CUSTODY AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
AND
THE FLEX-FUNDS
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. 2
II. B. Acceptance of Custodian. 2
II. C. Documents to be Furnished. 2
II. D. Notice of Appointment of Dividend and Transfer Agent. 2
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys. 2
III. B. Delivery of Securities. 2
III. C. Payments for Shares. 3
III. D. Duties Upon Receipt. 3
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. 3
IV. B. Segregation of Redemption Proceeds. 3
IV. C. Disbursements of Custodian. 3
IV. D. Payment of Custodian Fees. 3
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund. 3
V. B. Segregation of Non-Cash Assets. 4
V. C. Securities in Bearer and Registered Form. 4
V. D. Duties of Custodian as to Securities. 4
V. E. Certain Actions Upon Written Instructions. 4
V. F. Custodian to Deliver Proxy Materials. 4
V. G. Custodian to Deliver Tender Offer Information. 4
V. H. Custodian to Deliver Security and Transaction Information. 5
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 5
VI. B. Sale of Securities. 5
VI. C. Delivery Versus Payment for Purchases and Sales. 5
VI. D. Payment on Settlement Date. 6
VI. E. Joint Repurchase Transactions 6
VI. F. Segregated Accounts. 6
VI. G. Advances for Settlement. 6
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings. 6
VII. B. Advances. 7
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 7
VIII. B. Actions not Required by Custodian. 8
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer Agent. 8
VIII. D. No Enforcement Actions. 8
VIII. E. Authority to Use Agents and Sub-Custodians. 8
VIII. F. Foreign Assets 8
VIII. G. No Duty to Supervise Investments. 9
VIII. H. All Records Confidential. 9
VIII. I. Compensation of Custodian. 9
VIII. J. Reliance Upon Instructions. 9
VIII. K. Books and Records. 9
VIII. L. Internal Accounting Control Systems. 10
VIII. M. No Management of Assets by Custodian. 10
VIII. N. Assistance to Trust. 10
ARTICLE IX - Termination
IX. A. Termination. 10
IX. B. Failure to Designate Successor Custodian. 10
ARTICLE X - Force Majeure 10
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 11
XI. B. Limitation of Personal Liability. 11
XI. C. Limitation of Fund Liability 11
XI. D. Authorization By Board. 11
XI. E. Custodian's Consent to Use of Its Name. 11
XI. F. Notices to Custodian. 11
XI. G. Notices to Trust. 11
XI. H. Amendments In Writing. 11
XI. I. Successors and Assigns. 12
XI. J. Governing Law. 12
XI. K. Jurisdiction. 12
XI. L. Counterparts. 12
XI. M. Headings. 12
APPENDIX A. Authorized Persons 13
APPENDIX B. Series of the Trust 14
APPENDIX C. Agents of the Custodian 15
APPENDIX D. Mutual Fund Custody Model 16
APPENDIX E. Mutual Fund Custody Fees 17
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the _1st_ day of
October 2003, by and between The Flex-Funds, a Massachusetts business trust (the
"Trust") and The Huntington National Bank, (the "Custodian"), a national banking
association having its principal office at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, 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:
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 Exchange Act of 1934, as amended.
AUTHORIZED PERSON - any 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 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 Instructions. 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, funding agreements, 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, whether by hand delivery, telex, facsimile or
otherwise, on the same Business Day on which such Oral Instructions were given.
PROPER INSTRUCTIONS - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
PROSPECTUS - With respect to each Fund, the Fund's then currently
effective prospectus and Statement of Additional Information, as filed with and
declared effective from time to time by the SEC.
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, including
securities of any registered investment company, 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 business trust organized under the laws of the Commonwealth
of Massachusetts which is an 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 has been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Institutional Trust Custody Group.
ARTICLE II
APPOINTMENT; ACCEPTANCE; AND FURNISHING OF DOCUMENTS
----------------------------------------------------
II. A. APPOINTMENT OF CUSTODIAN. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by each
Fund at any time during the term of this Agreement.
II. B. ACCEPTANCE OF CUSTODIAN. The Custodian hereby accepts
appointment as such custodian and agrees to perform the duties thereof as
hereinafter set forth.
II. C. DOCUMENTS TO BE FURNISHED. The following documents, including
any amendments thereto, will be provided contemporaneously with the execution of
this Agreement, to the Custodian by the Trust:
1.) A copy of the Declaration of Trust 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 Prospectuses.
5.) A Certificate of the President and Secretary of the
Trust setting forth the names and signatures of all
Authorized Persons (Included herein as Appendix A).
II. 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
III. 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 with at least
twenty-four hours, prior notification to the Trust 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.
III. B. DELIVERY OF SECURITIES. During the term of this Agreement, the
Trust will deliver or cause to be delivered to the Custodian all Securities,
except for uncertificated shares of investment companies owned by the Funds, 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. The Custodian is hereby authorized by the
Trust, acting on behalf of a Fund, to actually deposit any assets of the Fund in
the Book-Entry System or in a Depository, provided, however, that the Custodian
shall always be accountable to the Trust for the assets of the Fund so
deposited. Assets deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
The records of the Custodian with respect to securities of the Funds
which are maintained in a Book-Entry System or a Depository shall identify by
book-entry those securities belonging to each Fund. The Custodian shall pay for
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Securities purchased for the account of each Fund upon (1) receipt of advice
from the Book-Entry System or the Depository that such securities have been
transferred to the account, and (2) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the Fund. The
Custodian shall transfer Securities sold for the account of a Fund upon (i)
receipt of advice from the Book-Entry System or the Depository that payment for
such securities has been transferred to the account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer and payment for
the account of the Fund. Upon request, the Custodian shall furnish the Trust
confirmation of each transfer to or from the account of a Fund in the form of a
written advice or notice and shall furnish to the Trust copies of daily
transaction sheets reflecting each day's transactions in the Book-Entry System
or the Depository for the account of a Fund. The Custodian shall provide the
Trust with any report obtained by the Custodian speaking of any weaknesses or
exceptions in the Book-Entry or the Depository accounting system, internal
accounting controls and procedures for safeguarding securities deposited in the
Book-Entry System or the Depository.
Anything contrary in the Agreement notwithstanding, the Custodian shall
be liable to the Trust for any loss or damage to a Fund resulting from use of a
Book-Entry System or a Depository by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against a Book-Entry System or a
Depository. At the election of the Trust, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claim against a Book-Entry
System or a Depository or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that a Fund has not
been made whole for any such loss or damage.
III. 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.
III. D. DUTIES UPON RECEIPT. The Custodian shall not be responsible for
any Securities, moneys or other assets of any Fund until actually received
except for uncertificated shares of investment companies owned by the Funds.
ARTICLE IV
DISBURSEMENT OF TRUST ASSETS
----------------------------
IV. A. DECLARATION OF DIVIDENDS BY TRUST. The Trust shall furnish to
the Custodian a notice of declaration of any dividend or distribution in respect
of Shares of any Fund of the Trust, either (i) setting forth the date of the
declaration, 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.
IV. 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.
IV. C. DISBURSEMENTS OF CUSTODIAN. Upon receipt of a Written
Instruction 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 in good faith on
such directions and shall be under no obligation to inquire as to the propriety
of such directions.
IV. 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
-----------------------
V. 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 designating 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
3
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.
V. 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.
V. 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 a 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.
V. 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 Mutual Fund Custody Model, as amended with mutual consent of the
parties 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.
V. E. CERTAIN ACTIONS UPON WRITTEN INSTRUCTIONS. Upon receipt of
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
corporation, 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 corporation, and receive and hold under
the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
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;
5.) Deliver any Securities held for any Fund to the
depository agent for tender or other similar offers;
and
6.) Deliver any Securities upon receipt of Written
Instructions from the Dividend and Transfer Agent for
a Fund, for delivery to such Dividend and Transfer
Agent or to the holders of Shares of any Fund in
connection with distributions in kind, in
satisfaction of requests by holders of Shares of any
Fund for repurchase or redemption.
V. F. CUSTODIAN TO DELIVER PROXY MATERIALS. The Custodian shall
promptly deliver to the Trust all notices, proxy material and 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.
V. 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 as described
in the Mutual Fund Custody Model attached
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as Appendix D. 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.
V. H. CUSTODIAN TO DELIVER SECURITY AND TRANSACTION INFORMATION. On
each Business Day that the Federal Reserve Bank is open, the Custodian shall
furnish the Trust with a detailed statement of monies held for the Fund under
this Agreement and with confirmations and a summary of all transfers to or from
the account of the Fund. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities held for the
Fund under this Agreement. Where Securities are transferred to the account of
the Fund without physical delivery, the Custodian shall also identify as
belonging to the Fund a quantity of Securities in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the Depository.
With respect to information provided by this section, it shall not be necessary
for the Custodian to provide notice as described by Article XI Section F.
Notices to Trust; it shall be sufficient to communicate by such means as shall
be mutually agreeable to the Trust and the Custodian.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
-------------------------------
VI. 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. With respect to any repurchase agreement
transaction for the Funds, the Custodian shall assure that the collateral
reflected on the transaction advice is received by the Custodian and segregated
on behalf of the applicable Fund.
VI. 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.
VI. C. DELIVERY VERSUS PAYMENT FOR PURCHASES AND SALES. Purchases and
sales of Securities effected by the Custodian will be made on a delivery versus
payment basis. The Custodian may, in its sole discretion, upon receipt of
Written Instructions, elect to settle a purchase or sale transaction in some
other manner, but only upon receipt of acceptable indemnification from the Fund.
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VI. D. 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.
Exceptions to contractual settlement on purchases and sales, that will continue
to settle delivery versus payment, include real estate, venture capital,
international trades, open-ended mutual funds, non standard depository
settlements and in-kind trades.
VI. E. JOINT REPURCHASE TRANSACTIONS. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain any assets of a Fund
and any affiliated funds which are subject to joint repurchase transactions in
an account established solely for such transactions for the Fund and its
affiliated funds. For purposes of this Section, "affiliated funds" shall include
all investment companies and their portfolios for which subsidiaries or
affiliates of Xxxxxx Financial, Inc. serve as investment advisers, distributors
or administrators in accordance with applicable exemptive orders from the SEC.
VI. F. 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, short sales, or any other
securities 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.
VI. G. 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
------------------
VII. A. BORROWINGS. 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
6
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.
VII. B. ADVANCES. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in the
Fund incurring an overdraft at the end of any Business Day, such advance shall
be repayable immediately upon demand made by the Custodian at any time. The
Custodian may, in its sole discretion, charge interest accruing from the date of
such overdraft to but not including the date of such repayment at the rate per
annum customarily charged by the Custodian on similar overdrafts.
ARTICLE VIII
CONCERNING THE CUSTODIAN
------------------------
VIII. A. STANDARD OF CARE; LIMITATIONS ON LIABILITY OF CUSTODIAN. The
Custodian shall be held to a standard of reasonable care in carrying out the
provisions of this Agreement; provided, however, that the Custodian shall be
held to any higher standard of care which would be imposed upon the Custodian by
any applicable law or regulation. Except as otherwise provided herein, the
Custodian shall not be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, except for any such
loss or damage arising out of its negligence or willful misconduct. The Trust,
on behalf of the Fund and only from assets of the Fund (or insurance purchased
by the Trust with respect to its liabilities on behalf of the Fund hereunder),
shall defend, indemnify and hold harmless the Custodian and its directors,
officers, employees and agents with respect to any loss, claim, liability or
cost (including reasonable attorneys' fees) arising or alleged to arise from or
relating to the 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 1) the Custodian's failure to act in accordance with the standard of care
set forth herein or any higher standard of care which would be imposed upon the
Custodian by any applicable law or regulation and/or 2) the negligent action,
negligent omission, willful misconduct or any breach of this Agreement by the
Custodian, its directors, officers, employees or agents. The Custodian shall
defend, indemnify and hold harmless the Trust and its trustees, officers,
employees or agents with respect to any loss, claim, liability or cost
(including reasonable attorneys' fees) arising or alleged to arise from or
relating to the Custodian's duties as specifically set forth in this Agreement
with respect to the Fund hereunder or any other action or inaction of the
Custodian or its directors, officers, employees, agents, nominees, or
Sub-Custodians as to the Fund, except such as may arise from the negligent
action, negligent omission or willful misconduct of the Trust, its trustees,
officers, employees, or agents. The Custodian may, with respect to questions of
law apply for and obtain the advice and opinion of counsel to the Trust at the
expense of the Fund, or of its own counsel at its own expense, and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel to the Trust, and shall be
similarly protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the Fund
shall, within a reasonable time after being notified of legal advice received by
the Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the Custodian
or any of its employees, agents, nominees or Sub-Custodians, but not for any
special, incidental, consequential, or punitive damages; provided, however, that
nothing contained herein shall preclude recovery by the Trust, on behalf of the
Fund, of principal and of interest to the date of recovery on Securities
incorrectly omitted from the Fund's account or penalties imposed on the Trust,
in connection with the Fund, for any failures to deliver Securities. In any case
in which one party hereto may be asked to indemnify the other or hold the other
harmless, the party from whom indemnification is sought (the "Indemnifying
Party") shall be advised of all pertinent facts concerning the situation in
question, and the party claiming a right to indemnification (the "Indemnified
Party") will use reasonable care to identify and notify the Indemnifying Party
promptly concerning any situation which presents or appears to present a claim
for indemnification against the Indemnifying Party. The
7
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and reasonably satisfactory to the Indemnified Party
and the Indemnifying Party will so notify the Indemnified Party and thereupon
such Indemnifying Party shall take over the complete defense of the claim and
the Indemnified Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this paragraph, except
the expenses of any additional counsel retained by the Indemnified Party who
agrees to pay for such expense. In no case shall any party claiming the right to
indemnification confess any claim or make any compromise in any case in which
the other party has been asked to indemnify such party (unless such confession
or compromise is made with such other party's prior written consent. The
provisions of this section VIII. A. shall survive the termination of this
Agreement.
VIII. 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 Declaration of Trust or By-laws, or
its investment objectives and policies as then in
effect.
VIII. 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.
VIII. 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.
VIII. 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. 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.
VIII. F. FOREIGN ASSETS. With regard to any foreign assets of the Funds
to be placed in the care of an "eligible foreign custodian" (as defined in Rule
17f-5(a)(1) under the Act), the Trust hereby delegates to the Custodian the
responsibilities set forth in paragraphs (c)(1), (c)(2) and (c)(3) under Rule
17f-5 under the Act and the Custodian agrees to serve as the Funds' "foreign
custody manager" (as defined in Rule 17f-5(a)(3) of the Act) with respect to
such assets. The Custodian hereby accepts such delegation.
As the Funds' "foreign custody manager" the Custodian shall (i)
furnish, or cause to be furnished, to the Trust written reports notifying the
Board of Trustees of the placement of the foreign assets with a particular
custodian, any material change in any Fund's foreign custody arrangements and
such other reports as the Board of Trustees deems reasonable and appropriate and
(ii) exercise reasonable care, prudence and diligence such as a
8
person having responsibility for the safekeeping of the Funds' foreign assets
would exercise in performing the delegated responsibilities specified above.
Before placing and maintaining any of the Funds' foreign assets in the care of
an eligible foreign custodian, the Custodian shall make the determination that
the foreign assets will be subject to reasonable care based upon the standards
applicable to custodians in the relevant market pursuant to Rule 17f-5(c)(1)
under the Act. Any arrangement with an eligible foreign custodian shall be
governed by a written contract that the Custodian has determined will provide
reasonable care of the foreign assets based on the standards specified in Rule
17f-5(c)(1) under the Act and the contract shall meet all of the requirements of
Rule 17f-5(c)(2)(i) under the Act. The Custodian represents and warrants to the
Trust that it has established a system to monitor the appropriateness of
maintaining the foreign assets with each particular foreign custodian pursuant
to Rule 17f-5(c)(1) under the Act and to monitor performance of the contract
pursuant to Rule 17f-5(c)(2) under the Act.
With regard to any foreign assets of the Funds to be placed with an
eligible securities depository, the Custodian agrees that the custody
arrangement will provide reasonable safeguards against the custody risks
associated with maintaining assets with the eligible securities depository. The
Custodian shall provide written reports to the Trustees of the Trust notifying
them of the placement of any of the Funds' foreign assets with a particular
custodian and of any material change in any of the Funds foreign custody
arrangement. Upon request, the Trust shall receive from the Custodian an
analysis of the custody risks associated with maintaining assets with the
eligible securities depository. The Custodian shall monitor the custody risks
associated with maintaining assets with the eligible securities depository on a
continuing basis, and shall promptly notify the Trust or its investment adviser
of any material change in such risks. The Custodian agrees to exercise
reasonable care, prudence and diligence in performing the above requirements
relating to eligible securities depositories.
VIII. G. 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 Declaration of Trust and the
Trust's By-Laws.
VIII. H. 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. Custodian shall give prompt, written
notice to the Trust of any such disclosure.
VIII. I. COMPENSATION OF CUSTODIAN. The Custodian shall be entitled to
receive and the Trust agrees to pay to the Custodian, for the Fund's account
from the Fund's assets only, such compensation as shall be determined pursuant
to Appendix E attached hereto, or as shall be determined pursuant to amendments
to Appendix E as approved by the Custodian and the Trust. The Custodian shall be
entitled to charge against any money held by it for the accounts of the Fund the
amount of any loss, damage, liability or expense, including counsel fees, for
which it shall expressly be entitled to reimbursement under the provisions of
this Agreement as determined by agreement of the Custodian and the Trust or by
the final order of any court or arbitrator having jurisdiction and as to which
all rights of appeal shall have expired. The expenses which the Custodian may
charge against the account of 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.
VIII. J. RELIANCE UPON INSTRUCTIONS. The Custodian shall be entitled to
rely upon any Proper Instructions if such reliance is made in good faith. 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.
VIII. K. 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. In the event of termination of this Agreement,
the Trust may request Custodian to deliver all such records to the Trust, to a
successor Custodian, or to such other person as the Trust may direct. The
Custodian shall supply daily to the Trust a tabulation of Securities owned by a
Fund and held by the Custodian. In addition, the Custodian shall electronically
transmit daily to the Trust information pertaining to security trading and other
investment activity and all other cash activity of a Fund.
9
VIII. L. INTERNAL ACCOUNTING CONTROL SYSTEMS. The Custodian shall, and
shall cause its agents and subcustodian to, send to the Trust any reports
prepared by or furnished to them regarding their own systems of internal
accounting controls. The Custodian shall promptly notify the Trust of any
determinations of material weaknesses or inadequacies in the internal accounting
controls of the Custodian, its agents or subcustodians.
VIII. M. 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.
VIII. N. ASSISTANCE TO TRUST. The Custodian shall take all reasonable
action, that the Trust may from time to time request, to assist the Trust (i) 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 and (ii) in meeting the reporting obligations under the Xxxxxxxx-Xxxxx Act
of 2002.
ARTICLE IX
TERMINATION
-----------
IX. A. TERMINATION. Either party hereto may terminate this Agreement
for any reason by giving to the other party a notice in writing specifying the
date of such termination, which shall be not less than ninety (90) days after
the date of giving of such notice. If such notice is given by the 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 each of which
shall be a bank or other person authorized to hold assets for the Trust under
Section 17(f) of the Act. 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 other person authorized
to hold assets for the Trust under Section 17(f) of the Act. Upon the date set
forth in such notice this Agreement shall terminate, and the Custodian, provided
that it has received a notice of acceptance by the successor custodian, shall
deliver, on that date, directly to the successor custodian all Securities and
monies then owned by the Fund and held by it as Custodian. Upon termination of
this Agreement, the Trust shall pay to the Custodian on behalf of the Trust such
compensation specified hereunder as may be due as of the date of such
termination. In connection with the termination of the Agreement by the Trust,
the Trust also agrees that the Custodian shall be reimbursed for the cost
incurred by the Custodian for the transfer of cash and securities to the
Successor Custodian . To the extent that the Custodian terminates this
Agreement, the Custodian shall not seek compensation from the Trust for the
costs incurred by the Custodian in connection with the Custodian's transfer of
cash and securities to the Successor Custodian. Notwithstanding anything to the
contrary herein, the Trust may immediately terminate this Agreement without
responsibility for the costs incurred by the Custodian for the transfer of cash
and securities to the Successor Custodian in the event of the appointment of a
conservator or receiver for the Custodian, upon the happening of a similar event
at the direction of an appropriate regulatory agency or court of competent
jurisdiction, or upon the determination or reporting of any material weaknesses
or inadequacies in the Custodian or its agent's system of internal accounting
control.
IX. B. FAILURE TO DESIGNATE SUCCESSOR CUSTODIAN. 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, except for any
indemnities or other obligations that expressly survive the termination of this
agreement and 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,
10
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; 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
-------------
XI. 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.
XI. 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 assets of 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, because of the obligations contained in this Agreement or implied
therefrom and that any and all such liability is hereby expressly waived and
released by the Custodian as a condition of, and as a consideration for, the
execution of this Agreement.
XI. C. LIMITATION OF FUND LIABILITY. The Custodian agrees that the
obligations and liabilities assumed by the Trust and any Fund pursuant to this
Agreement, including, without limitation, any obligation or liability to
indemnify the Custodian pursuant to Section VIII. A. hereof, shall be limited in
any case to the relevant Fund and its assets and that the Custodian shall not
seek satisfaction of any such obligation from the shareholders of the relevant
Fund, from any other Fund or its shareholders or from the trustees, officers,
employees or agents of the Trust, or any of them. In addition, in connection
with the discharge and satisfaction of any claim made by the Custodian against
the Trust, for whatever reason, involving more than one Fund, the Trust shall
have the exclusive right to determine the appropriate allocations of liability
for any such claim between or among the Funds.
XI. D. 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 and then only to the extent of the assets of the Trust.
XI. E. CUSTODIAN'S CONSENT TO USE OF ITS NAME. The Trust shall obtain
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including advertising
material) specifically mentioning the Custodian (other than merely by name and
address).
XI. F. 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 The Huntington National Bank, Easton Business Service Center,
0 Xxxxxx Xxxx XX0X00, Xxxxxxxx, Xxxx, 00000, attention Director Mutual Fund
Custody, or at such other place as the Custodian may from time to time designate
in writing.
XI. G. 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 if addressed to the Custodian and mailed or delivered to the
Trust at its office at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 Attention
President, or at such other place as the Trust may from time to time designate
in writing.
XI. H. 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. The Trust will provide the Custodian thirty (30) days written notice of
any amendment or modification to Appendices A or B. The Custodian will provide
the Trust ninety (90) days written notice of any amendment or modification to
Appendices C or E. The Custodian will provide the Trust thirty (30) days written
notice of any amendment or modification to Appendix D.
11
XI. I. 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.
XI. J. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Ohio.
XI. K. 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.
XI. L. 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.
XI. M. 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.
WITNESS: TRUST:
THE FLEX-FUNDS
__________________________ By:_____________________________________
Title:__________________________________
WITNESS: CUSTODIAN:
The Huntington National Bank
___________________________ By:_____________________________________
Title:__________________________________
12
APPENDIX A
AUTHORIZED PERSONS SPECIMEN SIGNATURES
Chairman: __________________ _______________________________
President: __________________ _______________________________
Secretary: __________________ _______________________________
Treasurer: __________________ _______________________________
Senior Vice
President: __________________ _______________________________
Assistant
Secretary: __________________ _______________________________
Assistant
Treasurer: __________________ _______________________________
Adviser Employees: __________________ _______________________________
__________________ _______________________________
Transfer Agent/Fund Accountant
Employees: __________________ _______________________________
__________________ _______________________________
__________________ _______________________________
__________________ _______________________________
* Authority restricted; does not include: _____________________________________
13
APPENDIX B
Series of the Trust
The Muirfield Fund
The Total Return Utilities Fund
The Highlands Growth Fund
The Dynamic Growth Fund
The Aggressive Growth Fund
The US Government Fund
The Money Market Fund
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APPENDIX C
AGENTS OF THE CUSTODIAN
The following agents are employed currently by The Huntington National
Bank for securities processing and control ...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cleveland Branches
Bank of New York
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(For Foreign Securities and certain non-DTC eligible Securities)
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APPENDIX D
MUTUAL FUND CUSTODY MODEL
Mutual Fund Custody Model document is attached.
00
XXXXXXXX X
MUTUAL FUND CUSTODY FEES
CUSTODY FEE SCHEDULE
FLEX FUNDS/XXXXXX ADVISOR FUNDS*
JUNE 6, 2003
MARKET VALUE FEE PER FUND
1.25 Basis Points.........................First $75 million of Market Value
1.0 Basis Points........................On Next $75 million of Market Value
0.75 Basis Points.................In Excess of $150 million of Market Value
TRANSACTION FEE
DTC & Fed. Eligible Items.................................$9.00/Transaction
Non-DTC & Fed. Eligible Items............................$22.00/Transaction
Mortgage Backed Securities & Private Placements..........$20.00/Transaction
Mortgage Backed Securities & Private Placement Payments .....$ 5.00/Payment
Foreign Securities (depending on country)..........$15-200.00/Transaction**
Options..................................................$20.00/Transaction
Repurchase Agreements.....................................$0.00/Transaction
DISBURSEMENTS
Wire Transfer Fee (In/Out)......................................$10.00 Each
Disbursements by Check..........................................$10.00 Each
INTERNET ACCESS
Account Access via Huntington Portfolio Today.....................No charge
MONTHLY SUB-ACCOUNT FEE
Account Administration Fee for Each Sub-account..............$50.00/Account
MONTHLY MINIMUM FEE
Minimum Fee Per Fund Account................................$250.00/Account
This is the minimum fee to be assessed in the event the sum of the
market value fee and transaction fees is less than $250.
* The Growth Stock Portfolio will be assessed a 5 basis points fee in lieu of
the stated market value and transaction fees. Monthly DTC and FED transactions
in excess of 250 transactions respectively will be assessed at the stated rate.
The Money Market Portfolio will be assessed a 0.75 basis point fee in lieu of
the stated market value and transaction fees.
**Bank Of New York is our agent for clearing and pricing of global securities.
The transaction and holding costs vary with each country.
Advances for Settlement and/or other Borrowings by the Funds will be at the per
annum rate of Target Fed Funds.
Other Fees may be assessed for special handling and other miscellaneous
services.
The Huntington will not change fees for a period of three years beyond
inception; however the Huntington may change fees upon 30 days written notice to
the client should the client's actual investment strategy vary significantly
over that time.
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