule 17f-3 under
the 1940 Act.
E. Payment for Shares
The Custodian will receive from the distributor of a Fund's Shares or from
the transfer agent and deposit into the Fund's custody account payments received
for Shares issued or sold from time to time by the Fund. The Custodian will
provide timely notification to the Fund and the Transfer Agent of any receipt by
it of cash payments for Shares.
F. Collection of Income and Other Payments
The Custodian will collect on a timely basis all income and other payments
with respect to securities held hereunder to which the Fund will be entitled by
law or pursuant to custom in the securities business, and will credit such
income and other payments, as collected, to the Fund's custody account.
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G. Payment of Fund Moneys
Upon receipt of proper instructions, which may be continuing instructions,
the Custodian will pay out moneys on behalf of the Fund in the following cases
only:
1. Upon the purchase of securities for the account of a Fund, but only (a)
against the delivery of such securities to the Custodian (or any bank, banking
firm or trust company doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and has been designated by
the Fund or by the Custodian as its agent for this purpose); (b) in the case of
a purchase effected through a Securities System, in accordance with the
conditions set forth in Section J hereof or; (c) in the case of repurchase
agreements entered into between the Fund and the Custodian, or another bank, (i)
against delivery of securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank with such
securities and with an indication on the books of the Custodian that such
securities are held for the benefit of the Fund, and (ii) against delivery of
the receipt evidencing purchase by the Fund of securities owned by the Custodian
or other bank along with written evidence of the agreement by the Custodian or
other bank to repurchase such securities from the Fund;
2. In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section B hereof;
3. For the redemption or repurchase of Shares as set forth in Section H
hereof;
4. For the payment of any expense or liability incurred by the Fund,
including, but not limited to, the following payments for the account of the
Fund: interest, dividend disbursements, taxes, trade association dues, advisory,
administration, accounting, transfer agent and legal fees, and operating
expenses allocated to the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5. For the payment of any dividend declared pursuant to the governing
documents of the Fund; and
6. For any other proper corporate purposes, but only upon receipt of, in
addition to proper instructions, a certified copy of a resolution of the Board
signed by an officer of the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made.
H. Payments for Repurchase or Redemptions of Shares of the Fund
From such funds as may be available, the Custodian will, upon receipt of
instructions from the transfer agent, make funds available for payment to
holders of Shares who have
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delivered to the transfer agent a request for redemption or repurchase of their
Shares. In connection with the redemption or repurchase of Shares, the
Custodian is authorized upon receipt of instructions from the transfer agent to
wire funds to a member of the Federal Reserve designated by the redeeming
shareholders.
I. Appointment of Agents
The Custodian may at any time in its discretion appoint, but only in
accordance with an applicable vote by the Board, any bank or trust company,
which is qualified under the 1940 Act to act as a custodian, as its agent or
sub-custodian to carry out such of the provisions of this Section 3 as the
Custodian may from time to time direct; provided that the appointment of any
such agent or sub-custodian will not relieve the Custodian of any of its
responsibilities or liabilities hereunder. The Custodian is hereby authorized
to deposit, arrange for deposit and/or maintain foreign securities owned by the
Fund on behalf of the Funds with the Custodian or with the subcustodians or
agents of the Custodian's agent.
J. Deposit of Fund Assets in Securities Systems
The Custodian may deposit and/or maintain securities owned by the Funds in
a clearing agency registered with the Securities and Exchange Commission (the
"SEC") under Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies (collectively referred
to herein as a "Securities System") in accordance with applicable Federal
Reserve Board and SEC rules and regulations, if any, and subject to the
following provisions:
1. The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account ("Account") of the
Custodian in the Securities System which will not include any assets of the
Custodian other than assets held as a fiduciary, custodian, or otherwise for
customers;
2. The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System will identify by book-entry those
securities belonging to the Fund;
3. The Custodian will pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such securities
have been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the account of
the Fund. The Custodian will transfer securities sold for the account of the
Fund upon (i) receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment for the
account of the Fund. The Custodian will furnish the Fund a monthly account
statement showing confirmation of each transfer to or
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from the account of the Fund and each day's transactions in the Securities
System for the account of the Fund;
4. The book-entry system of the Federal Reserve System authorized by the
U.S. Department of the Treasury and the Depository Trust Company, a clearing
agency registered with the SEC, each are hereby specifically approved as a
Securities System, provided that any changes in these arrangements shall be
subject to the approval of the Board; and
5. The Custodian will be liable to a Fund for any direct loss or damage to
a Fund resulting from use of the Securities System to the extent caused by the
gross negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees. In no event will the Custodian be
liable for any indirect, special, consequential or punitive damages.
K. Segregated Accounts for Futures Commission Merchants
The Custodian may enter into separate custodial agreements with various
Futures Commission Merchants ("FCMs") which the Fund uses (each an "FCM
agreement"), pursuant to which the Fund's margin deposits in certain
transactions involving futures contracts and options on futures contracts will
be held by the Custodian in accounts (each an "FCM account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between FCM and the Fund ("FCM contract"), SEC rules governing
such segregated accounts, Commodities Futures Trading Commission ("CFTC") rules
and the rules of applicable securities or commodities exchanges. Such custodial
agreements will only be entered into upon receipt of written instructions from
the Fund which state that (a) an agreement between the FCM and the Fund has been
entered into, and (b) the Fund is in compliance with all the rules and
regulations of the CFTC. Transfers of initial margin will be made into an FCM
account only upon written instructions; transfers of premium and variation
margin may be made into an FCM account pursuant to oral instructions. Transfers
of funds from an FCM account to the FCM for which the Custodian holds such an
account may only occur upon certification by the FCM to the Custodian that
pursuant to the FCM agreement and the FCM contract, all conditions precedent to
its right to give the Custodian such instructions have been satisfied.
L. Ownership Certificates for Tax Purposes
The Custodian will execute ownership and other certificates and affidavits
for all federal and state tax purposes in connection with receipt of income or
other payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
M. Proxies
The Custodian will cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in the name
of the Fund or a nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and
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will promptly deliver to the Fund's investment advisor such proxies, all proxy
soliciting materials and all notices relating to such securities.
N. Communications Relating to Fund Securities
The Custodian will transmit promptly to the investment advisor all written
information (including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith) received by the
Custodian from issuers of the securities being held for the Fund. With respect
to tender or exchange offers, the Custodian will transmit promptly to the
investment advisor all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and from the party
(or its agents) making the tender or exchange offer. If the investment advisor
desires to take action with respect to any tender offer, exchange offer or any
other similar transaction, the investment advisor will notify the Custodian at
least five business days prior to the date on which the Custodian is to take
such action.
O. Actions Permitted Without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
1. Make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Agreement,
provided that all such payments will be accounted for to the Fund;
2. Surrender securities in temporary form for securities in definitive
form;
3. Endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4. In general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund, except as otherwise directed by the Fund or
the Board.
ARTICLE 8. DUTIES OF CUSTODIAN WITH RESPECT TO BOOKS OF ACCOUNT.
The Custodian will cooperate with and supply to the entity or entities
appointed to keep the books of account of the Fund such information in the
possession of the Custodian as is reasonably necessary to the maintenance of the
books of account of the Fund.
ARTICLE 9. RECORDS.
The Custodian will create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the 1940 Act, including, without limitation,
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records will
be property of the Fund and will at all times during the regular business hours
14
of the Custodian be open for inspection by duly authorized officers, employees
or agents of the Fund and employees and agents of the SEC. The Custodian will,
upon request, provide the Fund with a tabulation of securities held by the
Custodian on behalf of the Fund, and will, upon request, and for such
compensation as will be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.
ARTICLE 10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT.
The Custodian will provide reasonable assistance, as the Fund may from time
to time request, in obtaining from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-1A, Form N-SAR or other
annual or semiannual reports to the SEC and with respect to any other
requirements of the SEC.
ARTICLE 11. SUCCESSOR CUSTODIAN.
If the Board appoints a successor custodian, the Custodian will, upon
termination, deliver to such successor custodian at the office of the Custodian,
duly endorsed and in the form for transfer, all securities and other assets of
the Fund then held by it hereunder. The Custodian will also deliver to such
successor custodian copies of such books and records relating to the Fund as the
Fund and Custodian may mutually agree.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board will have been delivered to the Custodian
on or before the date when such termination will become effective, then the
Custodian will have the right to deliver to a bank or trust company of its own
selection, doing business in the state in which either the principal place of
business of the Fund or the Custodian is located and having an aggregate
capital, surplus, and undivided profits of not less than $25,000,000, all
securities, funds and other properties held by the Custodian under this
Agreement. Thereafter, such bank or trust company will be the successor of the
Custodian under this Agreement. In the event that securities, funds and other
properties remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to procure the certified copy of
vote referred to, or of the Board to appoint a successor custodian, the
Custodian will be entitled to fair compensation for its services during such
period as the Custodian and retain possession of such securities, funds and
other properties and the provisions of this Agreement relating to the duties and
obligations of the Custodian will remain in full force and effect.
SECTION FOUR: COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Investment Company and/or Funds will compensate the Company in
accordance with Exhibit 2 hereto.
15
B. In addition to the compensation paid under Section A above, the
Investment Company and/or Funds agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed upon between
the parties, as may be added to or amended from time to time. In addition, any
other expenses incurred by the Company at the request or with the consent of the
Investment Company and/or the Funds, will be reimbursed by the appropriate Fund.
C. The Investment Company and/or Funds, and not the Company, shall bear
the cost of: membership dues in the Investment Company Institute or any similar
organization; transfer agency expenses; investment advisory expenses; costs of
printing and mailing Prospectuses, reports and notices; administrative expenses;
interest on borrowed money; brokerage commissions; taxes and fees payable to
federal, state and other governmental agencies; fees of Trustees or Directors of
the Investment Company; independent auditors expenses; legal and audit expenses
billed to the Company for work performed related to the Investment Company, the
Funds, or the Classes; law firm expenses; organizational expenses; or other
expenses relating to the Investment Company or the Funds not specified in this
Agreement as being the responsibility of the Company.
D. The compensation and out-of-pocket expenses attributable to the Fund
shall be accrued by the Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the Company. The Company
will maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
E. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized officer of the
Investment Company and/or the Funds and a duly authorized officer of the
Company.
The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be prorated
according to the proportion that such period bears to the full month period.
Upon any termination of this Agreement before the end of any month, the fee for
such period shall be prorated according to the proportion which such period
bears to the full month period. For purposes of determining fees payable to the
Company, the value of the Fund's net assets shall be computed at the time and in
the manner specified in the Fund's Prospectus.
SECTION FIVE: GENERAL PROVISIONS.
ARTICLE 12. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give such
instructions with respect to the transaction involved, and (b) the Investment
Company, or the
16
Fund, and the Company promptly cause such oral instructions to be confirmed in
writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Investment
Company, or the Fund, and the Company are satisfied that such procedures afford
adequate safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
ARTICLE 13. EVIDENCE OF AUTHORITY.
The Company will be protected in acting upon any instruction, notice,
request, consent, certificate or other instrument or paper reasonably believed
by it to be genuine and to have been properly executed by or on behalf of a
Fund. The Company may receive and accept a certified copy of a vote of the
Board of the Fund as conclusive evidence (a) of the authority of any person to
act in accordance with such vote, or (b) of any determination or of any action
by the Board as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Company of written notice to the
contrary.
ARTICLE 14. ASSIGNMENT.
Except as provided below or elsewhere in this Agreement, neither this
Agreement nor any of the rights or obligations under this Agreement may be
assigned by either party without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With respect to Transfer Agency Services, the Company may without
further consent on the part of the Investment Company subcontract for the
performance of Transfer Agency Services with such other provider of services
duly registered as a transfer agent under Section 17A(c)(1) or as the Company
shall select. The Company shall be as fully responsible to the Investment
Company for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
C. With regard to Fund Accounting Services, the Company may without
further consent on the part of the Investment Company subcontract for the
performance of such services with any affiliate of the Company. The Company
shall be as fully responsible to the Investment Company for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with an Agent
selected by the Investment Company, other than as described in B. and C. above;
provided, however, that the Company shall in no way be responsible to the
Investment Company for the acts and omissions of the Agent.
17
ARTICLE 15. DOCUMENTS.
A. In connection with the appointment of the Company under this
Agreement, the Investment Company shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Investment Company and
all amendments thereto;
(2) A copy of the resolution of the Board of the Investment Company
authorizing this Agreement;
(3) All account application forms and other documents relating to
Shareholders accounts; and
(4) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following documents:
(1) Each resolution of the Board of the Investment Company authorizing
the original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the sale of
Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Investment Company;
(4) Certified copies of each vote of the Board authorizing officers to
give Proper Instructions to the Custodian and agents for fund accounting,
custody services, and shareholder recordkeeping or transfer agency
services;
(5) Such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the proper
performance of its duties; and
(6) Revisions to the Prospectus of each Fund.
ARTICLE 16. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
(1) It is a savings bank existing and in good standing under the laws
of the United States;
18
(2) It is duly qualified to carry on its business in each jurisdiction
where the nature of its business requires such qualification;
(3) It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(4) All requisite corporate proceedings have been taken to authorize
it to enter into and perform its obligations under this Agreement;
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement; and
(6) It is in material compliance with federal securities law
requirements as is necessary for the Company to conduct its business.
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this Agreement;
(3) All corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform its obligations
under this Agreement;
(4) The Investment Company is an open-end investment company
registered under the 1940 Act; and
(5) A registration statement under the 1933 Act will be effective, and
appropriate state securities law filings have been made and will continue
to be made, with respect to all Shares of each Fund being offered for sale.
ARTICLE 17. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Two and Three, the Company shall be held to a
standard of reasonable care in carrying out the provisions of this Contract. The
Company shall be entitled to rely on and may act upon advice of counsel for the
Investment Company, Administrator, Adviser, Sub-adviser, or other party
contracted by or approved by the Investment Company or Fund, on all matters, and
shall be without liability for any action reasonably taken or omitted
19
pursuant to such advice, provided that such action is not in violation of
applicable federal or state laws or regulations, and is in good faith.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment Company and/or
Fund shall indemnify and hold the Company, including its officers, directors,
shareholders and their agents, employees and affiliates, harmless against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any Administrator, Adviser, Sub-adviser,
or other party contracted by or approved by the Investment Company or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, its Shareholders or
investors regarding the purchase, redemption or transfer of Shares and
Shareholder account information;
(b) are received by the Company from independent pricing services
or sources for use in valuing the assets of the Funds; or
(c) are received by the Company or its agents or subcontractors
from Administrators, Advisers, Sub-advisers or other third parties
contracted by or approved by the Investment Company of Fund for use in
the performance of services under this Agreement;
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the Investment
Company.
(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the Investment Company or the
Fund.
(4) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in
such state.
Provided, however, that the Company shall not be protected by this Article
17 from liability for any act or omission resulting from the Company's willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
failure to meet the standard of care set forth above in this Article 17.
20
C. Reliance
At any time the Company may apply to any officer of the Investment Company
or Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Company
under this Agreement, and the Company and its agents or subcontractors shall not
be liable and shall be indemnified by the Investment Company or the appropriate
Fund for any action reasonably taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel provided such action is not in
violation of applicable federal or state laws or regulations.
D. Notification
In order that the indemnification provisions contained in this Article 17
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
ARTICLE 18. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from on the first date set forth above
and shall continue until August 31, 2000 ("Term"). Thereafter, the Agreement
will continue for successive twelve month terms, unless terminated by either
party upon two months notice. In the event, however, of willful misfeasance,
bad faith, negligence or reckless disregard of its duties by the Company, the
Investment Company has the right to terminate the Agreement upon 60 days written
notice, if Company has not cured such willful misfeasance, bad faith, negligence
or reckless disregard of its duties within 60 days. The termination date for
all original or after-added Investment companies which are, or become, a party
to this Agreement shall be coterminous. Investment Companies that merge or
dissolve during the Term, shall cease to be a party on the effective date of
such merger or dissolution.
Should the Investment Company exercise its rights to terminate, all
out-of-pocket expenses associated with the movement of records and materials
will be borne by the Investment Company or the appropriate Fund. Additionally,
the Company reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Article 18 shall survive
the termination of this Agreement.
ARTICLE 19. AMENDMENT.
This Agreement may be amended or modified by a written agreement executed
by both parties.
21
ARTICLE 20. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Charter. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
ARTICLE 21. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware.
ARTICLE 22. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Investment Company at Xxx
Xxxx Xxxxxxx, Xxxxx Xxxxx, Xxxx, Xxxxxx 00000, or to the Company at 0000
Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, or to such other address as the Investment
Company or the Company may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.
ARTICLE 23. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 24. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
ARTICLE 25. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by the
Investment Company, the Company shall upon termination of this Agreement deliver
to such successor agent at the office of the Company all properties of the
Investment Company held by it hereunder. If no such successor agent shall be
appointed, the Company shall at its office upon receipt of Proper Instructions
deliver such properties in accordance with such instructions.
22
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to the Company on or before the date when
such termination shall become effective, then the Company shall have the right
to deliver to a bank or trust company, which is a "bank" as defined in the 1940
Act, of its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than $25,000,000,
all properties held by the Company under this Agreement. Thereafter, such bank
or trust company shall be the successor of the Company under this Agreement.
ARTICLE 26. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Fund as a result of work stoppage, power
or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
ARTICLE 27. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign all of
or a substantial portion of its business to a successor, or to a party
controlling, controlled by, or under common control with such party. Nothing in
this Article 27 shall prevent the Company from delegating its responsibilities
to another entity to the extent provided herein.
ARTICLE 28. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 29. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Investment Company and signed by an authorized officer of the
Investment Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any of
the Trustees or Shareholders of the Investment Company, but bind only the
property of the Fund, or Class, as provided in the Declaration of Trust.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
By
-----------------------------
Title
---------------------------
RUSHMORE TRUST AND SAVINGS, FSB
By:
-----------------------------
Title
---------------------------
24
EXHIBIT 1
THE AMERICAN TIGER FUND
American Tiger Top Twenty Portfolio
25
EXHIBIT 2
THE AMERICAN TIGER FUND
FEE SCHEDULE
BASE CHARGE
10.0 basis points on the first $200 million of average daily net assets
7.5 basis points on the next $200 million of average daily net assets
5.0 basis points after $400 million of average daily net assets
(Asset balance in Fund for Government Investors is not considered in the
base charge calculation.)
TRANSFER AGENCY SERVICES
Monthly Account Maintenance $1.00 per account
Transaction Charge $1.00 per transaction
12b-1 Calculation $0.25 per account, per cycle
MINIMUM MONTHLY CHARGE $2,500.00 EACH IF 1 - 3 PORTFOLIOS OR;
$2,000.00 EACH IF 4 - 6 PORTFOLIOS OR;
$1,500.00 EACH IF 7 - 9 PORTFOLIOS
CUSTODY SERVICES
Portfolio Transaction Charge $12.00 per transaction
MINIMUM MONTHLY CHARGE $1,500.00 EACH IF 1 - 3 PORTFOLIOS OR;
$1,000.00 EACH IF 4 - 6 PORTFOLIOS OR;
$ 500.00 EACH IF 7 - 9 PORTFOLIOS
The above transaction charge is applied to any discretionary security
transaction such as a buy, sell, tender, conversion, maturity, free
receipt/delivery, and in-kind distribution. The charge does not apply to
dividend and interest payments or to cash transactions in Fund for
Government Investors. Mortgage-backed securities, foreign transactions,
futures or options transactions are priced separately.
FUND ACCOUNTING SERVICES
Monthly Charge $1,500.00
26
THE AMERICAN TIGER FUND
FEE SCHEDULE (Continued)
The above fees shall be accrued by the Funds and shall be paid to the
Company no less frequently than monthly. However, during the first three
months beginning on the date the Fund goes "effective", the minimum monthly
charges set forth above will be waived (i.e., only actual fees will be
charged) and during the next three months the minimum monthly charges for
each Fund will total $2,000/month.
27
