EXHIBIT (g)
CUSTODY AGREEMENT
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Agreement made as of the 6th day of MARCH, 1992, between FRONTIER FUNDS,
INC., (the "CORPORATION"), a corporation organized under the laws OF THE STATE
OF MARYLAND and having its office at 000 XXXX XXXXXXXXX XXXXXX, XXXXXXXX, XX
00000 acting for and on behalf of THE EQUITY FUND (the "Fund"), which is
operated and maintained by the Trust for the benefit of the holders of shares of
the Fund, and Star Bank, N.A. (the "Custodian"), a national banking association
having its principal office and place of business at Star Bank Center, 000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, which Agreement provides for the
furnishing of custodian services to the Fund.
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth
the Trust, on behalf of the Fund, and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
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Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the Chairman, President,
Secretary, Treasurer, Controller, and the Senior Vice President, or any other
person, whether or not any such person is an officer or employee of the Trust,
duly authorized by the Board of Directors of the Trust to give Oral Instructions
and Written Instructions on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time, subject in each case to any limitations on the
authority of such person as set forth in Appendix A or any such Certificate.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees, provided the Custodian has received a
certified copy of a resolution of Board of Directors of the Corporation
specifically approving deposits in the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the Custodian
which is signed on behalf of the Fund by an officer of the Trust and is actually
received by the Custodian.
4. "Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its successor or
successors and its nominee or nominees. The term "Depository" shall further mean
and include any other person or clearing agency authorized to act as a
depository under the Investment Company Act of 1940, its successor or successors
and its nominee or nominees, provided that the Custodian has received a
certified copy of a resolution of the Board of Directors of the Trust
specifically approving such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer agent
active, from time to time, in such capacity pursuant to a written agreement with
the Fund, changes in which the Trust shall immediately report to the Custodian
in writing.
6. "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to principal and/or interest by the
government of the United States or agencies or instrumentalities thereof,
commercial paper, obligations (including certificates of deposit, bankers'
acceptances, repurchase and reverse repurchase agreements with respect to the
same) and bank time deposits of domestic banks that are members of Federal
Deposit Insurance Corporation, and short-term corporate obligations where the
purchase and sale of such securities normally require settlement in federal
funds or their equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the Chairman, the President, the
Secretary, the Treasurer, the Controller, and Senior Vice President of the
Corporation listed in the Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions actually received by
the Custodian from an Authorized Person (or from a person which the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions from Authorized Persons in such manner so that such Written
Instructions are received by the Custodian on the next business day.
9. "Prospectus" shall mean the Fund's currently effective prospectus and
statement of additional information, as filed with and declared effective by the
Securities and Exchange Commission.
10. "Security or Securities" shall mean Money Market Securities, common or
preferred stocks, options, bonds, debentures, corporate debt securities, notes,
mortgages or other obligations, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interest therein, or any
property or assets.
11. "Written Instructions" shall mean communication actually received by
the Custodian from one Authorized Person or from one person which the Custodian
reasonably believes in good faith to be an Authorized Person in writing or by
telex or any other such system whereby the receiver of such communication is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the senders of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
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1. The Corporation, acting for and on behalf of the Fund, hereby
constitutes and appoints the Custodian as custodian of all the Securities and
monies at any time owned by the Fund during the period of this Agreement (the
"Fund Assets").
2. The Custodian hereby accepts appointment as such Custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE CORPORATION
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The Trust hereby agrees to furnish to the Custodian the following
documents:
1. A copy of its Articles of Incorporation (the "Declaration of
Corporation") certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. A copy of the resolution of its Board of Directors appointing the
Custodian certified by its Secretary.
4. A copy of the most recent Prospectus of the Corporation.
5. A Certificate of the President and Secretary setting forth the names and
signatures of the present officers of the Corporation.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
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1. The Corporation will deliver or cause to be delivered to the Custodian
all Fund Assets, including cash received for the issuance of its shares, at any
time during the period of this Agreement. The Custodian will not be responsible
for such Fund Assets until actually received by it. Upon such receipt, the
Custodian shall hold in safekeeping and physically segregate at all times from
the property of any other persons, firms or corporations all Fund Assets
received by it from or for the account of the Fund. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where such credits
have been previously made and monies are not finally collected within 90 days of
the making of such credits. The Custodian is hereby authorized by the
Corporation, acting on behalf of the Fund, to actually deposit any Fund Assets
in the Book-Entry System or in a Depository, provided, however, that the
Custodian shall always be accountable to the Corporation for the Fund Assets so
deposited. Fund Assets deposited in the Book-Entry System or the Depository will
be represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
2. The Custodian shall credit to a separate account or accounts in the name
of the Fund all monies received by it for the account of the Fund, and shall
disburse the same only:
(a) In payment for Securities purchased for the account of the Fund,
as provided in Article V;
(b) In payment of dividends or distributions, as provided in Article
VI hereof;
(c) In payment of original issue or other taxes, as provided in
Article VII hereof;
(d) In payment for shares of the Fund redeemed by it, as provided in
Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting forth
the name and address of the person to whom the payment is to be made, the amount
of such payment and the purpose for which payment is to be made (the Custodian
not being required to question such direction) or (ii) if reserve requirements
are established for the Fund by law or by valid regulation, directing the
Custodian to deposit a specified amount of collected funds in the form of U.S.
dollars at a specified Federal Reserve Bank and stating the purpose of such
deposit; or
(f) In reimbursement of the expenses and liabilities of the Custodian,
as provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the fund is open and
valuing its portfolio. The Custodian shall furnish the Corporation with a
detailed statement of monies held for the Fund under this Agreement and with
confirmations and a summary of all transfers to or from the account of the Fund
during said day. Where Securities are transferred to the account of the Fund
without physical delivery, the Custodian shall also identify as belonging to the
Fund a quantity of Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the Custodian's account on
the books of the Book-Entry System or the Depository. At least monthly and from
time to time, the Custodian shall furnish the Corporation with a detailed
statement of the Securities held for the Fund under this Agreement.
4. All Securities held for the Fund, which are issued or issuable only in
bearer form, except such Securities as are held in the Book-Entry System, shall
be held by the Custodian in that form; all other Securities held for the Fund
may be registered in the name of the Fund, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to time
determine, or in the name of the Book-Entry System or the Depository or their
successor or successors, or their nominee or nominees. The Corporation agrees to
furnish to the Custodian appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or the Depository,
any Securities which it may hold for the account of the Fund and which may from
time to time be registered in the name of the Fund. The Custodian shall hold all
such Securities which are not held in the Book-Entry System by the Depository or
a Sub-Custodian in a separate account or accounts in the name of the Fund
segregated at all times from those of any other fund maintained and operated by
the Corporation and from those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate, the
Custodian shall with respect to all Securities held for the Fund in accordance
with this Agreement:
(a) Collect all income due or payable to the Fund with respect to the
Fund Assets;
(b) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Surrender Securities in temporary form for definitive Securities;
(d) Execute, as Custodian, any necessary declarations or certificates
of ownership under the Federal income tax laws or the laws or regulations of any
other taxing authority, including any foreign taxing authority, now or hereafter
in effect; and
(e) Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of the Fund all
rights and similar securities issued with respect to any Securities held by the
Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian directly
or through the use of the Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other instruments whereby
the authority of the Fund as owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any Securities held for the account of the Fund to any
protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund.
7. The Custodian shall promptly deliver to the Corporation all notices,
proxy material and executed but unvoted proxies pertaining to shareholder
meetings of Securities held by the Fund. The Custodian shall not vote or
authorize the voting of any Securities or give any consent, waiver or approval
with respect thereto unless so directed by a Certificate or Written Instruction.
8. The Custodian shall promptly deliver to the Corporation all material
received by the Custodian and pertaining to Securities held by the Fund with
respect to tender or exchange offers, calls for redemption or purchase,
expiration of rights, name changes, stock splits and stock dividends, or any
other activity involving ownership rights in such Securities.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
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1. Promptly after each purchase of Securities by the Fund, the Corporation
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate or Written Instructions,
and (ii) with respect to each purchase of Money Market Securities, Written
Instructions, a Certificate or Oral Instructions, specifying with respect to
each such purchase: (a) the name of the issuer and the title of the Securities,
(b) the principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase and (f) the name of the person from whom or the
broker through whom the purchase was made. The Custodian shall upon receipt of
Securities purchased by or for the Fund, pay out of the monies held for the
account of the Fund the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Certificate, Written Instructions
or Oral Instructions.
2. Promptly after each sale of Securities by the Corporation for the
account of the Fund, the Corporation shall deliver to the Custodian (i) with
respect to each sale of Securities which are not Money Market Securities, a
Certificate or Written Instructions, and (ii) with respect to each sale of Money
Market Securities, Written Instructions, a Certificate or Oral Instructions,
specifying with respect to each such sale: (a) the name of the issuer and the
title of the Security, (b) the principal amount sold, and accrued interest, if
any, (c) the date of sale, (d) the sale price per unit, (e) the total amount
payable to the Fund upon such sale and (f) the name of the broker through whom
or the person to whom the sale was made. The Custodian shall deliver the
Securities upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, Written Instructions or Oral Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
3. Promptly after the time as of which the Corporation, on behalf of the
Fund, either
(a) writes an option on Securities or writes a covered put option in
respect of a Security, or
(b) notifies the Custodian that its obligations in respect of any put
or call option, as described in the Trust's Prospectus, require that the Fund
deposit Securities or additional Securities with the Custodian, specifying the
type and value of Securities required to be so deposited, or
(c) notifies the Custodian that its obligations in respect of any
other Security, as described in the Fund's Prospectus, require that the Fund
deposit Securities or additional Securities with the Custodian, specifying the
type and value of Securities required to be so deposited, the Custodian will
cause to be segregated or identified as deposited, pursuant to the Fund's
obligations as set forth in the Prospectus, Securities of such kinds and having
such aggregate values as are required to meet the Fund's obligations in respect
thereof.
The Corporation or its properly appointed Transfer Agent/Fund Accountant
will provide to the Custodian, as of the end of each trading day, the market
value of the Fund's option liability and the market value of its portfolio of
common stocks.
4. On contractual settlement date, the account of the Fund will be charged
for all purchases settling on that day, regardless of whether or not delivery is
made. On contractual settlement date, sale proceeds will likewise be credited to
the account of the Fund irrespective of delivery.
In the case of "sale fails", the Custodian may request the assistance of
the Fund in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
-------------------------------------
1. The Corporation shall furnish to the Custodian a copy of the resolution
of the Board of Directors, certified by the Secretary, either (i) setting forth
the date of the declaration of any dividend or distribution in respect of shares
of the Fund, the date of payment thereof, the record date as of which Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date and the total amount to be
paid by the Dividend and Transfer Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions in respect of shares
of the Fund on a daily basis and authorizing the Custodian to rely on Written
Instructions or a Certificate setting forth the date of the declaration of any
such dividend or distribution, the date of payment thereof, the record date as
of which Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date and the total
amount to be paid by the Dividend and Transfer Agent on the payment date.
2. Upon the payment date specified in such resolution, Written Instructions
or Certificate, as the case may be, the Custodian shall arrange for such
payments to be made by the Dividend and Transfer Agent out of monies held for
the account of the Fund.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
-----------------------------------------
1. The Custodian shall receive and credit to the account of the Fund such
payments for shares of the Fund issued or sold from time to time as are received
from the distributor for the Fund's shares, from the Dividend and Transfer Agent
of the Fund, or from the Corporation.
2. Upon receipt of Written Instructions, the Custodian shall arrange for
payment of redemption proceeds to be made by the Dividend and Transfer Agent out
of the monies held for the account of the Fund in the total amount specified in
the Written Instructions.
3. Notwithstanding the above provisions regarding the redemption of any
shares of the Fund, whenever shares of the Fund are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the Fund,
the Custodian, unless otherwise subsequently instructed by Written Instructions
shall, upon receipt of any Written Instructions setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check redemption
privilege out of the money held in the account of the Fund for such purposes.
ARTICLE VIII
INDEBTEDNESS
------------
In connection with any borrowings, the Corporation, on behalf of the Fund,
will cause to be delivered to the Custodian by a bank or broker (including the
Custodian, if the borrowing is from the Custodian), requiring Securities as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank or broker setting forth the amount which such bank or
broker will loan to the Fund against delivery of a stated amount of collateral.
The Corporation shall promptly deliver to the Custodian a Certificate specifying
with respect to each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Corporation, acting
on behalf of the Fund, or other loan agreement, (c) the date and time, if known,
on which the loan is to be entered into, (d) the date on which the loan becomes
due and payable, (e) the total amount payable to the Fund on the borrowing date,
(f) the market value of Securities collateralizing the loan, including the name
of the issuer, the title and the number of shares or the principal amount of any
particular Securities and (g) a statement that such loan is in conformance with
the Investment Company Act of 1940 and the Fund's then current Prospectus. The
Custodian shall deliver on the borrowing date specified in a Certificate the
specified collateral and the executed promissory note, if any, against delivery
by the lending bank or broker of the total amount of the loan payable provided
that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank or broker,
keep such collateral in its possession, but such collateral shall be subject to
all rights therein given the lending bank or broker, by virtue of any promissory
note or loan agreement. The Custodian shall deliver in the manner directed by
the Corporation from time to time such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this paragraph. The Corporation shall cause all Securities released
from collateral status to be returned directly to the Custodian and the
Custodian shall receive from time to time such return of collateral as may be
tendered to it. In the event that the Corporation fails to specify in a
Certificate or Written Instructions the name of the issuer, the title and number
of shares or the principal amount of any particular Securities to be delivered
as collateral by the Custodian, the Custodian shall not be under any obligation
to deliver any Securities. The Custodian may require such reasonable conditions
with respect to such collateral and its dealings with third-party lenders as it
may deem appropriate.
ARTICLE IX
CONCERNING THE CUSTODIAN
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1. Except as otherwise provided herein, the Custodian shall not be liable
for any loss or damage, including counsel fees, resulting from its action or
omission to act or otherwise, except for any such loss or damage arising out of
its own negligence or willful misconduct. The Corporation, on behalf of the Fund
and only from Fund Assets (or insurance purchased by the Corporation with
respect to its liabilities on behalf of the Fund hereunder), shall defend,
indemnify and hold harmless the Custodian and its directors, officers, employees
and agents with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising or alleged to arise from or relating to the
Corporation's duties with respect to the Fund hereunder or any other action or
inaction of the Corporation or its Directors, officers, employees or agents as
to the Fund, except such as may arise from the negligent action, omission or
willful misconduct of the Custodian, its directors, officers, employees or
agents. The Custodian shall defend, indemnify and hold harmless the Corporation
and its Directors, officers, employees or agents with respect to any loss,
claim, liability or cost (including reasonable attorneys' fees) arising or
alleged to arise from or relating to the Custodian's duties with respect to the
Fund hereunder or any other action or inaction of the Custodian or its
directors, officers, employees, agents, nominees or Sub-Custodians as to the
Fund, except such as may arise from the negligent action, omission or willful
misconduct of the Corporation, its Directors, officers, employees or agents. The
Custodian may, with respect to questions of law apply for and obtain the advice
and opinion of counsel to the Corporation at the expense of the Fund, or of its
own counsel at its own expense, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with the advice or
opinion of counsel to the Corporation, and shall be similarly protected with
respect to anything done or omitted by it in good faith in conformity with
advice or opinion of its counsel, unless counsel to the Fund shall, within a
reasonable time after being notified of legal advice received by the Custodian,
have a differing interpretation of such question of law. The Custodian shall be
liable to the Corporation for any proximate loss or damage resulting from the
use of the Book-Entry System or any Depository arising by reason of any
negligence, misfeasance or misconduct on the part of the Custodian or any of its
employees, agents, nominees or Sub-Custodians but not for any special,
incidental, consequential, or punitive damages; provided, however, that nothing
contained herein shall preclude recovery by the Corporation, on behalf of the
Fund, of principal and of interest to the date of recovery on, Securities
incorrectly omitted from the Fund's account or penalties imposed on the
Corporation, in connection with the Fund, for any failures to deliver
Securities.
In any case in which one party hereto may be asked to indemnify the other
or hold the other harmless, the party from whom indemnification is sought (the
"Indemnifying Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall take over the complete defense of the claim and the
Indemnifying Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this paragraph, except
the expenses of any additional counsel retained by the Indemnified Party. In no
case shall any party claiming the right to indemnification confess any claim or
make any compromise in any case in which the other party has been asked to
indemnify such party (unless such confession or compromise is made with such
other party's prior written consent).
The obligations of the parties hereto under this paragraph shall survive
the termination of this Agreement.
2. Without limiting the generality of the foregoing, the Custodian, acting
in the capacity of Custodian hereunder, shall be under no obligation to inquire
into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by or for
the account of the Fund, the legality of the purchase thereof, or the propriety
of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the account
of the Fund, or the propriety of the amount for which the same are sold;
(c) The legality of the issue or sale of any shares of the Fund, or
the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Fund, or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by the
Corporation in respect of shares of the Fund;
(f) The legality of any borrowing by the Corporation, on behalf of the
Fund, using Securities as collateral;
(g) The sufficiency of any deposit made pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV hereof,
3. The Custodian shall not be liable for any money or collected funds in
U.S. dollars deposited in a Federal Reserve Bank in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of Article IV hereof, nor
be liable for or considered to be the Custodian of any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by it on behalf of the Fund until the Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Fund's interest at the Book-Entry System or Depository.
4. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Fund from the Dividend and
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Fund of any amount paid
by the Custodian to the Dividend and Transfer Agent of the Fund in accordance
with this Agreement.
5. Income due or payable to the Fund with respect to Fund Assets will be
credited to the account of the Fund as follows:
(a) Dividends will be credited on the first business day following
payable date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities issued
or guaranteed as to principal and/or interest by the government of the United
States or agencies or instrumentalities thereof (excluding securities issued by
the Government National Mortgage Association) will be credited on payable date
irrespective of collection.
(c) Interest on fixed rate corporate debt securities will be credited
on the first business day following payable date irrespective of collection.
(d) Interest on variable and floating rate debt securities and debt
securities issued by the Government National Mortgage Association will be
credited upon the Custodian's receipt of funds.
(e) Proceeds from options will be credited upon the Custodian's
receipt of funds.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not
be under any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in default, or
if payment is refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action or, at the Custodian's option, prepayment.
7. The Custodian may appoint one or more financial or banking institutions,
as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including,
but not limited to, banking institutions located in foreign countries, of
Securities and monies at any time owned by the Fund, upon terms and conditions
approved in a Certificate. Current Depository(s) and Sub-Custodian(s) are noted
in Appendix B. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or activities
of such Depositories or Sub-Custodians.
8. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it for the account of
the Fund are such as properly may be held by the Fund under the provisions of
the Articles of Incorporation and the Corporation's By-Laws.
9. The Custodian shall treat all records and other information relating to
the Corporation, the Fund and the Fund Assets as confidential and shall not
disclose any such records or information to any other person unless (a) the
Corporation shall have consented thereto in writing or (b) such disclosure is
compelled by law.
10. The Custodian shall be entitled to receive and the Corporation agrees
to pay to the Custodian, for the Fund's account from Fund Assets or from the
Funds; Advisor, such compensation as shall be determined pursuant to Appendix C
attached hereto, or as shall be determined pursuant to amendments to such
Appendix approved by the Custodian and the Corporation, on behalf of the Fund.
The Custodian shall be entitled to charge against any money held by it for the
account of the Fund the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement as determined by agreement of the Custodian and
the Corporation or by the final order of any court or arbitrator having
jurisdiction and as to which all rights of appeal shall have expired. The
expenses which the Custodian may charge against the account of the Fund include,
but are not limited to, the expenses of Sub-Custodians incurred in settling
transactions involving the purchase and sale of Securities of the Fund.
11. The Custodian shall be entitled to rely upon any Certificate. The
Custodian shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to Article IV or V
hereof. The Corporation agrees to forward to the Custodian Written Instructions
from Authorized Persons confirming Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Corporation agrees that the
fact that such confirming instructions are not received by the Custodian shall
in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Corporation. The Corporation agrees that
the Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions.
12. The Custodian will (a) set up and maintain proper books of account and
complete records of all transactions in the accounts maintained by the Custodian
hereunder in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31 thereof
and Rules 31 a-l and 31 a-2 thereunder, and (b) preserve for the periods
prescribed by applicable Federal statute or regulation all records required to
be so preserved. The books and records of the Custodian shall be open to
inspection and audit at reasonable times and with prior notice by Officers and
auditors employed by the Corporation.
13. The Custodian and its Sub-Custodians shall promptly send to the
Corporation, for the account of the Fund, any report received on the systems of
internal accounting control of the Book-Entry System or the Depository and with
such reports on their own systems of internal accounting control as the
Corporation may reasonably request from time to time.
14. The Custodian performs only the services of a custodian and shall have
no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund. The Custodian is not a selling
agent for shares of the Fund and performance of its duties as a custodial agent
shall not be deemed to be a recommendation to the Custodian's depositors or
others of shares of the Fund as an investment.
ARTICLE X
TERMINATION
-----------
1. Either of the parties hereto may terminate this Agreement for any reason
by giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. If such notice is given by the Corporation, on behalf of
the Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Corporation, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating a successor
custodian or custodians, each of which shall be a bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits. In
the event such notice is given by the Custodian, the Corporation shall, on or
before the termination date, deliver to the Custodian a copy of a resolution of
its Board of Directors, certified by the Secretary, designating a successor
custodian or custodians to act on behalf of the Fund. In the absence of such
designation by the Corporation, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus, and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian, provided that it
has received a notice of acceptance by the successor custodian, shall deliver,
on that date, directly to the successor custodian all Securities and monies then
owned by the Fund and held by it as Custodian. Upon termination of this
Agreement, the Corporation shall pay to the Custodian on behalf of the Fund such
compensation as may be due as of the date of such termination. The Corporation
agrees on behalf of the Fund that the Custodian shall be reimbursed for its
reasonable costs in connection with the termination of this Agreement.
2. If a successor custodian is not designated by the Corporation, on behalf
of the Fund, or by the Custodian in accordance with the preceding paragraph, or
the designated successor cannot or will not serve, the Corporation shall upon
the delivery by the Custodian to the Corporation of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the
Corporation) and monies then owned by the Fund, other than monies deposited with
a Federal Reserve Bank pursuant to a Certificate described in clause (ii) of
paragraph 2(e) of Article IV, be deemed to be the custodian for the Fund, and
the Custodian shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement, other than the duty with respect to Securities held
in the Book-Entry System which cannot be delivered to the Corporation to hold
such Securities hereunder in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
1. Appendix A sets forth the names and the signatures of all Authorized
Persons. The Corporation agrees to furnish to the Custodian, on behalf of the
Fund, a new Appendix A in form similar to the attached Appendix A, if any
present Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the present
Authorized Persons as set forth in the last delivered Appendix A.
2. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer,
Director, past, present or future as such, of the Corporation or of any
predecessor or successor, either directly or through the Corporation or any such
predecessor or successor, whether by virtue of any constitution, statute or rule
of law or equity, or be the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this Agreement and the
obligations thereunder are enforceable solely against Fund Assets, and that no
such personal liability whatever shall attach to, or is or shall be incurred by,
the organizers, shareholders, Officers, Directors of the Corporation or of any
predecessor or successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by the
Corporation have been made by the Directors of the Corporation, acting as such
Directors for and on behalf of the Fund, pursuant to the authority vested in
them under the laws of the State of Maryland, the Articles of Incorporation and
the By-Laws of the Corporation. This Agreement has been executed by Officers of
the Corporation as officers, and not individually, and the obligations contained
herein are not binding upon any of the Directors, Officers, agents or holders of
shares, personally, but bind only the Corporation and then only to the extent of
Fund Assets.
4. Such provisions of the Prospectus of the Fund and any other documents
(including advertising material) specifically mentioning the Custodian (other
than merely by name and address) shall be reviewed with the Custodian by the
Corporation.
5. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at Star
Bank Center, 000 Xxxxxx Xxxxxx, Xxxx Xxxxxxxx 0000, Xxxxxxxxxx, Xxxx 00000,
attention Custody Services Department, or at such other place as the Custodian
may from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Corporation shall be sufficiently given when
delivered to the Corporation or on the second business day following the time
such notice is deposited in the U.S. mail postage prepaid and addressed to the
Corporation at its office at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, or
at such other place as the Corporation may from time to time designate in
writing.
7. This Agreement with the exception of Appendices A & B may not be amended
or modified in any manner except by a written agreement executed by both parties
with the same formality as this Agreement, and authorized and approved by a
resolution of the Board of Directors of the Corporation.
8. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Corporation or by the Custodian,
and no attempted assignment by the Corporation or the Custodian shall be
effective without the written consent of the other party hereto.
9. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
10. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
ATTEST: Frontier Funds, Inc.
Equity Portfolio
/s/ Xxxxxxx X. Xxxxx By: /s/Xxxxx X. Xxx, Pres.
---------------------------------- -------------------------------------
ATTEST: Star Bank, N.A.
/s/ Xxxxxx X. Xxxxxxx By:/s/ Xxxxxxxx X. Xxxxxx, Senior
---------------------------------- Trust Officer
APPENDIX A
OFFICERS
--------
AUTHORIZED PERSONS SPECIMEN SIGNATURES
------------------ -------------------
President: Xxxxx X. Xxx /s/ Xxxxx X. Xxx
---------------------- --------------------------
Secretary: Xxx X. Xxxxxxxxx /s/ Xxx X. Xxxxxxxxx
---------------------- --------------------------
Treasurer: ---------------------- --------------------------
Controller: ---------------------- --------------------------
Adviser Employees:*---------------- --------------------------
*---------------- --------------------------
*---------------- --------------------------
*Authority restricted; does not include: (i) authority to sign checks on
Fund accounts or make other withdrawals or distributions of Fund monies or
(ii) such other authority as may be withheld or limited by a Certificate or
Written Instructions signed by two Officers of the Trust and delivered to
the Custodian.
APPENDIX B
The following Depository(s) and Sub-Custodian(s) are employed currently by Star
Bank, N.A. for securities processing and control . . .
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
CUSTODY COMPENSATION SCHEDULE
EXHIBIT C
STAR BANK, N.A. AS CUSTODIAN, WILL RECEIVE MONTHLY COMPENSATION FOR SERVICES
ACCORDING TO THE TERMS OF THE FOLLOWING SCHEDULE:
1. PORTFOLIO TRANSACTION FEES:
a) For each repurchase agreement transaction $ 7.00
b) For each portfolio transaction processed through 11.00
DTC or Federal Reserve
c) For each portfolio transaction processed through 25.00
our New York custodian
d) For each GNMA/Amortized Security Purchase 40.00
e) For each GNMA Print/Int Paydowns, GNMA Sales 8.00
f) For each option/future contract written, exercised 25.00
or expired
g) For Each Disbursement 5.00
(Fund expenses only)
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange.
2) MONTHLY BASE FEE - PER FUND $400
3) OUT-OF-POCKET EXPENSES
The only out-of-pocket expenses charged to your account will
be shipping fees or transfer fees.
EARNINGS CREDITS
On a monthly basis any excess earnings credits for uninvested custody
balances will be applied against transaction fees (as referenced in item #l
above).
Earnings credits are based on the floating 3-month average T-xxxx rate on
the investable balance.
All custody compensation is payable monthly
This fee schedule will be guaranteed for a period of two years from the
inception date.
CASH MANAGEMENT
COMPENSATION SCHEDULE
EXHIBIT C
SERVICES UNIT COST
-------- ---------
Account Maintenance $8.50
Deposits .25
Deposited Items .075
Checks Paid .012
Balance Reporting 50.00
ACH 50
Deposited Items
Returned 2.50
NSF 17.50
Data Transmission 110.00
*Lockbox Maintenance 37.00
Lockbox items Processed
(with copy of check) .246
Lockbox Items Processed
(without copy of check) .186
Wires - Outgoing (Repetitive) 10.00
- Incoming (with notification) 8.00
Stop Payments 17.50
**Uncollected Charge Star Bank Prime
Rate as of first of
month plus 2%
*With the use of lockbox, the collected balance in the demand doposit
account will be significantly increased and therefore earnings to offset
services will be maximized.
**Fees for uncollected balances are figured on the monthly average.
EARNINGS CREDITS:
Earnings credits are based on the floating 3-month average T-xxxx rate on the
investable balance.
We carry earnings credits forward and you have the option of paying your cash
management fees monthly or annually.
This fee schedule will remain in effect for a period of two years from the
inception date.
