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EXHIBIT 8
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CUSTODY AGREEMENT
BETWEEN
SENTRY FUND, INC.
AND
CITIBANK, N.A.
AGREEMENT dated as of May 1, 1989 between Citibank, N.A., a national
banking association, having an office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(the "Bank"), and Sentry Fund, Inc., a corporation organized under the laws of
the State of Maryland, having an office at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxx (the "Company").
WITNESSETH:
THAT WHEREAS, the Board of Directors of the Company has duly adopted
resolutions which, in part, authorize the Company to open and maintain a
custody account (the "Custody Account") with the Bank to hold certain property
("Property") including but not limited to stock, bonds, or other securities
("Securities"), funds and other property owned or held by the Company, other
than gold and silver coins, and authorize the Company's entry into this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the agreements
hereinafter set forth, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE.
The Company hereby appoints the Bank as custodial of the Property, and
the Bank agrees to act as such upon the terms and conditions hereinafter
provided.
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2. DELIVERY; SAFEKEEPING.
The Company has heretofore delivered or will deliver Property to the
Bank, and will deliver or cause to be delivered to the Bank Property hereafter
acquired, which Property the Bank agrees to keep safely as custodian for the
Company. The Bank shall not surrender possession of Property except upon
properly authorized instructions of the Company.
3. IDENTIFICATION AND SEGREGATION OF ASSETS.
With respect to Property in the Custody Account:
(a) The Bank will segregate and identify on its books as belonging to
the Company all Property held by the Bank or any other entity authorized to
hold Property in accordance with Section 6 hereof.
(b) The Bank will supply to the Company from time to time as mutually
agreed upon a written statement with respect to all of the Company's Property
in the Custody Account. The Bank will send to the Company an advice or
notification of any transfers of Property to or from the Custody Account. In
the absence of the Company's filing in writing with the Bank of exceptions or
objections to any such statement within sixty (60) days, the Company shall be
deemed to have approved such statement.
4. STANDARD OF CARE.
The Bank will exercise the due care expected of a professional
custodian for hire with respect to the Securities and other property in its
possession and control. Specifically, the Bank will be liable to
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the Company for any loss of Securities and other Property in the Custody
Account resulting from robbery, theft or burglary, while such Securities and
other Property are in the Bank's possession and control. In addition, the Bank
will be liable to the Company for losses of Securities or other Property in the
Custody Account which result from the Bank's negligence or willful misconduct
or the negligence or willful misconduct of the Bank. The Bank shall have the
burden of proving that it exercised such care in the event of any loss of
Securities and other Property. Under no circumstances, however, will the Bank
incur liability for any loss of Securities or other Property in the Custody
Account resulting from war, insurrection, hurricane, tornado, earthquake,
nuclear fission, fusion or radioactivity.
The Bank is not under any duty to supervise the investments of the
Company, or to advise or make any recommendation to the Company with respect to
the purchase or sale of any of the Securities or the investment of any funds.
5. PERFORMANCE BY THE BANK.
(a) Receipt, Delivery and Disposal of Securities. The Bank shall, or
shall instruct any other entity authorized to hold Property in accordance with
Section 6 hereof to, receive or deliver Securities and credit or debit the
Company's account, in accordance with properly authorized instructions from the
Company. The Bank or such entity shall also receive in custody all stock
dividends, rights and similar
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securities issued in connection with Securities held hereunder, shall surrender
for payment, in a timely manner, all items maturing or called for redemption
and shall take such other action as the Company may direct in properly
authorized instructions.
(b) Trade Execution. The Company may from time to time place orders
with the Bank to buy or sell Securities. The Bank and any entity authorized to
hold Property in accordance with Section 6 hereof may refer each such order to
any broker or sub-agent of its choice, unless otherwise specified, and shall
have no liability or responsibility whatsoever for any error, neglect or
default of any such broker or sub-agent (in the absence of negligence or
willful misconduct by the Bank in the selection of such broker or sub-agent) or
for mutilations, interruptions, omissions, errors or delays occurring in the
mails, or on the part of any telegraph, cable or wireless company, or any
employee of such company, or by reason of any cause beyond its control. In
placing such orders, the Company may from time to time place special orders
with the Bank which will, as agent, undertake the purchase or sale of the
Securities as set out above; provided that if the order is for the purchase or
sale of obligations of the United States Government or its agencies, or state
or municipal bonds, the Bank may act as principal. The Company hereby agrees,
with respect to all purchases, that funds for settlement will be on deposit by
the settlement date. Further, the Company agrees to provide specific
instructions regarding the deposit or delivery of all such Securities to the
Custody Account.
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(c) Registration. Securities held hereunder may be registered in the
name of the Bank, any entity authorized to hold Property in accordance with
Section 6 hereof, or a nominee of the Bank or any such authorized entity, and
the Company shall be informed upon request of all such registrations. The
Securities in registered form will be transferred upon request of the Company
into such names or registrations as it may specify in properly authorized
instructions.
(d) Cash Accounts. All cash received or held by the Bank as interest,
dividends, proceeds from transfer, and other payments for or with respect to
the Securities shall be (i) converted and remitted to the Company at the
Company's risk; (ii) held in a cash account in accordance with properly
authorized instructions received by the Bank; or (iii) if at any future time
made available by the Bank to its customers, held in a cash account and
transferred at the close of each business day to one or more demand accounts
designated by the Company and maintained at the Bank.
(e) Reports, Records, Affidavits and Access. If the Bank has in place
a system for providing telecommunication access or other means of direct access
by customers to the Bank's reporting system for Property in the Custody
Account, then, at the Company's election, the Bank shall provide the Company
with such instructions and passwords as may be necessary in order for the
Company to have such direct access through the Company's terminal device. Such
direct access shall be restricted
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to information relating to the Custody Account. Where direct access to such
terminal system is requested by the Company, the Company agrees to assume full
responsibility for the consequences of the use, including any misuse or
unauthorized use of the terminal device, instructions or passwords referred to
above and agrees to defend and indemnify the Bank and hold the Bank harmless
from and against any and all liabilities, losses, damages, costs, counsel fees,
and other expenses of every nature suffered or incurred by the Bank by reason
of or in connection with such use by the Company or others of such terminal
device, unless such liabilities, losses, damages, costs, counsel fees and other
expenses can be shown to be the result of negligent or wrongful acts of the
Bank, the Bank's employees or the Bank's agents. Further, where the Company
elects to have direct access, the Bank shall provide the Company on each
business day a report of the preceding business day's transactions relating to
such accounts and of the closing or net balances of each business day. If the
Company should not choose to have direct access, the Bank shall provide the
Company with such reports of transactions in the Custody Account by such means
as may be mutually agreed upon.
In the event that the Company is required to complete any annual
report of the Securities and Exchange Commission, the Bank agrees to maintain
records sufficient to verify such information and to furnish the Company, at no
charge, with such affidavits as may be required in connection therewith.
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During the Bank's regular banking hours, upon receipt of reasonable
notice from the Company, any officer or employee of the Company, any
independent accountant(s) selected by the Company and any person designated by
any regulatory authority having jurisdiction over the Company shall be entitled
to examine on the Bank's premises, Property held by the Bank on its premises
and the Bank's records regarding Property held hereunder deposited with
entities authorized to hold Property in accordance with Section 6 hereof, but
only upon the Company's furnishing the Bank with properly authorized
instructions to that effect, provided, such examination shall be consistent
with the Bank's obligations of confidentiality to other parties. The Bank's
costs and expenses in facilitating such examinations and providing reasonably
requested related reports and documents including, but not limited to, the cost
of the Bank of providing personnel in connection with examinations shall be
borne by the persons or agencies making such examinations or receiving such
reports or documents, provided that such costs and expenses shall not be deemed
to include the Bank's costs in providing to the Company; (i) the so-called
"single audit report" of the independent certified public accountants engaged
by the Bank; and (ii) such reports and documents as this Agreement contemplates
that the Bank shall furnish routinely to the Company.
The Bank shall also, subject to restrictions under applicable law,
seek to obtain from any entity with which the Bank maintains the physical
possession of any of the Property in the Custody Account such
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records of such entity relating to the Custody Account as may be required by
the Company or its agents in connection with an internal examination by the
Company of its own affairs. Upon a reasonable request from the Company, the
Bank shall use its best efforts to furnish to the Company such reports (or
portions thereof) of the external auditors of each such entity as relate
directly to such entity's system of internal accounting controls applicable to
its duties under its agreement with the Bank.
The Bank shall supply to the Company from time to time, written
operational procedures which shall govern the day-to-day operations of the
account. Such operating procedures are hereby incorporated herein by
reference.
(f) Voting and Other Action. The Bank will promptly transmit, and
will instruct any entities authorized to hold Property in accordance with
Section 6 hereof to transmit, to the Company all financial reports, stockholder
communications and notices issued by companies whose Securities are retained in
the Custody Account and information relating to exchange or tender offers, from
offerors, and all notices, proxies and proxy soliciting materials with respect
to the Securities in the Custody Account. Such proxies will be executed by the
registered holder if the registered holder is other than the Company, but the
manner in which the Securities are to be voted will not be indicated. Specific
instructions regarding proxies will be provided when necessary. Neither
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the Bank nor any such entity shall vote any of the Securities or authorize the
voting of any Securities or give any consent or take any other action with
respect thereto, except as otherwise provided herein, unless ordered to do so
by the Company.
In the event of tender offers, the Company shall mail instructions to
the Bank as to the action to be taken with respect thereto or telephone such
instructions to its Citibank account administrator at the Bank, designating
such instructions as being related to a tender offer. The Company shall
deliver to the Bank by 5:00 p.m., New York time on the following calendar day,
written confirmation, including telefax, of telephonic instructions provided
such telefax must be on the Company's letterhead, signed by an authorized
person and receipt by the Bank confirmed promptly. The Company shall hold the
Bank harmless from any adverse consequences of the Company's use of any other
method of transmitting instructions relating to a tender offer.
The Company agrees that if it gives an instruction for the performance
of an act on the last permissible date of a period established by the tender
offer or for the performance of such act or that if it fails to provide next
day written confirmation of any oral instruction, the Company shall hold the
Bank harmless from any adverse consequences of failing to follow said
instructions.
The Bank is authorized to accept and open in the Company's behalf all
mail or communications received by it or directed in its care.
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(g) Requirements of S.E.C. The Bank agrees to comply with all
applicable requirements to which it is subject under the U.S. federal
securities laws and the regulations of the Securities and Exchange Commission
as they apply from time to time to custodians of funds and securities of
registered investment companies.
6. AUTHORIZED USE OF U.S. DEPOSITORIES.
(a) The Company authorizes the Bank, for any Securities held
hereunder, to use the services of any United States central securities
depository permitted to perform such services for registered investment
companies and their custodians under Rule 17f-4 under the Act ("U.S.
Depository" or "U.S. Depositories") including, but not limited to, the
Depository Trust Company and the Federal Reserve Book Entry System.
(b) The Bank will deposit Securities with a U.S. Depository only in an
account which includes exclusively the assets held by the Bank for its
customers, and the Bank will cause such account to be designated by such U.S.
Depository as a special custody account for the exclusive benefit of customers
of the Bank.
7. AUTHORIZATIONS.
The Bank is authorized to rely and act upon written, signed
instructions of those persons as named in a list provided to the Bank from time
to time by any two of the Company's officers, listing separately those persons
who may authorize the withdrawal of the Securities free of payment, which list
will be certified and furnished to the Bank by the Company's secretary. The
Company will provide the Bank with authenticated specimen signatures of the
persons so authorized.
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The Bank is further authorized to rely upon any instructions received
by any other means and identified as having been given or authorized by any
person named to the Bank as authorized to give written instructions, regardless
of whether such instructions shall in fact have been authorized or given by any
of such persons, provided that the Bank and the Company shall have agreed upon
the means of transmission and the method of identification for such
instructions. Instructions received by any other means shall include verbal
instructions, provided that any verbal instructions shall be promptly confirmed
in writing. In the event any instructions, notices or other communication
under this Agreement are provided or confirmed via telefax, such telefax must
be on the Company's letterhead, signed by an authorized person and receipt by
the Bank confirmed promptly. In the event verbal instructions are not
subsequently confirmed in writing, as provided above, the Company agrees to
hold harmless and without liability for any claims or losses in connection with
such verbal instructions. Notwithstanding the above, instructions for the
withdrawal of securities "free of payment" shall be sent to you only in
writing, manually signed by any two such authorized persons.
The Company may appoint one or more investment managers ("Investment
Managers") with respect to the Custody Account. The Bank is authorized to act
upon instructions received from any Investment Manager to the same extent that
the Bank would act upon the instructions
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of persons named in the above-mentioned certificate or separate list, provided
that the Bank has received copies of the instruments appointing the Investment
Managers and written confirmation from the Investment Manager evidencing his
acceptance of such appointment.
If the Company should choose to have a telecommunication or other
means of direct access to the Bank's terminal system for Property in the
Custody Account, pursuant to paragraph (e) of Section 5, the Bank is also
authorized to rely and act upon any instructions received by it through a
terminal device, provided that such instructions are accompanied by code words
which the Bank has furnished to the Company, or its delegated personnel, by any
method mutually agreed to by the Bank and the Company, and which the Bank shall
not have then been notified by the Company or any such delegate to cease to
recognize, regardless of whether such instructions shall in fact have been
given or authorized by the Company or any such person. The Company's delegates
shall be named by a certificate provided to the Bank from time to time by the
Company's Secretary or an Assistant Secretary.
8. FEES AND EXPENSES.
Fees and expenses for the services rendered under this Agreement shall
be in accordance with the schedule accepted by the Company and shall be payable
as indicated in said schedule.
9. TAX STATUS.
The Company is a Maryland corporation having its principal place of
business in Wisconsin. Tax Identification Number: 00-0000000.
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10. TERMINATION.
Either party may terminate this Agreement upon sixty
(60) days written notice to the other.
11. CONFIDENTIALITY.
Subject to the foregoing provisions of this Agreement and subject to
any applicable law, the Company and the Bank shall each use best efforts to
maintain the confidentiality of matters concerning Property in the Custody
Account.
12. NOTICES AND MISCELLANEOUS.
All notices and other communications hereunder, except for
instructions and reports relating to the Property which are transmitted through
the Bank's terminal system for Property in the Custody Account, shall be in
writing, telex or telecopy or, if verbal, shall be promptly confirmed in
writing, and shall be hand-delivered, telexed, telecopied or mailed by prepaid
first-class mail (except that notice of termination, if mailed, shall be by
prepaid registered or certified mail) to each party at its address set forth
above, if to the Company, marked "Attention ____________________" and if to the
Bank, marked "Attention _______________________", or at such other address as
each party may give notice of to the other. This Agreement may not be amended
except by writing signed by the party against whom enforcement is sought. This
Agreement shall not be assignable by either party without the written consent
of the other. This Agreement may be executed in several
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counterparts, each of which shall be an original, but all of which shall
constitute one of the same instrument. This Agreement contains the entire
agreement between the Company and the Bank relating to custody of Property and
supersedes all prior agreements on this subject.
The captions of the various sections and subsections of this Agreement
have been inserted only for the purposes of convenience, and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
This Agreement shall be governed by and construed according to the
laws of the State of New York.
In witness whereof, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized.
CITIBANK, N.A.
Attest: [SIG] By: [SIG]
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Title: Vice President
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SENTRY FUND, INC.
Attest: /s/X. Xxxxxxxxxxx By: /s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Title: Chairman of the
Board and President
