AMENDED AND RESTATED CUSTODY AGREEMENT
AMENDED
AND RESTATED
THIS AMENDED AND RESTATED CUSTODY
AGREEMENT (this “Agreement”) is made and entered effective as of the 17th
day of November, 2009, by and between LKCM FUNDS, a Delaware
statutory trust (the “Trust”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under
the laws of the United States of America (the “Custodian”).
WHEREAS,
the Trust is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end management investment company, and is
authorized to issue shares of beneficial interest in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS,
the Custodian is a bank having the qualifications prescribed in Section 26(a)(1)
of the 1940 Act; and
WHEREAS,
the Trust desires to retain the Custodian to act as custodian of the cash and
securities of each series of the Trust listed on Exhibit C hereto (as
amended from time to time) (each a “Fund” and collectively, the “Funds”);
and
WHEREAS,
the Board of Trustees of the Trust has delegated to the Custodian the
responsibilities set forth in Rule 17f-5(c) under the 1940 Act and the Custodian
is willing to undertake the responsibilities and serve as the foreign custody
manager for the Trust.
NOW,
THEREFORE, in consideration of the promises and mutual covenants herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
Whenever
used in this Agreement, the following words and phrases shall have the meanings
set forth below unless the context otherwise requires:
1.01 “Authorized Person”
means any Officer or person who has been designated as such by written notice
and named in Exhibit
A and delivered to the Custodian by the Trust, or if the Trust has
notified the Custodian in writing that it has an authorized investment manager
or other agent, delivered to the Custodian by the Trust’s investment advisor or
other agent. Such Officer or person shall continue to be an
Authorized Person until such time as the Custodian receives Written Instructions
from the Trust or the Trust’s investment advisor or other agent that any such
person is no longer an Authorized Person.
1.02 “Board of Trustees”
shall mean the trustees from time to time serving under the Trust’s declaration
of trust, as amended from time to time.
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1.03 “Book-Entry System”
shall mean a federal book-entry system as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFR Part 350, or in such
book-entry regulations of federal agencies as are substantially in the form of
such Subpart O.
1.04 “Business Day” shall
mean any day recognized as a settlement day by The New York Stock Exchange, and
any other day for which the Trust computes the net asset values of Shares of the
Funds.
1.05 “Eligible Foreign
Custodian” has the meaning set forth in Rule 17f-5(a)(1), including a
majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5),
a bank holding company meeting the requirements of an Eligible Foreign Custodian
(as set forth in Rule 17f-5 or by other appropriate action of the SEC), or a
foreign branch of a Bank (as defined in Section 2(a)(5) of the 0000 Xxx) meeting
the requirements of a custodian under Section 17(f) of the 1940 Act; the term
does not include any Eligible Securities Depository.
1.06 “Eligible Securities
Depository” shall mean a system for the central handling of securities as
that term is defined in Rule 17f-4 and 17f-7 under the 1940 Act.
1.07 “Foreign Securities”
means any of the Funds’ investments (including foreign currencies) for which the
primary market is outside the United States and such cash and cash equivalents
as are reasonably necessary to effect the Funds’ transactions in such
investments.
1.08 “Fund Custody
Account” shall mean any of the accounts in the name of the Trust, which
is provided for in Section 3.2 below.
1.09 “IRS” shall mean the
Internal Revenue Service.
1.10 “FINRA” shall mean
the Financial Industry Regulatory Authority, Inc.
1.11 “Officer” shall mean
the Chairman, President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer of
the Trust.
1.12 “Oral Instructions”
shall mean instructions orally transmitted to and accepted by the Custodian
because such instructions are: (i) reasonably believed by the
Custodian to have been given by any two Authorized Persons, (ii) recorded and
kept among the records of the Custodian made in the ordinary course of business,
and (iii) orally confirmed by the Custodian. The Trust shall cause
all Oral Instructions to be confirmed by Written Instructions prior to the end
of the next Business Day. If such Written Instructions confirming
Oral Instructions are not received by the Custodian prior to a transaction, it
shall in no way affect the validity of the transaction or the authorization
thereof by the Trust. If Oral Instructions vary from the Written
Instructions that purport to confirm them, the Custodian shall notify the Trust
of such variance but such Oral Instructions will govern unless the Custodian has
not yet acted.
1.13 “Proper Instructions”
shall mean Oral Instructions or Written Instructions.
1.14 “SEC” shall mean the
Securities and Exchange Commission.
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1.15 “Securities” shall
include, without limitation, common and preferred stocks, bonds, call options,
put options, debentures, notes, bank certificates of deposit, bankers'
acceptances, mortgage-backed securities or other obligations, and any
certificates, receipts, warrants or other instruments or documents representing
rights to receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or any similar property or
assets that the Custodian or its agents have the facilities to clear and
service.
1.16 “Securities
Depository” shall mean The Depository Trust Company and any other
clearing agency registered with the SEC under Section 17A of the Securities
Exchange Act of 1934, as amended (the “1934 Act”), which acts as a system for
the central handling of Securities where all Securities of any particular class
or series of an issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery of
the Securities.
1.17 “Shares” shall mean,
with respect to a Fund, the units of beneficial interest issued by the Trust on
account of such Fund.
1.18 “Sub-Custodian” shall
mean and include (i) any branch of a “U.S. bank,” as that term is defined in
Rule 17f-5 under the 1940 Act, and (ii) any “Eligible Foreign Custodian” having
a contract with the Custodian which the Custodian has determined will provide
reasonable care of assets of the Funds based on the standards specified in
Section 3.3 below. Such contract shall be in writing and shall
include provisions that provide: (i) for indemnification or insurance
arrangements (or any combination of the foregoing) such that the Funds will be
adequately protected against the risk of loss of assets held in accordance with
such contract; (ii) that the Foreign Securities will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of the
Sub-Custodian or its creditors except a claim of payment for their safe custody
or administration, in the case of cash deposits, liens or rights in favor of
creditors of the Sub-Custodian arising under bankruptcy, insolvency, or similar
laws; (iii) that beneficial ownership for the Foreign Securities will be freely
transferable without the payment of money or value other than for safe custody
or administration; (iv) that adequate records will be maintained identifying the
assets as belonging to the Funds or as being held by a third party for the
benefit of the Funds; (v) that the Funds’ independent public accountants will be
given access to those records or confirmation of the contents of those records;
and (vi) that the Funds will receive periodic reports with respect to the
safekeeping of the Funds’ assets, including, but not limited to, notification of
any transfer to or from a Fund's account or a third party account containing
assets held for the benefit of such Fund. Such contract may contain,
in lieu of any or all of the provisions specified in (i)-(vi) above, such other
provisions that the Custodian determines will provide, in their entirety, the
same or a greater level of care and protection for the Funds’ assets as the
specified provisions.
1.19 “Written
Instructions” shall mean (i) written communications actually received by
the Custodian and signed by an Authorized Person, (ii) communications by telex
or any other such system from one or more persons reasonably believed by the
Custodian to be Authorized Persons, or (iii) communications between
electro-mechanical or electronic devices provided that the use of such devices
and the procedures for the use thereof shall have been approved by resolutions
of the Board of Trustees, a copy of which, certified by an Officer, shall have
been delivered to the Custodian.
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ARTICLE
II.
APPOINTMENT
OF CUSTODIAN
2.01 Appointment. The
Trust hereby appoints the Custodian as custodian of all Securities and cash
owned by or in the possession of the Funds at any time during the period of this
Agreement, on the terms and conditions set forth in this Agreement, and the
Custodian hereby accepts such appointment and agrees to perform the services and
duties set forth in this Agreement. The Trust hereby delegates to the
Custodian, subject to Rule 17f-5(b), the responsibilities with respect to each
Fund’s Foreign Securities, and the Custodian hereby accepts such delegation as
foreign custody manager with respect to such Fund. The services and
duties of USBFS shall be confined to those matters expressly set forth herein as
well as any additional services and duties that are customarily provided by
investment company custodians; provided, however, that in the event any such
additional services and duties materially increase the services and duties of
USBFS hereunder, the parties agree to amend this Agreement to reflect such
increased services and duties. Except as contemplated hereby, no
other duties are assumed by or may be asserted against USBFS
hereunder.
2.02 Documents to be
Furnished. The following documents, including any amendments
thereto, will be provided contemporaneously with the execution of the Agreement
to the Custodian by the Trust:
(a)
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A
copy of the Trust’s declaration of trust, certified by the
Secretary;
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(b)
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A
copy of the Trust’s bylaws, certified by the
Secretary;
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(c)
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A
copy of the resolution of the Board of Trustees of the Trust appointing
the Custodian, certified by the
Secretary;
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(d)
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A
copy of the current prospectuses of the Funds (the
“Prospectus”);
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(e)
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A
certification of the Chairman or the President and the Secretary of the
Trust setting forth the names and signatures of the current Officers of
the Trust and other Authorized Persons;
and
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(f)
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An
executed authorization required by the Shareholder Communications Act of
1985, attached hereto as Exhibit
E.
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2.03 Notice of Appointment of
Transfer Agent. The Trust agrees to notify the Custodian in
writing of the appointment, termination or change in appointment of any transfer
agent of the Funds.
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ARTICLE
III.
CUSTODY
OF CASH AND SECURITIES
3.01 Segregation. All
Securities and non-cash property held by the Custodian for the account of each
Fund (other than Securities maintained in a Securities Depository, Eligible
Securities Depository or Book-Entry System) shall be physically segregated from
other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall be
identified as subject to this Agreement.
3.02 Fund Custody
Accounts. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of the Trust
coupled with the name of such Fund, subject only to draft or order of the
Custodian, in which the Custodian shall enter and carry all Securities, cash and
other assets of such Fund which are delivered to it.
3.03 Appointment of
Agents.
(a)
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In
its discretion, the Custodian may appoint one or more Sub-Custodians to
establish and maintain arrangements with (i) Eligible Securities
Depositories or (ii) Eligible Foreign Custodians who are members of the
Sub-Custodian’s network to hold Securities and cash of each applicable
Fund and to carry out such other provisions of this Agreement as it may
determine; provided, however, that the appointment of any such agents and
maintenance of any Securities and cash of such Fund shall be at the
Custodian's expense and shall not relieve the Custodian of any of its
obligations or liabilities under this Agreement. The Custodian
shall be liable for the actions of any Sub-Custodians (regardless of
whether assets are maintained in the custody of a Sub-Custodian, a member
of its network or an Eligible Securities Depository) appointed by it as if
such actions had been done by the
Custodian.
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(b)
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If,
after the initial appointment of Sub-Custodians by the Board of Trustees
in connection with this Agreement, the Custodian wishes to appoint other
Sub-Custodians to hold property of the Funds, it will so notify the Trust
and make the necessary determinations as to any such new Sub-Custodian's
eligibility under Rule 17f-5 under the 1940
Act.
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(c)
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In
performing its delegated responsibilities as foreign custody manager to
place or maintain each Fund’s assets with a Sub-Custodian, the Custodian
will determine that such Fund’s assets will be subject to reasonable care,
based on the standards applicable to custodians in the country in which
such Fund’s assets will be held by that Sub-Custodian, after considering
all factors relevant to safekeeping of such assets, including, without
limitation the factors specified in Rule
17f-5(c)(1).
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(d)
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The
agreement between the Custodian and each Sub-Custodian acting hereunder
shall contain the required provisions set forth in Rule 17f-5(c)(2) under
the 1940 Act.
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(e)
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At
the end of each calendar quarter, the Custodian shall provide written
reports notifying the Board of Trustees of the withdrawal or placement of
the Securities and cash of each Fund with a Sub-Custodian and of any
material changes in such Fund’s arrangements. Such reports
shall include an analysis of the custody risks associated with maintaining
assets with any Eligible Securities Depositories. The Custodian
shall promptly take such steps as may be required to withdraw assets of
such Fund from any Sub-Custodian arrangement that has ceased to meet the
requirements of Rule 17f-5 or Rule 17f-7 under the 1940 Act, as
applicable.
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(f)
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With
respect to its responsibilities under this Section 3.3, the Custodian
hereby warrants to the Trust that it agrees to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of property of the Funds. The Custodian further
warrants that the Funds’ assets will be subject to reasonable care if
maintained with a Sub-Custodian, after considering all factors relevant to
the safekeeping of such assets, including, without
limitation: (i) the Sub-Custodian's practices, procedures, and
internal controls for certificated securities (if applicable), its method
of keeping custodial records, and its security and data protection
practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care for such Fund’s
assets; (iii) the Sub-Custodian's general reputation and
standing and, in the case of a Securities Depository, the Securities
Depository's operating history and number of participants; and
(iv) whether such Fund will have jurisdiction over and be able
to enforce judgments against the Sub-Custodian, such as by virtue of the
existence of any offices of the Sub-Custodian in the United States or the
Sub-Custodian's consent to service of process in the United
States.
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(g)
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The
Custodian shall establish a system or ensure that its Sub-Custodian has
established a system to monitor on a continuing basis (i) the
appropriateness of maintaining a Fund’s assets with a Sub-Custodian or
Eligible Foreign Custodians who are members of a Sub-Custodian’s network;
(ii) the performance of the contract governing such Fund’s arrangements
with such Sub-Custodian or Eligible Foreign Custodian’s members of a
Sub-Custodian’s network; and (iii) the custody risks of maintaining assets
with an Eligible Securities Depository. The Custodian must
promptly notify such Fund or its investment adviser of any material change
in these risks.
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(h)
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The
Custodian shall use reasonable commercial efforts to collect all income
and other payments with respect to Foreign Securities to which the Funds
shall be entitled and shall credit such income, as collected, to the
Trust. In the event that extraordinary measures are required to
collect such income, the Trust and Custodian shall consult as to the
measures and as to the compensation and expenses of the Custodian relating
to such measures.
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3.04 Delivery of Assets to
Custodian. The Trust shall deliver, or cause to be delivered,
to the Custodian all of the Funds’ Securities, cash and other investment assets,
including (i) all payments of income, payments of principal and capital
distributions received by the Funds with respect to such Securities, cash or
other assets owned by the Funds at any time during the period of this Agreement,
and (ii) all cash received by the Funds for the issuance of
Shares. The Custodian shall not be responsible for such Securities,
cash or other assets until actually received by it.
3.05 Securities Depositories and
Book-Entry Systems. The Custodian may deposit and/or maintain
Securities of the Funds in a Securities Depository or in a Book-Entry System,
subject to the following provisions:
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(a)
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The
Custodian, on an on-going basis, shall deposit in a Securities Depository
or Book-Entry System all Securities eligible for deposit therein and shall
make use of such Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance hereunder,
including, without limitation, in connection with settlements of purchases
and sales of Securities, loans of Securities, and deliveries and returns
of collateral consisting of
Securities.
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(b)
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Securities
of each Fund kept in a Book-Entry System or Securities Depository shall be
kept in an account (“Depository Account”) of the Custodian in such
Book-Entry System or Securities Depository which includes only assets held
by the Custodian as a fiduciary, custodian or otherwise for
customers.
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(c)
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The
records of the Custodian with respect to Securities of each Fund
maintained in a Book-Entry System or Securities Depository shall, by
book-entry, identify such Securities as belonging to such
Fund.
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(d)
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If
Securities purchased by a Fund are to be held in a Book-Entry System or
Securities Depository, the Custodian shall pay for such Securities upon
(i) receipt of advice from the Book-Entry System or Securities Depository
that such Securities have been transferred to the Depository Account, and
(ii) the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of such Fund. If
Securities sold by a Fund are held in a Book-Entry System or Securities
Depository, the Custodian shall transfer such Securities upon (i) receipt
of advice from the Book-Entry System or Securities Depository that payment
for such Securities has been transferred to the Depository Account, and
(ii) the making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of such
Fund.
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(e)
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The
Custodian shall provide the Trust with copies of any report (obtained by
the Custodian from a Book-Entry System or Securities Depository in which
Securities of the Funds are kept) on the internal accounting controls and
procedures for safeguarding Securities deposited in such Book-Entry System
or Securities Depository.
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(f)
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Notwithstanding
anything to the contrary in this Agreement, the Custodian shall be liable
to the Trust for any loss or damage to a Fund resulting from (i) the use
of a Book-Entry System or Securities Depository by reason of any
negligence or willful misconduct on the part of the Custodian or any
Sub-Custodian, or (ii) failure of the Custodian or any Sub-Custodian to
enforce effectively such rights as it may have against a Book-Entry System
or Securities Depository. At its election, the Trust shall be
subrogated to the rights of the Custodian with respect to any claim
against a Book-Entry System or Securities Depository or any other person
from any loss or damage to such Fund arising from the use of such
Book-Entry System or Securities Depository, if and to the extent that such
Fund has not been made whole for any such loss or
damage.
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(g)
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With
respect to its responsibilities under this Section 3.05 and pursuant
to Rule 17f-4 under the 1940 Act, the Custodian hereby warrants to
the Trust that it agrees to (i) exercise due care in accordance with
reasonable commercial standards in discharging its duty as a securities
intermediary to obtain and thereafter maintain such assets,
(ii) provide, promptly upon request by the Trust, such reports as are
available concerning the Custodian’s internal accounting controls and
financial strength, and (iii) require any Sub-Custodian to exercise
due care in accordance with reasonable commercial standards in discharging
its duty as a securities intermediary to obtain and thereafter maintain
assets corresponding to the security entitlements of its entitlement
holders.
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3.06 Disbursement of Moneys from
Fund Custody Account. Upon receipt of Proper Instructions, the
Custodian shall disburse moneys from a Fund Custody Account but only in the
following cases:
(a)
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For
the purchase of Securities for the applicable Fund but only in accordance
with Section 4.01 of this Agreement and only (i) in the case of Securities
(other than options on Securities, futures contracts and options on
futures contracts), against the delivery to the Custodian (or any
Sub-Custodian) of such Securities registered as provided in Section 3.09
below or in proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or Securities
Depository, in accordance with the conditions set forth in Section 3.05
above; (ii) in the case of options on Securities, against delivery to the
Custodian (or any Sub-Custodian) of such receipts as are required by the
customs prevailing among dealers in such options; (iii) in the case of
futures contracts and options on futures contracts, against delivery to
the Custodian (or any Sub-Custodian) of evidence of title thereto in favor
of such Fund or any nominee referred to in Section 3.09 below; and (iv) in
the case of repurchase or reverse repurchase agreements entered into
between the Trust and a bank which is a member of the Federal Reserve
System or between the Trust and a primary dealer in U.S. Government
securities, against delivery of the purchased Securities either in
certificate form or through an entry crediting the Custodian's account at
a Book-Entry System or Securities Depository with such
Securities;
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(b)
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In
connection with the conversion, exchange or surrender, as set forth in
Section 3.07(f) below, of Securities owned by such
Fund;
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(c)
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For
the payment of any dividends or capital gain distributions declared by
such Fund;
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(d)
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In
payment of the redemption price of Shares as provided in Section 5.01
below;
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(e)
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For
the payment of any expense or liability incurred by such Fund, including,
but not limited to, the following payments for the account of such
Fund: interest; taxes; administration, investment advisory,
accounting, auditing, transfer agent, custodian, trustee and legal fees;
and other operating expenses of such Fund; in all cases, whether or not
such expenses are to be in whole or in part capitalized or treated as
deferred expenses;
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(f)
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For
transfer in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the 1934 Act and
a member of FINRA, relating to compliance with rules of the Options
Clearing Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding escrow or
other arrangements in connection with transactions by such
Fund;
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(g)
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For
transfer in accordance with the provisions of any agreement among the
Trust, the Custodian and a futures commission merchant registered under
the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account deposits in
connection with transactions by such
Fund;
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(h)
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For
the funding of any uncertificated time deposit or other interest-bearing
account with any banking institution (including the Custodian), which
deposit or account has a term of one year or less;
and
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(i)
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For
any other proper purpose, but only upon receipt, in addition to Proper
Instructions, of a copy of a resolution of the Board of Trustees,
certified by an Officer, specifying the amount and purpose of such
payment, declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom such payment is to be
made.
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3.07 Delivery of Securities from
Fund Custody Account. Upon receipt of Proper Instructions, the
Custodian shall release and deliver, or cause the Sub-Custodian to release and
deliver, Securities from a Fund Custody Account but only in the following
cases:
(a)
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Upon
the sale of Securities for the account of the applicable Fund but only
against receipt of payment therefor in cash, by certified or cashiers
check or bank credit;
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(b)
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In
the case of a sale effected through a Book-Entry System or Securities
Depository, in accordance with the provisions of Section 3.05
above;
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(c)
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To
an offeror’s depository agent in connection with tender or other similar
offers for Securities of such Fund; provided that, in any such case, the
cash or other consideration is to be delivered to the
Custodian;
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(d)
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To
the issuer thereof or its agent (i) for transfer into the name of such
Fund, the Custodian or any Sub-Custodian, or any nominee or nominees of
any of the foregoing, or (ii) 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;
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(e)
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To
the broker selling the Securities, for examination in accordance with the
“street delivery” custom;
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(f)
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For
exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the issuer of such
Securities, or pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the issuance or
cancellation of depository receipts; provided that, in any such case, the
new Securities and cash, if any, are to be delivered to the
Custodian;
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(g)
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Upon
receipt of payment therefor pursuant to any repurchase or reverse
repurchase agreement entered into by such
Fund;
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(h)
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In
the case of warrants, rights or similar Securities, upon the exercise
thereof, provided that, in any such case, the new Securities and cash, if
any, are to be delivered to the
Custodian;
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(i)
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For
delivery in connection with any loans of Securities of such Fund, but only
against receipt of such collateral as the Trust shall have specified to
the Custodian in Proper
Instructions;
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(j)
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For
delivery as security in connection with any borrowings by such Fund
requiring a pledge of assets by the Trust, but only against receipt by the
Custodian of the amounts borrowed;
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(k)
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Pursuant
to any authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the
Trust;
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(l)
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For
delivery in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the 1934 Act and
a member of FINRA, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding escrow or
other arrangements in connection with transactions by such
Fund;
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(m)
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For
delivery in accordance with the provisions of any agreement among the
Trust, the Custodian and a futures commission merchant registered under
the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account deposits in
connection with transactions by such
Fund;
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(n)
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For
any other proper corporate purpose, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board of Trustees,
certified by an Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such Securities shall be made;
or
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(o)
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To
brokers, clearing banks or other clearing agents for examination or trade
execution in accordance with market custom; provided that in any such case
the Custodian shall have no responsibility or liability for any loss
arising from the delivery of such securities prior to receiving payment
for such securities except as may arise from the Custodian’s own
negligence or willful misconduct.
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3.08 Actions Not Requiring Proper
Instructions. Unless otherwise instructed by the Trust, the
Custodian shall with respect to all Securities held for each Fund:
(a)
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Subject
to Section 9.04 below, collect on a timely basis all income and other
payments to which such Fund is entitled either by law or pursuant to
custom in the securities business;
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(b)
|
Present
for payment and, subject to Section 9.04 below, collect on a timely basis
the amount payable upon all Securities which may mature or be called,
redeemed, or retired, or otherwise become
payable;
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(c)
|
Endorse
for collection, in the name of such Fund, checks, drafts and other
negotiable instruments;
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(d)
|
Surrender
interim receipts or Securities in temporary form for Securities in
definitive form;
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10
(e)
|
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 now or hereafter in effect, and prepare and submit
reports to the IRS and the Trust at such time, in such manner and
containing such information as is prescribed by the
IRS;
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(f)
|
Hold
for such Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all rights
and similar Securities issued with respect to Securities of such Fund;
and
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(g)
|
In
general, and except as otherwise directed in Proper Instructions, attend
to all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with Securities and
other assets of such Fund.
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3.09 Registration and Transfer of
Securities. All Securities held for each Fund that are issued
or issuable only in bearer form shall be held by the Custodian in that form,
provided that any such Securities shall be held in a Book-Entry System if
eligible therefor. All other Securities held for each Fund may be
registered in the name of such Fund, the Custodian, a Sub-Custodian or any
nominee thereof, or in the name of a Book-Entry System, Securities Depository or
any nominee of either thereof. The records of the Custodian with
respect to foreign securities of a Fund that are maintained with a Sub-Custodian
in an account that is identified as belonging to the Custodian for the benefit
of its customers shall identify those securities as belonging to such
Fund. The Trust shall 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 any of the nominees referred to above or
in the name of a Book-Entry System or Securities Depository, any Securities
registered in the name of each Fund.
3.10 Records.
(a)
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The
Custodian shall maintain complete and accurate records with respect to
Securities, cash or other property held for each Fund, including (i)
journals or other records of original entry containing an itemized daily
record in detail of all receipts and deliveries of Securities and all
receipts and disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in physical
possession, (C) monies and Securities borrowed and monies and Securities
loaned (together with a record of the collateral therefor and
substitutions of such collateral), (D) dividends and interest received,
and (E) dividends receivable and interest receivable; (iii) canceled
checks and bank records related thereto; and (iv) all records relating to
its activities and obligations under this Agreement. The
Custodian shall keep such other books and records of each Fund as the
Trust shall reasonably request, or as may be required by the 1940 Act,
including, but not limited to, Section 31 of the 1940 Act and Rule 31a-2
promulgated thereunder.
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(b)
|
All
such books and records maintained by the Custodian shall (i) be maintained
in a form acceptable to the Trust and in compliance with the rules and
regulations of the SEC, (ii) be the property of the Trust and at all times
during the regular business hours of the Custodian be made available upon
request for inspection by duly authorized officers, employees or agents of
the Trust and employees or agents of the SEC, and (iii) if required to be
maintained by Rule 31a-1 under the 1940 Act, be preserved for the periods
prescribed in Rules 31a-1 and 31a-2 under the 1940
Act.
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11
3.11 Fund Reports by
Custodian. The Custodian shall furnish the Trust with a daily
activity statement and a summary of all transfers to or from each Fund Custody
Account on the day following such transfers. At least monthly, the
Custodian shall furnish the Trust with a detailed statement of the Securities
and moneys held by the Custodian and the Sub-Custodians for each Fund under this
Agreement.
3.12 Other Reports by
Custodian. As the Trust may reasonably request from time to
time, the Custodian shall provide the Trust with reports on the internal
accounting controls and procedures for safeguarding Securities which are
employed by the Custodian or any Sub-Custodian.
3.13 Proxies and Other
Materials. The Custodian shall cause all proxies relating to
Securities which are not registered in the name of a Fund to be promptly
executed by the registered holder of such Securities, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Trust such proxies, all proxy soliciting materials and all notices relating to
such Securities. With respect to the foreign Securities, the
Custodian will use reasonable commercial efforts to facilitate the exercise of
voting and other shareholder rights, subject to the laws, regulations and
practical constraints that may exist in the country where such securities are
issued. The Trust acknowledges that local conditions, including lack
of regulation, onerous procedural obligations, lack of notice and other factors
may have the effect of severely limiting the ability of the Trust to exercise
shareholder rights.
3.14 Information on Corporate
Actions. The Custodian shall promptly deliver to the Trust all
information received by the Custodian and pertaining to Securities being held by
each Fund with respect to optional tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described in the Standards of
Service Guide attached as Exhibit
B. If the Trust desires to take action with respect to any
tender offer, exchange offer or other similar transaction, the Trust shall
notify the Custodian at least three Business Days prior to the date on which the
Custodian is to take such action. The Trust will provide or cause to
be provided to the Custodian all relevant information for any Security which has
unique put/option provisions at least three Business Days prior to the beginning
date of the tender period.
ARTICLE
IV.
PURCHASE
AND SALE OF INVESTMENTS OF THE FUNDS
4.01 Purchase of
Securities. Promptly upon each purchase of Securities for each
Fund, Written Instructions shall be delivered to the Custodian, specifying (i)
the name of the issuer or writer of such Securities, and the title or other
description thereof, (ii) the number of shares, principal amount (and accrued
interest, if any) or other units purchased, (iii) the date of purchase and
settlement, (iv) the purchase price per unit, (v) the total amount payable upon
such purchase, and (vi) the name of the person to whom such amount is
payable. The Custodian shall upon receipt of such Securities
purchased by such Fund pay out of the moneys held for the account of such Fund
the total amount specified in such Written Instructions to the person named
therein. The Custodian shall not be under any obligation to pay out
moneys to cover the cost of a purchase of Securities for such Fund, if in the
applicable Fund Custody Account there is insufficient cash available to such
Fund for which such purchase was made.
12
4.02 Liability for Payment in
Advance of Receipt of Securities Purchased. In any and every
case where payment for the purchase of Securities for a Fund is made by the
Custodian in advance of receipt of the Securities purchased and in the absence
of specified Written Instructions to so pay in advance, the Custodian shall be
liable to such Fund for such payment.
4.03 Sale of
Securities. Promptly upon each sale of Securities by each
Fund, Written Instructions shall be delivered to the Custodian, specifying (i)
the name of the issuer or writer of such Securities, and the title or other
description thereof, (ii) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (iii) the date of sale and settlement,
(iv) the sale price per unit, (v) the total amount payable upon such sale, and
(vi) the person to whom such Securities are to be delivered. Upon
receipt of the total amount payable to such Fund as specified in such Written
Instructions, the Custodian shall deliver such Securities to the person
specified in such Written 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.
4.04 Delivery of Securities
Sold. Notwithstanding Section 4.03 above or any other
provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, such Fund shall bear the
risk that final payment for such Securities may not be made or that such
Securities may be returned or otherwise held or disposed of by or through the
person to whom they were delivered, and the Custodian shall have no liability
for any for the foregoing.
4.05 Payment for Securities
Sold. In its sole discretion and from time to time, the
Custodian may credit the applicable Fund Custody Account, prior to actual
receipt of final payment thereof, with (i) proceeds from the sale of Securities
which it has been instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of such Fund, and (iii) income from
cash, Securities or other assets of such Fund. Any such credit shall
be conditional upon actual receipt by Custodian of final payment and may be
reversed if final payment is not actually received in full. The
Custodian may, in its sole discretion and from time to time, permit such Fund to
use funds so credited to its Fund Custody Account in anticipation of actual
receipt of final payment. Any such funds shall be repayable
immediately upon demand made by the Custodian at any time prior to the actual
receipt of all final payments in anticipation of which funds were credited to
such Fund Custody Account.
4.06 Advances by Custodian for
Settlement. The Custodian may, in its sole discretion and from
time to time, advance funds to the Trust to facilitate the settlement of a
Fund's transactions in its Fund Custody Account. Any such advance
shall be repayable immediately upon demand made by Custodian.
13
ARTICLE
V.
REDEMPTION
OF FUND SHARES
5.01 Transfer of
Funds. From such funds as may be available for the purpose in
the relevant Fund Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares of the revelant Fund,
the Custodian shall wire each amount specified in such Proper Instructions to or
through such bank or broker-dealer as the Trust may designate.
5.02 No Duty Regarding Paying
Banks. Once the Custodian has wired amounts to a bank or
broker-dealer pursuant to Section 5.01 above, the Custodian shall not be
under any obligation to effect any further payment or distribution by such bank
or broker-dealer.
ARTICLE
VI.
SEGREGATED
ACCOUNTS
Upon
receipt of Proper Instructions, the Custodian shall establish and maintain a
segregated account or accounts for and on behalf of each Fund, into which
account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account:
(a)
|
in
accordance with the provisions of any agreement among the Trust, the
Custodian and a broker-dealer registered under the 1934 Act and a member
of FINRA (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of the
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
such Fund;
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(b)
|
for
purposes of segregating cash or Securities in connection with securities
options purchased or written by such Fund or in connection with financial
futures contracts (or options thereon) purchased or sold by such
Fund;
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(c)
|
which
constitute collateral for loans of Securities made by such
Fund;
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(d)
|
for
purposes of compliance by such Fund with requirements under the 1940 Act
for the maintenance of segregated accounts by registered investment
companies in connection with reverse repurchase agreements and
when-issued, delayed delivery and firm commitment transactions;
and
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(e)
|
for
other proper corporate purposes, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of
Trustees, certified by an Officer, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.
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14
Each
segregated account established under this Article VI shall be established and
maintained for the applicable Fund only. All Proper Instructions
relating to a segregated account shall specify the applicable Fund.
ARTICLE
VII.
COMPENSATION
OF CUSTODIAN
7.01 Compensation. The
Custodian shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit D hereto (as
amended from time to time). The Custodian shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by the
Custodian in performing its duties hereunder. The Trust shall pay all
such fees and reimbursable expenses within 30 calendar days following receipt of
the billing notice, except for any fee or expense subject to a good faith
dispute. The Trust shall notify the Custodian in writing within 30
calendar days following receipt of each invoice if the Trust is disputing any
amounts in good faith. The Trust shall pay such disputed amounts within 10
calendar days of the day on which the parties agree to the amount to be
paid. Notwithstanding anything to the contrary, amounts owed by the
Trust to the Custodian shall only be paid out of the assets and property of the
particular Fund involved.
7.02 Overdrafts. The Trust
is responsible for maintaining an appropriate level of short term cash
investments to accommodate cash outflows. The Trust may obtain a
formal line of credit for potential overdrafts of its custody
account. In the event of an overdraft or in the event the line of
credit is insufficient to cover an overdraft, the overdraft amount or the
overdraft amount that exceeds the line of credit will be charged in accordance
with the fee schedule set forth on Exhibit D hereto (as
amended from time to time)
ARTICLE
VIII.
REPRESENTATIONS
AND WARRANTIES
8.01 Representations and
Warranties of the Trust. The Trust hereby represents and
warrants to the Custodian, which representations and warranties shall be deemed
to be continuing throughout the term of this Agreement, that:
(a)
|
It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(b)
|
This
Agreement has been duly authorized, executed and delivered by the Trust in
accordance with all requisite action and constitutes a valid and legally
binding obligation of the Trust, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors
and secured parties; and
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(c)
|
It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement.
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15
8.02 Representations and
Warranties of the Custodian. The Custodian hereby represents
and warrants to the Trust, which representations and warranties shall be deemed
to be continuing throughout the term of this Agreement, that:
(a)
|
It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(b)
|
It
is a U.S. Bank as defined in section (a)(7) of Rule
17f-5.
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(c)
|
This
Agreement has been duly authorized, executed and delivered by the
Custodian in accordance with all requisite action and constitutes a valid
and legally binding obligation of the Custodian, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties;
and
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(d)
|
It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement.
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ARTICLE
IX.
CONCERNING
THE CUSTODIAN
9.01 Standard of Care. The
Custodian shall exercise reasonable care in the performance of its duties under
this Agreement. The Custodian shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with its duties under this Agreement, except a loss arising out of or relating
to the Custodian’s (or a Sub-Custodian’s) refusal or failure to comply with the
terms of this Agreement (or any sub-custody agreement) or from its (or a
Sub-Custodian’s) bad faith, negligence or willful misconduct in the performance
of its duties under this Agreement (or any sub-custody
agreement). The Custodian shall be entitled to rely on and may act
upon advice of counsel on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. The
Custodian shall promptly notify the Trust of any action taken or omitted by the
Custodian pursuant to advice of counsel.
9.02 Actual Collection
Required. The Custodian shall not be liable for, or considered
to be the custodian of, any cash belonging to a Fund or any money represented by
a check, draft or other instrument for the payment of money, until the Custodian
or its agents actually receive such cash or collect on such
instrument.
16
9.03 No Responsibility for Title,
etc. So long as and to the extent that it is in the exercise
of reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received or
delivered by it pursuant to this Agreement.
9.04 Limitation on Duty to
Collect. Custodian shall not be required to enforce
collection, by legal means or otherwise, of any money or property due and
payable with respect to Securities held for a Fund if such Securities are in
default or payment is not made after due demand or presentation.
9.05 Reliance Upon Documents and
Instructions. The Custodian shall be entitled to rely upon any
certificate, notice or other instrument in writing received by it and reasonably
believed by it to be genuine. The Custodian shall be entitled to rely
upon any Oral Instructions and any Written Instructions actually received by it
pursuant to this Agreement.
9.06 Cooperation. The
Custodian shall cooperate with and supply necessary information to the entity or
entities appointed by the Trust to keep the books of account of the Funds and/or
compute the value of the assets of the Funds. The Custodian shall
take all such reasonable actions as the Trust may from time to time request to
enable the Trust to obtain, from year to year, favorable opinions from the
Trust's independent accountants with respect to the Custodian's activities
hereunder in connection with (i) the preparation of the Trust's reports on Form
N-1A and Form N-SAR and any other reports required by the SEC, and (ii) the
fulfillment by the Trust of any other requirements of the SEC.
ARTICLE
X.
INDEMNIFICATION
10.01
Indemnification by
Trust. The Trust shall indemnify and hold harmless the
Custodian, any Sub-Custodian and any nominee thereof (each, an “Indemnified
Party” and collectively, the “Indemnified Parties”) from and against any and all
claims, demands, losses, expenses and liabilities of any and every nature
(including reasonable attorneys' fees) that an Indemnified Party may sustain or
incur or that may be asserted against an Indemnified Party by any person arising
directly or indirectly (i) from the fact that Securities are registered in the
name of any such nominee, (ii) from any action taken or omitted to be taken by
the Custodian or such Sub-Custodian (a) at the request or direction of or in
reliance on the advice of the Trust, or (b) upon Proper Instructions, or (iii)
from the performance of its obligations under this Agreement or any sub-custody
agreement, provided that neither the Custodian nor any such Sub-Custodian shall
be indemnified and held harmless from and against any such claim, demand, loss,
expense or liability arising out of or relating to its refusal or failure to
comply with the terms of this Agreement (or any sub-custody agreement), or from
its bad faith, negligence or willful misconduct in the performance of its duties
under this Agreement (or any sub-custody agreement). This indemnity
shall be a continuing obligation of the Trust, its successors and assigns,
notwithstanding the termination of this Agreement. As used in this
paragraph, the terms “Custodian” and “Sub-Custodian” shall include their
respective directors, officers and employees.
17
10.02
Indemnification by
Custodian. The Custodian shall indemnify and hold harmless the
Trust from and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys’ fees) that
the Trust may sustain or incur or that may be asserted against the Trust by any
person arising directly or indirectly out of any action taken or omitted to be
taken by an Indemnified Party as a result of the Indemnified Party’s refusal or
failure to comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement (or any sub-custody
agreement). This indemnity shall be a continuing obligation of the
Custodian, its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term “Trust” shall include
the Trust’s trustees, officers and employees.
10.03
Security. If
the Custodian advances cash or Securities to a Fund for any purpose, either at
the Trust's request or as otherwise contemplated in this Agreement, or in the
event that the Custodian or its nominee incurs, in connection with its
performance under this Agreement, any claim, demand, loss, expense or liability
(including reasonable attorneys' fees) (except such as may arise from its or its
nominee's bad faith, negligence or willful misconduct), then, in any such event,
any property at any time held for the account of such Fund shall be security
therefor, and should such Fund fail promptly to repay or indemnify the
Custodian, the Custodian shall be entitled to utilize available cash of such
Fund and to dispose of other assets of such Fund to the extent necessary to
obtain reimbursement or indemnification.
10.04
Miscellaneous.
(a)
|
Neither
party to this Agreement shall be liable to the other party for
consequential, special or punitive damages under any provision of this
Agreement.
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(b)
|
The
indemnity provisions of this Article shall indefinitely survive the
termination and/or assignment of this
Agreement.
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(c)
|
In
order that the indemnification provisions contained in this Article X
shall apply, it is understood that if in any case the indemnitor may be
asked to indemnify or hold the indemnitee harmless, the indemnitor shall
be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the indemnitee
will use all reasonable care to notify the indemnitor promptly concerning
any situation that presents or appears likely to present the probability
of a claim for indemnification. The indemnitor shall have the option to
defend the indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it
will so notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this Article X. The indemnitee shall in
no case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor’s prior written consent.
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18
ARTICLE
XI.
FORCE MAJEURE
Neither
the Custodian nor the Trust shall be liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; acts of terrorism; sabotage; strikes; epidemics;
riots; power failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that in the event of a failure or delay, the
Custodian (i) shall not discriminate against a Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement, and (ii) shall
use its best efforts to ameliorate the effects of any such failure or
delay.
ARTICLE
XII.
PROPRIETARY
AND CONFIDENTIAL INFORMATION
12.01
The
Custodian agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Trust, all records
and other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except (i) after prior notification to
and approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where the Custodian may be exposed to civil or
criminal contempt proceedings for failure to comply, (ii) when requested to
divulge such information by duly constituted authorities approved by the Trust,
or (iii) when so requested by the Trust. Records and other
information which have become known to the public through no wrongful act of the
Custodian or any of its employees, agents or representatives, and information
that was already in the possession of the Custodian prior to receipt thereof
from the Trust or its agent, shall not be subject to this
paragraph.
12.02
Further,
the Custodian will adhere to the privacy policies adopted by the Trust pursuant
to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from time to
time. In addition, the Custodian will comply with any other
limitations or restrictions on disclosure of portfolio holdings or other
information of the Funds set forth in the Funds’ prospectuses and statements of
additional information. In this regard, the Custodian shall have in
place and maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of, records and information relating to
the Trust and its shareholders.
19
ARTICLE
XIII.
EFFECTIVE
PERIOD; TERMINATION
13.01
Effective
Period. This Agreement shall become effective as of the date
first written above.
13.02 Termination. This
Agreement may be terminated by either party upon giving 90 days prior written
notice to the other party or such shorter period as is mutually agreed upon by
the parties. Notwithstanding the foregoing, this Agreement may be
terminated by any party upon the breach of the other party of any material term
of this Agreement if such breach is not cured within 15 days of notice of such
breach to the breaching party. In addition, the Trust may, at any
time, immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by regulatory authorities or upon the
happening of a like event at the direction of an appropriate regulatory agency
or court of competent jurisdiction.
13.03
Appointment of Successor
Custodian. If a successor custodian shall have been appointed
by the Board of Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of termination (i)
deliver directly to the successor custodian all Securities (other than
Securities held in a Book-Entry System or Securities Depository) and cash then
owned by a Fund and held by the Custodian as custodian, and (ii) transfer any
Securities held in a Book-Entry System or Securities Depository to an account of
or for the benefit of such Fund at the successor custodian, provided that the
Trust shall have paid to the Custodian all fees, expenses and other amounts to
the payment or reimbursement of which it shall then be entitled. In
addition, the Custodian shall, at the expense of the Trust, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by the Custodian under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from the form in which
the Custodian has maintained the same, the Trust shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from the Custodian’s personnel in the establishment of books, records, and other
data by such successor. Upon such delivery and transfer, the
Custodian shall be relieved of all obligations under this
Agreement.
13.04
Failure to Appoint Successor
Custodian. If a successor custodian is not designated by the
Trust on or before the date of termination of this Agreement, then the Custodian
shall have the right to deliver to a bank or trust company of its own selection,
which bank or trust company (i) is a “bank” as defined in the 1940 Act, and (ii)
has aggregate capital, surplus and undivided profits as shown on its most recent
published report of not less than $25 million, all Securities, cash and other
property held by Custodian under this Agreement and to transfer to an account of
or for a Fund at such bank or trust company all Securities of such Fund held in
a Book-Entry System or Securities Depository. Upon such delivery and
transfer, such bank or trust company shall be the successor custodian under this
Agreement and the Custodian shall be relieved of all obligations under this
Agreement. In addition, under these circumstances, all books, records
and other data of the Trust shall be returned to the Trust.
20
ARTICLE
XIV.
CLASS
ACTIONS
The
Custodian shall use its best efforts to identify and file claims for the Funds
involving any class action litigation that impacts any security the Funds may
have held during the class period. The Trust agrees that the
Custodian may file such claims on its behalf and understands that it may be
waiving and/or releasing certain rights to make claims or otherwise pursue class
action defendants who settle their claims. Further, the Trust
acknowledges that there is no guarantee these claims will result in any payment
or partial payment of potential class action proceeds and that the timing of
such payment, if any, is uncertain.
However,
the Trust may instruct the Custodian to distribute class action notices and
other relevant documentation to the Funds or their designee and, if it so
elects, will relieve the Custodian from any and all liability and responsibility
for filing class action claims on behalf of the Funds.
In the
event the Funds are closed, the Custodian shall only file the class action
claims upon written instructions by an authorized representative of the closed
Funds. Any expenses associated with such filing will be assessed
against the proceeds received of any class action settlement.
ARTICLE
XV.
MISCELLANEOUS
15.01 Compliance with
Laws. The Trust has and retains primary responsibility for all
compliance matters relating to the Funds, including but not limited to
compliance with the 1940 Act, the Internal Revenue Code of 1986, the
Xxxxxxxx-Xxxxx Act of 2002, the USA Patriot Act of 2001 and the policies and
limitations of the Funds relating to its portfolio investments as set forth in
its Prospectus and statement of additional information. The
Custodian’s services hereunder shall not relieve the Trust of its
responsibilities for assuring such compliance or the Board of Trustee’s
oversight responsibility with respect thereto. The foregoing shall
not affect the Custodian’s responsibilities for compliance and related matters
delegated to the Custodian by the Trust as expressly contemplated
hereby.
15.02 Amendment. This
Agreement may not be amended or modified in any manner except by written
agreement executed by the Custodian and the Trust, and authorized or approved by
the Board of Trustees.
15.03
Assignment. This
Agreement shall extend to and be binding upon the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Trust without the written consent of the Custodian, or
by the Custodian without the written consent of the Trust accompanied by the
authorization or approval of the Board of Trustees.
21
15.04 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to conflicts of
law principles. To the extent that the applicable laws of the State
of Ohio, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any rule or order of
the SEC thereunder.
15.05 No Agency
Relationship. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other party to this
Agreement, or to conduct business in the name, or for the account, of the other
party to this Agreement.
15.06 Services Not
Exclusive. Nothing in this Agreement shall limit or restrict
the Custodian from providing services to other parties that are similar or
identical to some or all of the services provided hereunder.
15.07 Invalidity. Any
provision of this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties.
15.08 Notices. Any
notice required or permitted to be given by either party to the other shall be
in writing and shall be deemed to have been given on the date delivered
personally or by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or on the date sent
and confirmed received by facsimile transmission to the other party’s address
set forth below:
Notice to
the Custodian shall be sent to:
U.S Bank,
N.A.
0000 X.
Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx,
XX 00000
Attn: Xxx
Xxxxxx
Phone:
000-000-0000
Fax:
000-000-0000
and
notice to the Trust shall be sent to:
LKCM
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xx.
Xxxxx, XX 00000
Attn:
Xxxxx X. Xxxxx
15.09 Multiple
Originals. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an original, but
such counterparts shall together constitute but one and the same
instrument.
22
15.10 No
Waiver. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder
shall not preclude the exercise of any other right, and the remedies provided
herein are cumulative and not exclusive of any remedies provided at law or in
equity.
15.11 References to
Custodian. The Trust shall not circulate any printed matter
which contains any reference to Custodian without the prior written approval of
Custodian, excepting printed matter contained in the Prospectus or statement of
additional information for the Funds and such other printed matter as merely
identifies Custodian as custodian for the Funds. The Trust shall
submit printed matter requiring approval to Custodian in draft form, allowing
sufficient time for review by Custodian and its counsel prior to any deadline
for printing.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
a duly authorized officer on one or more counterparts as of the date first above
written.
LKCM FUNDS | U.S. BANK NATIONAL ASSOCIATION |
By: /s/ Xxxxx X. Xxxxx | By: /s/ Xxxxxxx X. XxXxx |
Name: Xxxxx X. Xxxxx | Name: Xxxxxxx X. XxXxx |
Title: Chief Compliance Officer | Title: Vice President |
23
EXHIBIT
A
AUTHORIZED
PERSONS
Set forth below are the names and
specimen signatures of the persons authorized by the Trust to administer the
Fund Custody Accounts.
Authorized Persons
|
Specimen Signatures
|
|
24
EXHIBIT
B
U.S.
Bank Institutional Custody Services
Standards
of Service Guide
U.S.
Bank, N.A. (“U.S. Bank”) is committed to providing superior quality service to
all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change
transactions. Deadlines recited in this guide represent the times
required for U.S. Bank to guarantee processing. Failure to meet these
deadlines will result in settlement at our client's risk. In all
cases, U.S. Bank will make every effort to complete all processing on a timely
basis.
U.S. Bank
is a direct participant of the Depository Trust Company, a direct member of the
Federal Reserve Bank of Cleveland, and utilizes the Bank of New York as its
agent for ineligible and foreign securities.
For
corporate reorganizations, U.S. Bank utilizes SEI's Reorg Source, Financial
Information, Inc., XCITEK, DTC Important Notices, Capital Changes Daily (CCH)
and the Wall Street
Journal.
For bond
calls and mandatory puts, U.S. Bank utilizes SEI's Bond Source, Xxxxx
Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. U.S. Bank will not notify clients of optional put
opportunities.
Any
securities delivered free to U.S. Bank or its agents must be received three (3)
business days prior to any payment or settlement in order for the U.S. Bank
standards of service to apply.
Should
you have any questions regarding the information contained in this guide, please
feel free to contact your account representative.
The
information contained in this Standards of Service Guide is subject to
change. Should any changes be made U.S. Bank will provide you with an
updated copy of its Standards of Service Guide.
25
U.S.
Bank Security Settlement Standards
Transaction
Type
|
Instructions
Deadlines-
Central
Time
|
Securities
Eligible for DTC
● Equities
● Corporate
& municipal bonds
● Commercial
paper
● Medium-term
notes
● Collateralized
mortgage issues
● Zero coupon bonds
(already
at DTC)
|
1:00
p.m. on Settlement Date
|
Federal
Reserve book-entry securities
(includes
treasuries, agencies, GNMAs)
|
12:30
p.m. on Settlement Date
|
Bank
of New York – physical
securities
|
11::00
a.m. on Settlement Date minus one
|
Purchase
of physical security to be
held
in Milwaukee vault. Includes
private
placements
|
1
day prior to Settlement Date
|
Sale
of physical security held in
Milwaukee
vault
Proper
documents must be included if
asset
in customer’s name
|
2
days prior to Settlement Date
|
26
U.S.
Bank Payment Standards
Security
Type
|
Income
|
Principal
|
Equities
|
Payable
Date
|
|
Municipal
Bonds*
|
Payable
Date
|
Payable
Date
|
Corporate
Bonds*
|
Payable
Date
|
Payable
Date
|
Federal
Reserve Bank Book Entry*
|
Payable
Date
|
Payable
Date
|
PTC
GNMA's (P&I)
|
Payable
Date + 1
|
Payable
Date + 1
|
CMOs
*
|
||
DTC
|
Payable
Date + 1
|
Payable
Date + 1
|
SBA
Loan Certificates
|
When
Received
|
When
Received
|
Unit
Investment Trust Certificates*
|
Payable
Date
|
Payable
Date
|
Certificates
of Deposit*
|
Payable
Date + 1
|
Payable
Date + 1
|
Limited
Partnerships
|
When
Received
|
When
Received
|
Foreign
Securities
|
When
Received
|
When
Received
|
*Variable
Rate Securities
|
||
Federal
Reserve Bank Book Entry
|
Payable
Date
|
Payable
Date
|
DTC
|
Payable
Date + 1
|
Payable
Date + 1
|
|
NOTE:
|
If
a payable date falls on a weekend or bank holiday, payment will be made on
the immediately following business
day.
|
27
U.S.
Bank Corporate Reorganization Standards
Type
of Action
|
Deadline
for Client
Instructions
to
U.S. Bank – Central Time
|
|
Voluntary
offers including:
● Rights
● Warrants
● Election
mergers
● Mandatory
puts with
option to retain
● Optional
puts
● Voluntary
tenders
● Consents
● Exchanges
● Conversions
|
24
hours prior to expiration
|
|
28
EXHIBIT
C
to
the Custody Agreement
Separate
Series of LKCM Funds
Name of
Series
LKCM
Balanced Fund
LKCM
Equity Fund (Institutional Class)
LKCM
Equity Fund (Adviser Class)
LKCM
Fixed Income Fund
LKCM
International Fund
LKCM
Small Cap Equity Fund (Institutional Class)
LKCM
Small Cap Equity Fund (Adviser)
LKCM
Aquinas Growth Fund
LKCM
Aquinas Value Fund
LKCM
Aquinas Small Cap Fund
LKCM
Aquinas Fixed Income Fund
29
EXHIBIT D to the
Custody Agreement
LKCM Aquinas Funds
DOMESTIC CUSTODY SERVICES
ANNUAL FEE SCHEDULE at October, 2009
|
Annual fee based upon market value per
fund*:
[ ] basis point on the balance
Minimum annual fee per fund - $[ ]
Portfolio Transaction Fees
$[ ] per disbursement (waived if U.S. Bancorp is
Administrator)
$[ ] per US Bank repurchase agreement
transaction
$[ ] per book entry security (depository or Federal
Reserve system) and non-US Bank
repurchase agrmt
$[ ] per portfolio transaction processed through our
New York custodian definitive security
(physical)
$[ ] per principal paydown
$[ ] per option/future contract written, exercised
or expired
$[ ] per Cedel/Euroclear transaction
$[ ] per mutual fund trade
$[ ] per Fed Wire
$[ ] per margin variation Fed wire
$[ ] per short sale
$[ ] per segregated account per year
A transaction is a purchase/sale of a security, free
receipt/free delivery, maturity, tender or
exchange.
No charge for the initial conversion free receipt.
Overdrafts – charged to the account at prime interest rate plus
[ ].
Plus out-of-pocket expenses, and extraordinary expenses based
upon complexity,
including items such as shipping fees or transfer
fees.
Fees are billed monthly.
*Subject to Cost of Living adjustment based on the Milwaukee
CPI
|
30
EXHIBIT
D (continued) to the Custody Agreement
DOMESTIC CUSTODY SERVICES
ANNUAL FEE SCHEDULE at October, 2009
|
Annual fee based upon market value per
fund*:
[ ] basis point on the balance
Minimum annual fee per fund - $[ ]
CCO Support Services - $[ ] per
year
Portfolio Transaction Fees
$[ ] per disbursement (waived if U.S. Bancorp is
Administrator)
$[ ] per US Bank repurchase agreement
transaction
$[ ] per book entry security (depository or Federal
Reserve system) and non-US Bank
repurchase agrmt
$[ ] per portfolio transaction processed through our
New York custodian definitive security
(physical)
$[ ] per principal paydown
$[ ] per option/future contract written, exercised
or expired
$[ ] per Cedel/Euroclear transaction
$[ ] per mutual fund trade
$[ ] per Fed Wire
$[ ] per margin variation Fed wire
$[ ] per short sale
$[ ] per segregated account per year
A transaction is a purchase/sale of a security, free
receipt/free delivery, maturity, tender or
exchange.
No charge for the initial conversion free receipt.
Overdrafts – charged to the account at prime interest rate plus
[ ].
Plus out-of-pocket expenses, and extraordinary expenses based
upon complexity,
including items such as shipping fees or transfer
fees.
Fees are billed monthly.
|
31
EXHIBIT D (continued) to the Custody Agreement – LKCM Funds
Global Fees
ANNUAL FEE SCHEDULE at October, 2009
|
||||||||
Country
|
Instrument
|
Safekeeping
(BPS)
|
Transaction
Fee
|
Country
|
Instrument
|
Safekeeping
(BPS)
|
Transaction
Fee
|
|
Argentina
|
All
|
[ ]
|
$[ ]
|
Latvia
|
Gov't Bonds
|
[ ]
|
$[ ]
|
|
Australia
|
All
|
[ ]
|
$[ ]
|
Lebanon
|
All
|
[ ]
|
$[ ]
|
|
Austria
|
Equities/Bonds
|
[ ]
|
$[ ]
|
Lithuania
|
All
|
[ ]
|
$[ ]
|
|
Austria
|
Depo Receipt
|
[ ]
|
$[ ]
|
Luxembourg
|
All
|
[ ]
|
$[ ]
|
|
Austria
|
non ATS ALL
|
[ ]
|
$[ ]
|
Malaysia
|
All
|
[ ]
|
$[ ]
|
|
Bahrain
|
All
|
[ ]
|
$[ ]
|
Mali
|
All
|
[ ]
|
$[ ]
|
|
Bangladesh
|
All
|
[ ]
|
$[ ]
|
Malta
|
All
|
[ ]
|
$[ ]
|
|
Belgium
|
All
|
[ ]
|
$[ ]
|
Mauritius
|
All
|
[ ]
|
$[ ]
|
|
Benin
|
All
|
[ ]
|
$[ ]
|
Mexico
|
All
|
[ ]
|
$[ ]
|
|
Bermuda
|
All
|
[ ]
|
$[ ]
|
Morocco
|
All
|
[ ]
|
$[ ]
|
|
Bolivia
|
All
|
[ ]
|
$[ ]
|
Namibia
|
All
|
[ ]
|
$[ ]
|
|
Botswana
|
All
|
[ ]
|
$[ ]
|
Netherlands
|
All
|
[ ]
|
$[ ]
|
|
Brazil
|
All
|
[ ]
|
$[ ]
|
New Zealand
|
All
|
[ ]
|
$[ ]
|
|
Bulgaria
|
All
|
[ ]
|
$[ ]
|
Niger
|
All
|
[ ]
|
$[ ]
|
|
Burkina Faso
|
All
|
[ ]
|
$[ ]
|
Nigeria
|
All
|
[ ]
|
$[ ]
|
|
Canada
|
All
|
[ ]
|
$[ ]
|
Norway
|
All
|
[ ]
|
$[ ]
|
|
Chile
|
All
|
[ ]
|
$[ ]
|
Oman
|
All
|
[ ]
|
$[ ]
|
|
China-Shanghai
|
All
|
[ ]
|
$[ ]
|
Pakistan
|
All
|
[ ]
|
$[ ]
|
|
China-Shenzhen
|
All
|
[ ]
|
$[ ]
|
Palestinian
|
All
|
[ ]
|
$[ ]
|
|
Columbia
|
All
|
[ ]
|
$[ ]
|
Panama
|
All
|
[ ]
|
$[ ]
|
|
Costa Rica
|
All
|
[ ]
|
$[ ]
|
Peru
|
All
|
[ ]
|
$[ ]
|
|
Croatia
|
All
|
[ ]
|
$[ ]
|
Philippines
|
All
|
[ ]
|
$[ ]
|
|
Cyprus
|
All
|
[ ]
|
$[ ]
|
Poland
|
All
|
[ ]
|
$[ ]
|
|
Czech Republic
|
All
|
[ ]
|
$[ ]
|
Portugal
|
All
|
[ ]
|
$[ ]
|
|
Denmark
|
All
|
[ ]
|
$[ ]
|
Qatar
|
All
|
[ ]
|
$[ ]
|
|
EASDAQ
|
All
|
[ ]
|
$[ ]
|
Romania
|
All
|
[ ]
|
$[ ]
|
|
Ecuador
|
All
|
[ ]
|
$[ ]
|
Russia
|
Equities/Bonds
|
[ ]
|
$[ ]
|
|
Egypt
|
All
|
[ ]
|
$[ ]
|
Russia
|
MINFIN
|
[ ]
|
$[ ]
|
|
Estonia
|
All
|
[ ]
|
$[ ]
|
Senegal
|
All
|
[ ]
|
$[ ]
|
|
Euromarkets
|
All
|
[ ]
|
$[ ]
|
Singapore
|
All
|
[ ]
|
$[ ]
|
|
Finland
|
All
|
[ ]
|
$[ ]
|
Slovak Republic
|
All
|
[ ]
|
$[ ]
|
|
France
|
All
|
[ ]
|
$[ ]
|
Slovenia
|
All
|
[ ]
|
$[ ]
|
|
Germany
|
All
|
[ ]
|
$[ ]
|
South Africa
|
All
|
[ ]
|
$[ ]
|
|
Ghana
|
All
|
[ ]
|
$[ ]
|
South Korea
|
All
|
[ ]
|
$[ ]
|
|
Greece
|
All
|
[ ]
|
$[ ]
|
Spain
|
All
|
[ ]
|
$[ ]
|
|
Guinea Bissau
|
All
|
[ ]
|
$[ ]
|
Sri Lanka
|
All
|
[ ]
|
$[ ]
|
|
Hong Kong
|
All
|
[ ]
|
$[ ]
|
Swaziland
|
All
|
[ ]
|
$[ ]
|
|
Hungary
|
All
|
[ ]
|
$[ ]
|
Sweden
|
All
|
[ ]
|
$[ ]
|
|
Iceland
|
All
|
[ ]
|
$[ ]
|
Switzerland
|
All
|
[ ]
|
$[ ]
|
|
India
|
All
|
[ ]
|
$[ ]
|
Taiwan
|
All
|
[ ]
|
$[ ]
|
|
Indonesia
|
All
|
[ ]
|
$[ ]
|
Thailand
|
All
|
[ ]
|
$[ ]
|
|
Ireland
|
All
|
[ ]
|
$[ ]
|
Togo
|
All
|
[ ]
|
$[ ]
|
|
Israel
|
All
|
[ ]
|
$[ ]
|
Trinidad & Tobago
|
All
|
[ ]
|
$[ ]
|
|
Italy
|
All
|
[ ]
|
$[ ]
|
Tunisia
|
All
|
[ ]
|
$[ ]
|
|
Ivory Coast
|
All
|
[ ]
|
$[ ]
|
Turkey
|
All
|
[ ]
|
$[ ]
|
|
Jamaica
|
All
|
[ ]
|
$[ ]
|
United Kingdom
|
All
|
[ ]
|
$[ ]
|
|
Japan
|
All
|
[ ]
|
$[ ]
|
Ukraine
|
All
|
[ ]
|
$[ ]
|
|
Jordan
|
All
|
[ ]
|
$[ ]
|
Uruguay
|
All
|
[ ]
|
$[ ]
|
|
Kazakhstan
|
Equities
|
[ ]
|
$[ ]
|
Venezuela
|
All
|
[ ]
|
$[ ]
|
|
Kazakhstan
|
Bonds
|
[ ]
|
$[ ]
|
Zambia
|
All
|
[ ]
|
$[ ]
|
|
Kenya
|
All
|
[ ]
|
$[ ]
|
Zimbabwe
|
All
|
[ ]
|
$[ ]
|
|
Latvia
|
Equities/Bonds
|
[ ]
|
$[ ]
|
*Any non-Eurobond assets held in CEDEL and Euroclear will be charged
at the local market price quote.
Base Fee
A monthly base charge of $[ ] per account will
apply.
*Any Non-Eurobond assets held in CEDEL and Euroclear will be charged
at the local market price quote.
** All fees quoted are payable monthly
32
EXHIBIT
E
SHAREHOLDER
COMMUNICATIONS ACT AUTHORIZATION
The
Shareholder Communications Act of 1985 requires banks and trust companies to
make an effort to permit direct communication between a company which issues
securities and the shareholder who votes those securities.
Unless
you specifically require us to NOT release your name and address to requesting
companies, we are required by law to disclose your name and
address.
Your
“yes” or “no” to disclosure will apply to all securities U.S. Bank holds for you
now and in the future, unless you change your mind and notify us in
writing.
______
YES
|
U.S.
Bank is authorized to provide the
Trust’s
name, address and security position
to
requesting companies whose stock is
owned
by the Trust.
|
|
___X___
NO
|
U.S.
Bank is NOT authorized to provide the
Trust’s
name, address and security position
to
requesting companies whose stock is
owned
by the Trust.
|
By:
__________________________________
Title:
________________________________
Date:
________________________________
33