EXHIBIT 9
Custodian agreement and depository
contract with Crestar Bank N.A.
CRESTAR BANK, N.A.
CUSTODY SERVICE AGREEMENT
AGREEMENT, dated this 1st day of May , 1996, between XXXXXXXX
ASSOCIATED FUND (the "Owner") and CRESTAR BANK, N.A. a national banking
institute (the "Bank").
In consideration of the mutual promises and agreements contained herein,
the parties agree as follows:
A. BANK'S OBLIGATIONS:
1. SAFEKEEPING OF SECURITIES
a. The Bank shall accept the Owner's securities from time to time
upon instructions described in Paragraph C-3 below;
b. The Bank shall hold, register or dispose of the Owner's
securities from time to time upon instructions described in
Paragraph C-3 below;
c. The Bank shall periodically provide to the Owner a report of
holdings and transaction notices.
d. For the purpose of audits by agents of the Owner or the Bank or
as required by regulatory authorities, the Bank shall verify the
Owner's holdings as of a specified date.
2. COLLECTION OF PRINCIPAL AND INCOME
a. The Bank shall collect and credit principal, interest and other
income to the Owner's custody account with the Bank on payable
date unless specified otherwise on Attachment A attached hereto;
b. Notwithstanding the foregoing, all payments of principal or
income are credited to the Owner's account subject to final
collection and charge back, if subsequently dishonored;
c. The Bank shall use its best efforts to collect securities and
other property at maturity and at dates of call for payment, but
assumes no responsibility for its failure to do so, except for
losses resulting from its gross negligence or willful misconduct.
The Bank shall not be obligated to institute or participate in
any legal proceedings related to collection of securities or
property.
3. CORPORATE ACTIONS
a. The Bank shall notify the Owner of all corporate actions of which
the Bank has actual knowledge and act upon instructions described
in Paragraph C-3 below for redemption, tender offer, warrant,
subscription right, merger, consolidation, reorganization or
recapitalization, or any similar corporate action affecting the
securities;
b. For purposes of this Agreement, the Bank shall be deemed to have
actual knowledge only of actions of which it receives notice from
the Owner or its agent, the issuer or its agent, or as published
in the sources the Bank, in its sole discretion, deems advisable
to review from time to time. Notwithstanding the foregoing, the
Bank shall be deemed to have actual knowledge of a put only if it
receives written notice of the put from the Owner or its agent no
earlier than 30 days and no later than 5 days prior to the
expiration of the window period;
c. The Bank, when providing notice of such corporate actions to the
Owner, shall state the Bank's action deadline required to meet
any deadlines established by the issuer of the securities, and
the Bank shall have no duty to act with respect to such corporate
actions unless it has full and timely actual knowledge and
receives written instruction from the Owner, both in time to act
before the action deadline set by the Bank;
d. Funds or assets resulting from any corporate action will be
credited on a timely basis upon receipt by the Bank.
4. PROXY MATERIALS
a. The Bank shall forward, or have its agent forward, to the Owner
all properly-executed proxies, proxy-soliciting materials and
annual reports with respect to securities in the Owner's
safekeeping account;
b. Notwithstanding the foregoing, the Bank shall have no duty to
forward such materials if the Owner permits the company issuing
such securities to forward such materials to the Owner;
c. The Bank shall have no responsibility to vote any proxies with
respect to any securities in the Owner's Custody Service Account.
5. DELIVERY/RECEIPT OF SECURITIES
a. The Bank shall receive or deliver securities, either with or
without payment, upon the Owner's instructions as described in
Paragraph C-3 below;
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b. The Bank shall notify the Bank's agent to accept the receipt or
delivery if the transaction so requires;
c. Upon theoretical settlement date, the Bank shall record the
credit or debit in the Owner's Custody Service Account. If there
are insufficient funds in the Owner's Custody Service Account to
settle purchases, thereby creating an overdraft, the Account will
be subject to additional charges by the Bank;
d. The Bank shall exchange temporary certificates for definitive
certificates when appropriate.
6. SIGNING AUTHORITY
a. The Bank shall execute on behalf of the Owner any declaration,
affidavit, certificate of ownership or other documents required
with respect to coupons, registered interest, dividends or other
income, and any endorsement, assignment or other instrument of
transfer of securities or other document that disposes of
property in the Owner's Custody Service Account, in accordance
with the Owner's instructions as described in Paragraph C-3
below;
b. Such execution shall include, but not be limited to, signing such
documents as attorney-in-fact for the Owner or signing the
Owner's name and guaranteeing the signature in the Bank's name;
c. The Bank shall supply the Owner's taxpayer identification number
upon request.
7. CASH REINVESTMENT
a. The Bank shall provide automatic reinvestment of daily cash
balances above $1.00;
b. Such investments shall be in money market funds or short-term
investments from the list of such investments maintained by the
Bank and selected by the Owner;
c. After paying all commissions or expenses chargeable to such
investments, including but not limited to the Bank's sweep fee,
the Bank shall collect and remit the net income therefrom as
provided in Paragraph A-2 above.
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B. OWNER'S OBLIGATION:
1. PURCHASES AND SALES
a. The Owner shall initiate, or have its agent initiate, all
purchases, sales or transfers of securities held hereunder,
2. INSTRUCTIONS TO BANK
a. The Owner shall issue, or have its agent issue, to the Bank
instructions in accordance with the Bank's delivery instructions
as described in Paragraph C-3 below for delivery, registration or
transfer of securities, or for action upon any redemption, tender
offer, call, warrant, subscription right, merger, consolidation,
reorganization, recapitalization or any similar corporate action
affecting the securities;
b. The Owner agrees to instruct the Bank regarding corporate
actions, including but not limited to puts, of which the Bank
does not have actual knowledge as defined in Xxxxxxxxx X-0 above
and of which Owner or its agent has or reasonably should have
knowledge;
c. Any instructions requiring the Bank to act shall be delivered to
the Bank no later than 11:00 a.m. on the date action is to be
taken as requested by the Owner;
d. The Owner shall indemnify and hold the Bank harmless for all
losses, claims, actions and expenses resulting from failure to so
inform the Bank, regardless of whether the Bank attempts to honor
instructions given by the Owner after the deadline stated above.
3. BANK COMPENSATION
a. The Owner shall compensate the Bank for its custody services in
accordance with the Bank's published fee schedule in effect at
the time such services are rendered;
b. If any security transaction for the Owner's Custody Service
Account is negotiated through the Bank's investment or brokerage
department or separate subsidiary, such department or subsidiary
shall be entitled to charge the Owner an amount equal to the
usual commission for such transaction, in addition to the Bank's
fee for custody services hereunder.
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4. INDEMNITY
a. The Owner shall reimburse, indemnify and hold the Bank harmless
for and from any liability, loss, claim, damage or expense that
may arise or to which the Bank may be subjected by reason of (i)
execution of documents referred to in Paragraph A-6 above, (ii)
following any instructions given by the Owner as described in
Paragraph C-3 below, (iii) complying with any state or federal
law or regulation or (iv) failure of the Owner to assume its or
its agents' obligations hereunder, but not for any loss or
liability due to the Bank's own negligence.
5. INVESTMENT ADVISOR
a. If desired, the Owner shall designate an investment advisor by
completing Attachment B hereto;
b. The Owner shall inform any investment advisor or investment
manager acting for the Owner of the duties of the parties hereto.
6. SECURITIES' CONFIRMATION AND COMMUNICATIONS
a. The Owner understands and acknowledges that federal regulations
require the Bank to (i) provide the Owner with confirmations of
security transactions at no additional cost within five business
days after receipt by the Bank unless the Bank is released from
this obligation by the Owner and (ii) disclose the Owner's name,
address and share position to companies issuing securities held
in the account unless the Owner objects in writing to such
disclosure;
b. Until further written notice to the Bank, the Owner does not
(i) request security confirmations more frequently than provided
by the Bank in the Owner's periodic account statement, and
(ii) authorize release of the Owner's account information to
companies issuing securities in its account.
C. GENERAL PROVISIONS:
1. LIABILITY
a. The Bank assumes no obligation to review the securities and other
property at any time held in the Owner's Custody Service Account,
or to advise or recommend to the Owner the purchase, retention,
sale, exchange or deposit, in reorganization or otherwise, of any
securities or other property held pursuant to this Agreement;
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b. The Bank shall not be liable or responsible for or on account of
any act or omission of any broker or other agent designated by
the Owner;
c. Notwithstanding anything herein to the contrary, the Bank shall
have no liability to the Owner or any third party for special,
indirect or consequential damages, including lost profits or loss
of business, incurred as a result of the Bank's action or failure
to act under this Agreement.
2. REGISTRATION AND LOCATION OF SECURITIES
a. All securities held by the Bank under this Agreement may be
registered and held in the name of the Bank or its agent, or the
nominee name of either;
b. The Bank, in its discretion, is hereby authorized to maintain
portions of the securities in a correspondent bank or banks;
c. The Bank will be responsible for the safekeeping of all
securities registered in nominee or bearer form and held by other
banking institutions at the Bank's request;
d. The Bank is further authorized to use the Federal Reserve book-
entry system and the facilities of a qualified central depository
for all or any portion of the Owner's securities;
e. Notwithstanding anything herein to the contrary, at all times the
Owner shall remain beneficial owner of the securities, and the
securities shall be held separate and apart from the Bank's own
assets.
3. AUTHORIZED REPRESENTATIVES
a. The Bank may act under this Agreement, without liability, upon
written instructions given by an authorized representative
designated on Attachment C or any amendment thereto, or upon oral
instructions received by the Bank from an individual purporting
to be an authorized representative of the Owner, without further
confirmation of the sender's identity or authority;
b. The Owner assumes all risk and responsibility for any action
taken by the Bank in good faith reliance on such instructions,
including the obligation to institute and participate in any
related legal proceeding. Not withstanding the above owner
assumes and shall have no responsibility for any negligent action
taken by the Bank or its agents.
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4. AMENDMENT AND TERMINATION
a. This Agreement may be amended in writing at any time as mutually
agreed upon by the parties and may be terminated upon thirty
days' prior written notice by either party;
b. Upon termination, all assets held under this Agreement shall be
delivered as the Owner designates in writing; provided all fees
and expenses due the Bank shall have been paid to it, and the
Owner or the Owner's agent shall have executed a receipt for
delivery of the Owner's assets.
5. SITUS AND ENFORCEABILITY
a. This Agreement and its attachments constitutes the entire
Agreement between the parties, shall be binding on and inure to
the benefit of the successors of each party, shall be governed by
Virginia law and may be executed in more than one counterpart,
each of which shall be deemed to be an original;
b. The parties acknowledge that all corporate action necessary to
enter into this Agreement has been duly taken;
c. No failure or delay by either party hereunder shall operate as a
waiver of a right, power or privilege, nor shall any single or
partial exercise of such right, power or privilege;
d. The finding that any provision of this Agreement is void or
unenforceable shall not affect the validity or enforceability of
the remaining provisions hereof.
6. NOTICES
a. All notices shall be given by personal delivery or by first class
mail, to the Owner's address of record least on file with the
Bank or to the Bank's last known address, as the case may be.
7. ADDITIONAL SERVICES
a. If, at any time during the term of this Agreement, a separate
agreement related to the Owner's Custody Service Account is
executed by the Bank and the Owner, including but not limited to
a Securities Lending Agreement and an On-Line Access Agreement,
such agreement shall become an attachment hereto and shall
thereafter be deemed to be incorporated herein by reference;
b. To the extent this Agreement may contain provisions that conflict
with the provisions of the incorporated agreement, the
incorporated agreement shall be controlling.
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8. ASSIGNABILITY
a. This Agreement shall not be assigned or transferred by either
party without the prior written consent of the other party,
except that either party may assign its rights, duties and
obligations hereunder without such consent to any parent,
subsidiary or affiliate corporation.
WITNESS the following signatures:
CRESTAR BANK, N.A.
By: /s/------------------------
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Date: April 11, 1996
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XXXXXXXX ASSOCIATED FUND
By: /s/ Xxx Xxxxxxx
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Title: Treasurer
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Date: April 11, 1996
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ATTACHMENT A
SCHEDULE OF INCOME COLLECTION
The following sets forth the responsibilities of the Bank to the Owner with
respect to the collection and crediting of income accrued and paid on the
Securities.
All income accrued and paid on Securities of Owner will be credited, except as
noted below, to the Custody Service Account on payable date. The following
exceptions are agreed:
a. All mortgage-backed securities credited on payable date plus two (2)
days.
b. All floating rate obligations credited on receipt date plus two (2)
days.
c. All income on private placements credited on receipt date plus one (1)
day.
d. All income on receivable backed issues credited on receipt plus two
(2) days.
SCHEDULE OF PRINCIPAL COLLECTION
The following sets forth the responsibilities of the Bank to the Owner with
respect to the collection and crediting of principal of called, tendered, or
matured securities:
a. Proceeds of matured and called securities will be credited on payable
date.
b. Proceeds of tendered (put) securities will be credited on receipt date
plus two (2) days.
c. Proceeds of periodic payments of mortgage-backed securities will be
credited on payable date plus two (2) days.
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ATTACHMENT B
INVESTMENT ADVISOR DESIGNATION
In accordance with Paragraph B-5 of the Custody Service Agreement dated
______________ 19__, the Owner hereby appoints________________________ and
________________________ as the authorized Investment Advisors for the
Owner's Custody Service Account. This appointment will allow representatives
of the advisor to act as designated agents for the Owner until their authority
is rescinded in writing.
XXXXXXXX ASSOCIATED FUND
By:
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Title:
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Date:
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ATTACHMENT C
AUTHORIZED REPRESENTATIVES
In accordance with Paragraph C-3 of the attached Custody Service Agreement
dated April 11 , 1996, we as individual owners, or as authorized officers of
the corporate owner of securities, hereby appoint the following individuals
as our designated representatives and authorize each of them to give
directions to Crestar Bank, N.A. regarding the Owner's assets, and to receive
information on our behalf:
Xxxxxxx X. Xxxxxxxx
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Xxx Xxxxxxx
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E. Xxxx Xxxxxxx
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Xxxxxxxx X. Xxxxxx
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Crestar Bank, N.A. is authorized to accept directions from and provide
information to any of these persons with respect to our account until we notify
the Bank in writing to the contrary.
XXXXXXXX ASSOCIATED FUND
By: /s/ Xxx Xxxxxxx
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Title: Treasurer
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Date: April 11, 1996
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