Exhibit 8
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the ____, 1997,
by and between AdvisorOne Funds (the "Trust") and Star Bank, National
Association, (the "Custodian"), a national banking association
having its principal office at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, 00000.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Trust as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Trust 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 Trust or (ii) any other
person, whether or not any such person is an officer or employee of the Trust,
who is duly authorized by the Board of Trustees of the Trust to give Oral
Instructions and Written Instructions on behalf of the Trust or any Fund, and
named in Appendix A attached hereto and as amended from time to time by
resolution of the Board of Trustees, certified by an Officer, and received
by the Custodian.
Board of Trustees - the Trustees from time to time serving under the
Trust's Agreement and Declaration of Trust, 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 Trust 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
Trustees, 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 Trust.
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 Trust 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 Trust.
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 Trust'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 units of beneficial interest
issued by the Trust on account of such Fund.
Trust - the AdvisorOne Funds, a business trust organized under the
laws of Massachusetts 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
Trustee 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 Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Trust 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 Trust:
1. A copy of the Articles of Incorporation of the Trust
certified by the Secretary.
2. A copy of the By-Laws of the Trust certified by the
Secretary.
3. A copy of the resolution of the Board of Trustees of
the Trust 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
Trust setting forth the names and signatures of the current Officers of the
Trust and other Authorized Persons.
D. Notice of Appointment of Dividend and Transfer Agent. The
Trust 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 TRUST ASSETS
A. Delivery of Moneys. During the term of this Agreement, the Trust
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
Trust 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 Trust's
distributor or Dividend and Transfer Agent or from the Trust 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 TRUST ASSETS
A. Declaration of Dividends by Trust. The Trust shall furnish to the
Custodian a copy of the resolution of the Board of Trustees of the Trust,
certified by the Trust'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 Trust, 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
Trust in payment of the Custodian's fees and expenses as provided in Article
VIII hereof.
ARTICLE V
CUSTODY OF TRUST 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 Trust 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 Trust 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 Trust, with respect to all Securities held for the Trust, 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 Trust 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 Trust; 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 Trust 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 Trust 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
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
five 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 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 Trust, the Trust 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
Trust, 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 Trust 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 Trust 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 Trust, 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
Trustees, 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 Trust 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
TRUST INDEBTEDNESS
In connection with any borrowings by the Trust, the Trust 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 Trust 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 Trust, 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 Trust 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 Trust, such Securities as additional collateral, as may be specified in
Written Instructions, to secure further any transaction described in this
Article VII. The Trust 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
Trust 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 Trust's duties hereunder or any other action or
inaction of the Trust or its Trustees, 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 Trust, 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 Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on behalf of
the Trust or any Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is in compliance with the 1940
Act, the regulations thereunder, the provisions of the
Trust'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 Trust from any Dividend and
Transfer Agent of the Trust nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Trust of any amount
paid by the Custodian to any Dividend and Transfer Agent of the Trust 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 Trust 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 Trustees of the
Trust as required by the Act.
In addition, the Trust 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 Trust 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 Trust under the provisions of the Articles of Incorporation
and the Trust's By-Laws.
G. All Records Confidential. The Custodian shall treat all
records and other information relating to the Trust and the assets of all
Funds as confidential and shall not disclose any such records or information
to any other person unless (i) the Trust 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 Trust 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 Trust 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 Trust 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 Trust. The Trust agrees that the Custodian shall incur no
liability to the Trust 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 Trust, 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 Trust, and
shall be available, upon request, for inspection by duly authorized officers,
employees or agents of the Trust and employees of the SEC.
K. Internal Accounting Control Systems. The Custodian shall send to the
Trust any report received on the systems of internal accounting control of the
Custodian, or its agents or sub-custodians, as the Trust 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 Trust. The Custodian shall take all reasonable
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust'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 Trust 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 Trust 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 Trust 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 Trust, it shall be accompanied by a copy of a resolution of the
Board of Trustees of the Trust, certified by the Secretary of the Trust,
electing to terminate this Agreement and designating a successor custodian or
custodians. In the event such notice is given by the Custodian, the Trust
shall, on or before the termination date, deliver to the Custodian a copy of a
resolution of the Board of Trustees of the Trust, certified by the Secretary,
designating a successor custodian or custodians to act on behalf of the Trust.
In the absence of such designation by the Trust, 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 Trust shall pay to the
Custodian on behalf of the Trust such compensation as may be due as of the
date of such termination. The Trust agrees on behalf of the Trust that the
Custodian shall be reimbursed for its reasonable costs in connection with the
termination of this Agreement.
C. Failure to Designate Successor Trustee. If a successor custodian is
not designated by the Trust, or by the Custodian in accordance with the
preceding paragraph, or the designated successor cannot or will not serve, the
Trust shall, upon the delivery by the Custodian to the Trust of all Securities
(other than Securities held in the Book-Entry System which cannot be delivered
to the Trust) and moneys then owned by the Trust, be deemed to be the
custodian for the Trust, 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 Trust, which shall be held by the Custodian in accordance
with this Agreement.
ARTICLE X
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; 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 Trust. The Trust 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, trustee, past, present or future as such, of
the Trust or of any predecessor or successor, either directly or through the
Trust 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 Trust, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the organizers, shareholders, officers, or
trustees of the Trust 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 Trust have been made by the Board of Trustees,
acting as such Trustees for and on behalf of the Trust, pursuant to the
authority vested in them under the laws of the Commonwealth of Massachusetts,
the Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees,
Officers, agents or holders of shares, personally, but bind only the Trust.
D. Custodian's Consent to Use of Its Name. The Trust 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 Trust. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid
and addressed to the Trust at its office at 0000 Xxxxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxxx 00000 or at such other place as the Trust 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 Trustees of the
Trust.
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 Trust or
by the Custodian, and no attempted assignment by the Trust 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: The AdvisorOne Funds
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: __________________ ___________________
Transfer Agent/Fund Accountant
Employees: __________________ ___________________
__________________ ___________________
__________________ ___________________
__________________ ___________________
* Authority restricted; does not
include:___________________________________________________________
APPENDIX B
Series of the Trust
The Xxxxxxx Fund
The Clermont 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)
