CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
XXXXXXX CAPITAL MUTUAL FUND GROUP, INC.
TABLE OF CONTENTS
Description Page
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ARTICLE I - DEFINITIONS........................................................1
ARTICLE II - APPOINTMENT; ACCEPTANCE;
AND FURNISHING OF DOCUMENTS..................................................5
Appointment of Custodian.....................................................5
Acceptance of Custodian......................................................5
Documents to be Furnished....................................................6
Notice of Appointment of Dividend and Transfer Agent.........................6
ARTICLE III - RECEIPT OF CORPORATION ASSETS....................................6
Delivery of Moneys...........................................................6
Delivery of Securities.......................................................6
Payments for Shares..........................................................7
Duties Upon Receipt..........................................................7
Validity of Title............................................................7
ARTICLE IV - DISBURSEMENT OF CORPORATION ASSETS................................7
Declaration of Dividends by Corporation......................................7
Segregation of Redemption Proceeds...........................................8
Disbursements of Custodian...................................................8
Payment of Custodian Fees....................................................9
ARTICLE V - CUSTODY OF CORPORATION ASSETS......................................9
Separate Accounts for Each Fund..............................................9
Segregation of Non-Cash Assets...............................................9
Securities in Bearer and Registered Form....................................10
Duties of Custodian As to Securities........................................10
Certain Actions Upon Written Instructions...................................11
Custodian to Deliver Proxy Materials........................................12
Custodian to Deliver Tender Offer Information...............................12
ARTICLE VI - PURCHASE AND SALE OF SECURITIES..................................13
Purchase of Securities......................................................13
Sale of Securities..........................................................14
Payment on Settlement Date..................................................15
Credit of Moneys Prior to Receipt...........................................15
Segregated Accounts.........................................................15
Advances for Settlement.....................................................17
ARTICLE VII - CORPORATION INDEBTEDNESS........................................18
ARTICLE VIII - CONCERNING THE CUSTODIAN.......................................19
Limitations of Liability of Custodian.......................................19
Actions Not Required By Custodian...........................................20
No Duty to Collect Amounts Due From Dividend and
Transfer Agent.............................................................21
No Enforcement Actions......................................................21
Authority to Use Agents and Sub-Custodians..................................21
No Duty to Supervise Investments............................................22
All Records Confidential....................................................23
Compensation of Custodian...................................................23
Reliance Upon Instructions..................................................23
Books and Records...........................................................24
Internal Accounting Control Systems.........................................24
No Management of Assets By Custodian........................................24
Assistance to Corporation...................................................25
Grant of Security Interest..................................................25
ARTICLE IX - INITIAL TERM; TERMINATION........................................25
Initial Term................................................................25
Termination.................................................................25
Failure to Designate Successor Director.....................................26
ARTICLE X - FORCE MAJEURE.....................................................27
ARTICLE XI - MISCELLANEOUS....................................................28
Designation of Authorized Persons...........................................28
Limitation of Personal Liability............................................28
Authorization By Board......................................................29
Custodian's Consent to Use of Its Name......................................29
Notices to Custodian........................................................29
Notices to Corporation......................................................30
Amendments In Writing.......................................................30
Successors and Assigns......................................................30
Governing Law...............................................................30
Jurisdiction................................................................30
Counterparts................................................................31
Headings....................................................................31
APPENDIX A - Authorized Signatures
APPENDIX B - Series of the Corporation
APPENDIX C - Agents of the Custodian
APPENDIX D - Standards of Service Guide
APPENDIX E - Schedule of Compensation
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the ________ day of
______, 1997, by and between Xxxxxxx Capital Mutual Fund Group, Inc., (the
"Corporation") and Star Bank, National Association, (the "Custodian"), a
national banking association having its principal office at 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx, 00000.
WHEREAS, the Corporation and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Corporation as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Corporation and the Custodian agree as follows:
ARTICLE I
Definitions
-----------
The following words and phrases, when used in this Agreement, unless the
context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended.
1934 Act - the Securities and Exchange Act of 1934, as amended.
Authorized Person - any (i) Officer of the Corporation or (ii) any other
person, whether or not any such person is an officer or employee of the
Corporation, who is duly authorized by the Board of
Directors of the Corporation to give Oral Instructions and Written Instructions
on behalf of the Corporation or any Fund, and named in Appendix A attached
hereto and as amended from time to time by resolution of the Board of Directors,
certified by an Officer, and received by the Custodian.
Board of Directors - the Directors from time to time serving under the
Corporation's Articles of Incorporation, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart O of
Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFT Part 350, or in
such book-entry regulations of federal agencies as are substantially in the form
of Subpart O.
Business Day - any day recognized as a settlement day by The New York Stock
Exchange, Inc. and any other day for which the Corporation computes the net
asset value of Shares of any Fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose trust
company, its successor(s) and its nominee(s). Depository shall include any other
clearing agency registered with the SEC under Section 17A of 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 provided that the Custodian shall
have received a copy of a resolution of the Board of Directors, certified by an
Officer, specifically approving the use of such clearing agency as a depository
for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent appointed,
from time to time, pursuant to a written agreement between the dividend and
transfer agent and the Corporation.
Foreign Securities - a) securities issued and sold primarily outside of the
United States by a foreign government, a national of any foreign country, or a
trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or
guaranteed by the government of the United States, by any state, by any
political subdivision or agency thereof, or by any entity organized under the
laws of the United States or of any state thereof, which have been issued and
sold primarily outside of the United States.
Fund - each series of the Corporation listed in Appendix B and any
additional series added pursuant to Proper Industries. A series is individually
referred to as a "Fund" and collectively referred to as the "Funds."
Money Market Security - 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 agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the 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 and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Corporation.
Oral Instructions - instructions orally transmitted to and received by the
Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Corporation's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock, preferred
stock, options, financial futures, bonds, notes, debentures, corporate debt
securities, mortgages, 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 interest therein, or any similar property or assets that the Custodian
has the facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United States of
America.
Shares - with respect to a Fund, the shares of common stock issued by the
Corporation on account of such Fund.
Corporation - a business corporation organized under the laws of Maryland
which is a open-end management investment company registered under the Act.
Written Instructions - communications in writing actually received by the
Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Directors and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Mutual Fund Custody Department.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
----------------------------------------------------
A. Appointment of Custodian. The Corporation hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Corporation at any time during the term of this Agreement.
B. Acceptance of Custodian. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as hereinafter set
forth.
C. 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 Corporation:
1. A copy of the Articles of Incorporation of the Corporation
certified by the Secretary.
2. A copy of the By-Laws of the Corporation certified by the
Secretary.
3. A copy of the resolution of the Board of Directors of the
Corporation appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the
Corporation setting forth the names and signatures of the current
Officers of the Corporation and other Authorized Persons.
D. Notice of Appointment of Dividend and Transfer Agent. The Corporation
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent.
ARTICLE III
Receipt of Corporation Assets
-----------------------------
A. Delivery of Moneys. During the term of this Agreement, the Corporation
will deliver or cause to be delivered to the Custodian all moneys to be held by
the Custodian for the account of any Fund. The Custodian shall be entitled to
reverse any deposits made on any Fund's behalf where such deposits have been
entered and moneys are not finally collected within 30 days of the making of
such entry.
B. Delivery of Securities. During the term of this Agreement, the
Corporation will deliver or cause to be delivered to the Custodian all
Securities to be held by the Custodian for the account of any Fund. The
Custodian will not have any duties or responsibilities with respect to such
Securities until actually received by the Custodian.
C. Payments for Shares. As and when received, the Custodian shall deposit
to the account(s) of a Fund any and all payments for Shares of that Fund issued
or sold from time to time as they are received from the Corporation's
distributor or Dividend and Transfer Agent or from the Corporation itself.
D. Duties Upon Receipt. The Custodian shall not be responsible for any
Securities, moneys or other assets of any Fund until actually received by it.
E. Validity of Title. 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.
ARTICLE IV
Disbursement of Corporation Assets
----------------------------------
A. Declaration of Dividends by Corporation. The Corporation shall furnish
to the Custodian a copy of the resolution of the Board of Directors of the
Corportion, certified by the Corporation's Secretary, either (i) setting forth
the date of the declaration of any dividend or distribution in respect of Shares
of any Fund of the Corporation, the date of payment thereof, the record date as
of which the 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,
or (ii) authorizing the declaration of dividends and distributions in respect of
Shares of a Fund on a daily basis and authorizing the Custodian to rely on
Written Instructions setting forth the date of the declaration of any such
dividend or distribution, the date of payment thereof, the record date as of
which the 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.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
B. Segregation of Redemption Proceeds. Upon receipt of Proper Instructions
so directing it, the Custodian shall segregate amounts necessary for the payment
of redemption proceeds to be made by the Dividend and Transfer Agent from moneys
held for the account of the Fund so that they are available for such payment.
C. Disbursements of Custodian. Upon receipt of a Certificate directing
payment and setting forth the name and address of the person to whom such
payment is to be made, the amount of such payment, the name of the Fund from
which payment is to be made, and the purpose for which payment is to be made,
the Custodian shall disburse amounts as and when directed from the assets of
that Fund. The Custodian is authorized to rely on such directions and shall be
under no obligation to inquire as to the propriety of such directions.
D. Payment of Custodian Fees. Upon receipt of Written Instructions
directing payment, the Custodian shall disburse moneys from the assets of the
Corporation in payment of the Custodian's fees and expenses as provided in
Article VIII hereof.
ARTICLE V
Custody of Corporation Assets
-----------------------------
A. Separate Accounts for Each Fund. As to each Fund, the Custodian shall
open and maintain a separate bank account or accounts in the United States in
the name of the Corporation coupled with the name of such Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used by
the Fund in accordance with Rule 17f-3 under the Act. Moneys held by the
Custodian on behalf of a Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
B. Segregation of Non-Cash Assets. All Securities and non-cash property
held by the Custodian for the account of a Fund (other than Securities
maintained in a 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.
C. Securities in Bearer and Registered Form. All Securities held which are
issued or issuable only in bearer form, shall be held by the Custodian in that
form; all other Securities held for the Fund may be registered in the name of
the Custodian, any sub-custodian appointed in accordance with this Agreement, or
the nominee of any of them. The Corporation agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold, or deliver in proper
form for transfer, any Securities that it may hold for the account of any Fund
and which may, from time to time, be registered in the name of a Fund.
D. Duties of Custodian As to Securities. Unless otherwise instructed by the
Corporation, with respect to all Securities held for the Corporation, the
Custodian shall on a timely basis (concerning items 1 and 2 below, as defined in
the Custodian's Standards of Service Guide, as amended from time to time,
annexed hereto as Appendix D):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect amounts payable upon all
Securities which may mature or be called, redeemed, or retired, or
otherwise become payable;
3.) Surrender interim receipts or Securities in temporary form
for Securities in definitive form; and
4.) 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.
E. Certain Actions Upon Written Instructions. Upon receipt of a Written
Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as may be designated in
such Written Instructions proxies, consents, authorizations, and any
other instruments whereby the authority of the Corporation as
beneficial owner of any Securities may be exercised;
2.) Deliver any Securities in exchange for other Securities or
cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation, or
recapitalization of any trust, or the exercise of any conversion
privilege;
3.) Deliver any Securities to any protective committee,
reorganization committee, or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization,
or sale of assets of any trust, 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;
4.) Make such transfers or exchanges of the assets of any Fund
and take such other steps as shall be stated in the Written
Instructions to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Corporation; and
5.) Deliver any Securities held for any Fund to the depository
agent for tender or other similar offers.
F. Custodian to Deliver Proxy Materials. 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 any 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 Written
Instructions.
G. Custodian to Deliver Tender Offer Information. The Custodian shall
promptly deliver to the Corporation all information received by the Custodian
and pertaining to Securities held by any Fund with respect to tender or exchange
offers, calls for redemption or purchase, or expiration of rights. If the
Corporation desires to take action with respect to any tender offer, exchange
offer or other similar transaction, the Corporation shall notify the Custodian
at least five Business Days prior to the date on which the Custodian is to take
such action. The Corporation will provide or cause to be provided to the
Custodian all relevant information for any Security which has unique put/option
provisions at least five Business Days prior to the beginning date of the tender
period.
ARTICLE VI
Purchase and Sale of Securities
-------------------------------
A. Purchase of Securities. Promptly after each purchase of Securities by
the Corporation, the Corporation shall deliver to the Custodian (i) with respect
to each purchase of Securities which are not Money Market Securities, Written
Instructions, and (ii) with respect to each purchase of Money Market Securities,
Proper Instructions, specifying with respect to each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and accrued
interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through which,
the purchase was made,
7.) the name of the person to whom such amount is payable, and
8.) the Fund for which the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Corporation, pay out of the moneys held for the account of such Fund the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable, 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 a
Fund, if in the
relevant Fund custody account there is insufficient cash available to the Fund
for which such purchase was made.
B. Sale of Securities. Promptly after each sale of Securities by a Fund,
the Corporation shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions, and (ii)
with respect to each sale of Money Market Securities, Proper Instructions,
specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued
interest, if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which, the
sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made.
The Custodian shall deliver the Securities against receipt of the total amount
specified in the Written Instructions, or Oral Instructions, if applicable.
Notwithstanding any other provision of this Agreement, the Custodian, when
properly instructed as provided herein 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, the
Fund for which the Securities were delivered shall bear the risk that final
payment for the Securities may not be made or that the 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 of the
foregoing.
C. Payment on Settlement Date. On contractual settlement date, the account
of the Fund will be charged for all purchased Securities settling on that day,
regardless of whether or not delivery is made. Likewise, on contractual
settlement date, proceeds from the sale of Securities settling that day will be
credited to the account of the Fund, irrespective of delivery. Any such credit
shall be conditioned upon actual receipt by Custodian of final payment and may
be reversed if final payment is not actually received in full.
D. Credit of Moneys Prior to Receipt. With respect to any credit given
prior to actual receipt of final payment, the Custodian may, in its sole
discretion and from time to time, permit a Fund to use funds so credited to its
Fund custody account in anticipation of actual receipt of final payment. Any
such funds shall be deemed a loan from the Custodian to the Corporation payable
on demand and bearing interest accruing from the date such loan is made up to
but not including the date on which such loan is repaid at the rate per annum
customarily charged by the Custodian on similar loans.
E. Segregated Accounts. The Custodian shall, upon receipt of Proper
Instructions so directing it, establish and maintain a segregated account or
accounts for and on behalf of a Fund. Cash and/or Securities may be transferred
into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among the
Corporation, the Custodian, and a broker-dealer registered under the
1934 Act, and also a member of the NASD (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, the Commodity Futures
Trading Commission, any registered contract market, or any similar
organization or organizations requiring escrow or other similar
arrangements in connection with transactions by the Fund;
2.) for purposes of segregating cash or Securities in connection
with options purchased, sold, or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund;
3.) for the purpose of compliance by the Fund with the procedures
required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, and short sales by Act
Release No. 10666, or any subsequent release or releases or rule of
the SEC relating to the maintenance of segregated accounts by
registered investment companies;
4.) for the purpose of segregating collateral for loans of
Securities made by the Fund; and
5.) for other proper corporate purposes, but only upon receipt
of, in addition to Proper Instructions, a copy of a resolution of the
Board of Directors, certified by an Officer, setting forth the
purposes of such segregated account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
F. Advances for Settlement. Except as otherwise may be agreed upon by the
parties hereto, the Custodian shall not be required to comply with any Written
Instructions to settle the purchase of any Securities on behalf of a Fund unless
there is sufficient cash in the account(s) pertaining to such Fund at the time
or to settle the sale of any Securities from such an account(s) unless such
Securities are in deliverable form. Notwithstanding the foregoing, if the
purchase price of such Securities exceeds the amount of cash in the account(s)
at the time of such purchase, the Custodian may, in its sole discretion, advance
the amount of the difference in order to settle the purchase of such Securities.
The amount of any such advance shall be deemed a loan from the Custodian to the
Corporation payable on demand and bearing interest accruing from the date such
loan is made up to but not including the date such loan is repaid at the rate
per annum customarily charged by the Custodian on similar loans.
ARTICLE VII
Corporation Indebtedness
------------------------
In connection with any borrowings by the Corporation, the Corporation will
cause to be delivered to the Custodian by a bank or broker requiring Securities
as collateral for such borrowings (including the Custodian if the borrowing is
from the Custodian), a notice or undertaking in the form currently employed by
such bank or broker setting forth the amount of collateral. The Corporation
shall promptly deliver to the Custodian Written Instructions 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, or a
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 Corporation on the borrowing date, and (f) the
description of the Securities securing the loan, including the name of the
issuer, the title and the number of shares or other units or the principal
amount. The Custodian shall deliver on the borrowing date specified in the
Written Instructions the required collateral against the lender's delivery of
the total loan amount then payable, provided that the same conforms to that
which is described in the Written Instructions. The Custodian shall deliver, in
the manner directed by the Corporation, such Securities as additional
collateral, as may be specified in Written Instructions, to secure further any
transaction described in this Article VII. 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.
The Custodian may, at the option of the lender, keep such collateral in its
possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require
such reasonable conditions regarding such collateral and its dealings with
third-party lenders as it may deem appropriate.
ARTICLE VIII
Concerning the Custodian
------------------------
A. Limitations on Liability of Custodian. Except as otherwise provided
herein, the Custodian shall not be liable for any loss or damage resulting from
its action or omission to act or otherwise, except for any such loss or damage
arising out of its own gross negligence or willful misconduct. The Corporation
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 hereunder or any other action or inaction
of the Corporation or its Directors, officers, employees or agents, except such
as may arise from the grossly negligent action or omission, willful misconduct
or breach of this Agreement by the Custodian. The Custodian shall be entitled to
rely on and may act upon the advice and opinion of counsel on all matters, at
the expense of the Corporation, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice or opinion of counsel. The
provisions under this paragraph shall survive the termination of this Agreement.
B. Actions Not Required By Custodian. 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:
1.) The validity of the issue of any Securities purchased by or
for the account of any Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for the
account of any Fund, or the propriety of the amount for which the same
are sold;
3.) The legality of the issue or sale of any Shares of any Fund,
or the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any Shares of any Fund, or
the propriety of the amount to be paid therefor;
5.) The legality of the declaration or payment of any dividend by
the Corporation in respect of Shares of any Fund;
6.) The legality of any borrowing by the Corporation on behalf of
the Corporation or any Fund, using Securities as collateral;
7.) Whether the Corporation or a Fund is in compliance with the
1940 Act, the regulations thereunder, the provisions of the
Corporation's charter documents or by-laws, or its investment
objectives and policies as then in effect.
C. No Duty to Collect Amounts Due From Dividend and Transfer Agent. The
Custodian shall not be under any duty or obligation to take action to effect
collection of any amount due to the Corporation from any Dividend and Transfer
Agent of the Corporation nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Corporation of any
amount paid by the Custodian to any Dividend and Transfer Agent of the
Corporation in accordance with this Agreement.
D. No Enforcement Actions. Notwithstanding Section D of Article V, the
Custodian shall not be under any duty or obligation to take action, by legal
means or otherwise, 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 Written Instructions and (ii) it shall be assured to its satisfaction
(including prepayment thereof) of reimbursement of its costs and expenses in
connection with any such action.
E. Authority to Use Agents and Sub-Custodians. The Corporation acknowledges
and hereby authorizes the Custodian to hold Securities through its various
agents described in Appendix C annexed hereto. The Fund hereby represents that
such authorization has been duly approved by the Board of Directors of the
Corporation as required by the Act.
In addition, the Corporation acknowledges that the Custodian may appoint
one or more financial institutions, as agent or agents or as sub-custodian or
sub-custodians, including, but not limited to, banking institutions located in
foreign countries, for the purpose of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or activities
of such agents or sub-custodians. Any such agent or sub-custodian shall be
qualified to serve as such for assets of investment companies registered under
the Act. The Funds shall reimburse the Custodian for all costs incurred by the
Custodian in connection with opening accounts with any such agents or
sub-custodians. Upon request, the Custodian shall promptly forward to the
Corporation any documents
it receives from any agent or sub-custodian appointed hereunder which may assist
trustees of registered investment companies to fulfill their responsibilities
under Rule 17f-5 of the Act.
F. No Duty to Supervise Investments. 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 Trust are such as properly may be held by
the Corporation under the provisions of the Articles of Incorporation and the
Corporation's By-Laws.
G. All Records Confidential. The Custodian shall treat all records and
other information relating to the Corporation and the assets of all Funds as
confidential and shall not disclose any such records or information to any other
person unless (i) the Corporation shall have consented thereto in writing or
(ii) such disclosure is required by law.
H. Compensation of Custodian. The Custodian shall be entitled to receive
and the Corporation agrees to pay to the Custodian such compensation as shall be
determined pursuant to Appendix E attached hereto, or as shall be determined
pursuant to amendments to Appendix E. The Custodian shall be entitled to charge
against any money held by it for the account of any Fund, the amount of any of
its fees, any loss, damage, liability or expense, including counsel fees. The
expenses which the Custodian may charge against the account of a Fund include,
but are not limited to, the expenses of agents or sub-custodians incurred in
settling transactions involving the purchase and sale of Securities of the Fund.
I. Reliance Upon Instructions. The Custodian shall be entitled to rely upon
any Proper Instructions. The Corporation agrees to forward to the Custodian
Written Instructions confirming Oral Instructions in such a manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex, facsimile or otherwise, on the same Business Day
on which such Oral Instructions were given. The Corporation agrees that the
failure of the Custodian to receive such confirming instructions 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 Corporation for acting upon Oral Instructions
given to the Custodian hereunder concerning such transactions.
J. Books and Records. The Custodian will (i) 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 Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Corporation, and (ii) preserve for the periods prescribed by applicable
Federal statute or regulation all records required to be so preserved. All such
books and records shall be the property of the Corporation, and shall be
available, upon request, for inspection by duly authorized officers, employees
or agents of the Corporation and employees of the SEC.
K. Internal Accounting Control Systems. The Custodian shall send to the
Corporation any report received on the systems of internal accounting control of
the Custodian, or its agents or sub-custodians, as the Corporation may
reasonably request from time to time.
L. No Management of Assets By Custodian. The Custodian performs only the
services of a custodian and shall have no responsibility for the management,
investment or reinvestment of the Securities or other assets from time to time
owned by any Fund. The Custodian is not a selling agent for Shares of any Fund
and performance of its duties as custodian shall not be deemed to be a
recommendation to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever except
such
duties and obligations as are specifically set forth in this Agreement, and no
covenant or obligation shall be implied in this Agreement against the Custodian.
M. Assistance to Corporation. The Custodian shall take all reasonable
action, that the Corporation may from time to time request, to assist the
Corporation in obtaining favorable opinions from the Corporation's independent
accountants, with respect to the Custodian's activities hereunder, in connection
with the preparation of the Fund's Form N- IA, Form N-SAR, or other annual
reports to the SEC.
X. Xxxxx of Security Interest. The Corporation hereby pledges to and grants
the Custodian a security interest in the assets of any Fund to secure the
payment of any liabilities of the Corporation to the Custodian, whether acting
in its capacity as Custodian or otherwise, or on account of money borrowed from
the Custodian. This pledge is in addition to any other pledge of collateral by
the Corporation to the Custodian.
ARTICLE IX
Initial Term; Termination
-------------------------
A. Initial Term. This Agreement shall become effective as of its execution
and shall continue in full force and effect until terminated as hereinafter
provided.
B. Termination. Either party hereto may terminate this Agreement after the
Initial Term 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, it shall be accompanied by a copy of a resolution of the Board
of Directors of the Corporation, certified by the Secretary of the Corporation,
electing to terminate this Agreement and designating a successor custodian or
custodians. 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 the Board of Directors of the Corporation, certified by the
Secretary, designating a successor custodian or custodians to act on behalf of
the Corporation. 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 $100,000,000 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 moneys 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 Corporation such compensation as may
be due as of the date of such termination. The Corporation agrees on behalf of
the Corporation that the Custodian shall be reimbursed for its reasonable costs
in connection with the termination of this Agreement.
C. Failure to Designate Successor Director. If a successor custodian is not
designated by the Corporation, 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 moneys then owned by the Corporation, be
deemed to be the custodian for the Corporation, 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, which shall be held by the Custodian in
accordance with this Agreement.
ARTICLE X
Force Majeure
-------------
Neither the Custodian nor the Corporation 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; 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 the Custodian, in the event of a failure
or delay, shall use its best efforts to ameliorate the effects of any such
failure or delay.
ARTICLE XI
Miscellaneous
-------------
A. Designation of Authorized Persons. Appendix A sets forth the names and
the signatures of all Authorized Persons as of this date, as certified by the
Secretary of the Corporation. The Corporation agrees to furnish to the Custodian
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 then current Authorized Persons as
set forth in the last delivered Appendix A.
B. Limitation of Personal Liability. 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 by 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 the Corporation, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the organizers, shareholders,
officers, or director of the Corporation or of any predecessor or successor, or
any of them as such. To the extent that any such liability exists, it is hereby
expressly waived and released by the Custodian as a condition of, and as a
consideration for, the execution of this Agreement.
C. Authorization By Board. The obligations set forth in this Agreement as
having been made by the Corporation have been made by the Board of Directors,
acting as such Directors for and on behalf of the Corporation, 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.
D. Custodian's Consent to Use of Its Name. The Corporation shall review
with the Custodian all provisions of the Prospectus and any other documents
(including advertising
material) specifically mentioning the Custodian (other than merely by name and
address) and shall obtain the Custodian's consent prior to the publication
and/or dissemination or distribution thereof.
E. Notices to Custodian. 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, X. X. 0000, Xxxxxxxxxx,
Xxxx 00000, attention Mutual Fund Custody Department, or at such other place as
the Custodian may from time to time designate in writing.
F. Notices to Corporation. 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 X. 00xx Xx. Xxx Xxxx, XX
00000 or at such other place as the Corporation may from time to time designate
in writing.
G. Amendments In Writing. This Agreement, with the exception of the
Appendices, 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.
H. Successors and Assigns. 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.
I. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
J. Jurisdiction. Any legal action, suit or proceeding to be instituted by
either party with respect to this Agreement shall be brought by such party
exclusively in the courts of the State of Ohio or in the courts of the United
States for the Southern District of Ohio, and each party, by its execution of
this Agreement, irrevocably (i) submits to such jurisdiction and (ii) consents
to the service of any process or pleadings by first class U.S. mail, postage
prepaid and return receipt requested, or by any other means from time to time
authorized by the laws of such jurisdiction.
K. Counterparts. 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.
L. Headings. The headings of paragraphs in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
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: TRUST: Xxxxxxx Capital Mutual Fund Group, Inc.
By:________________________
Title:_______________________
ATTEST: CUSTODIAN:
Star Bank, N.A.
By:_________________________
Title:_______________________
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
President: __________________ ___________________
Vice President: __________________ ___________________
Secretary: __________________ ___________________
Treasurer: __________________ ___________________
Assistant
Treasurer: __________________ ___________________
Adviser Employees: __________________ ___________________
APPENDIX A Continued
Authorized Persons Specimen Signatures
------------------ -------------------
Transfer Agent/Fund Accountant
Employees: __________________ ___________________
__________________ ___________________
__________________ ___________________
__________________ ___________________
* Authority restricted; does not include:_____________________________________
_______________________________________________________________________________
APPENDIX B
Series of the Corporation
Xxxxxxx Fund
Xxxxxxx Fledgling Fund
APPENDIX C
Agents of the Custodian
The following agents 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
(For Foreign Securities and certain non-DTC eligible Securities)
APPENDIX D
Standards of Service Guide
