CUSTODIAN AGREEMENT
This Agreement is made as of the 10th day of July 1985, by and between
TrustFunds Equity Index Funds (the "Trust"), a business trust duly organized
under the laws of the Commonwealth of Massachusetts, and Manufacturers National
Bank of Detroit ("MNB"), a national bank;
WHEREAS the Trust is an open-end investment company registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended;
WHEREAS the Trust desires to appoint MNB as Custodian of the Securities and
cash owned or held by the Trust's S&P 500 Index Portfolio, Extended Market Index
Portfolio and such other Portfolios as the Trust and the Custodian may hereafter
agree on (the "Portfolios"), and MNB is willing to act in such capacity upon the
terms and conditions herein set forth; and
WHEREAS MNB in its capacity as Custodian hereunder will also collect and
apply the dividends and interest on said securities in the manner and to the
extent herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. DEFINITIONS. The terms as defined in this Section wherever used
in this Agreement, or in any amendment or
supplement hereto, shall have the meanings herein specified unless the context
otherwise requires.
Custodian: The term Custodian shall mean Manufacturers National Bank of Detroit
in its capacity as Custodian under this Agreement.
Proper Instructions: For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminal), telephone or telegraphic
instructions from a person or persons reasonably believed by the Custodian to be
a person or persons authorized from time to time by the Trustees of the Trust or
by the Board of Directors of the manager or investment administrator for the
Trust to give the particular class of instructions. Telephone or telegraphic
instructions shall be confirmed in writing by such person or persons as said
Trustees or Board of Directors shall have from time to time authorized to give
the particular class of instructions in question. The Custodian may act upon
telephone or telegraphic instructions without awaiting receipt of written
confirmation and shall not be liable for the failure of the Trust, its manager
or its investment administrator to confirm such instructions in writing.
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Securities: The term Securities shall mean equity securities, bonds,
debentures, notes, certificates of deposit, evidences of indebtedness, and other
securities and investments from time to time owned by the Trust for the accounts
of the Portfolios.
Unitholders: The term Unitholders shall mean the registered owners from time to
time of the Units of the Portfolios in accordance with the registry records
maintained by the Trust or agents on its behalf.
Units: The term Units shall mean the units of beneficial interest of the
Portfolios.
SECTION 2. AUTHORIZING RESOLUTIONS. The Trust shall from
time to time file with the Custodian a certified copy of each resolution of its
Board of Trustees authorizing the person or persons to give Proper Instructions
(as defined in Section 1) and specifying the class of instructions that may be
given by each person to the Custodian under this Agreement, together with
certified signatures of such persons authorized to sign those instructions.
These documents shall constitute conclusive evidence of the authority of the
officers and signatories designated therein to act and shall be considered in
full force and effect with the Custodian fully protected in acting in reliance
thereon until it receives written notice to the
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contrary; provided, however, that if the officer certifying the resolution
referred to above in this Section 2 is authorized to give Proper Instructions,
the certification shall be also signed by a second officer of the Trust.
SECTION 3. APPOINTMENT AS CUSTODIAN. The Trust hereby appoints the
Custodian as custodian of the Securities of the Portfolios and cash from time to
time on deposit hereunder, to be held by the Custodian and applied as provided
in this Agreement. The Custodian hereby accepts such appointment subject to the
terms and conditions hereinafter provided. Such Securities and cash of each
Portfolio shall, however, be segregated from the assets of the Custodian and
others and shall be and remain the sole property of the Trust for the respective
Portfolios, and the Custodian shall have only the bare custody thereof. The
Securities held by the Custodian shall, unless payable to bearer, be registered
in the name of the Custodian or in the name of its nominee. Securities,
excepting bearer Securities, delivered from time to time to the Custodian upon
purchase or otherwise shall in all cases be in due form for transfer or already
registered as above provided.
SECTION 4. DEPOSIT OF SECURITIES AND PROCEEDS. The Trust will initially
deposit with the Custodian the Securities owned
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by the Portfolios at the time this Agreement becomes effective. Thereafter the
Trust will cause to be deposited with the Custodian additional Securities as the
same are purchased or otherwise acquired from time to time. The Trust will also
cause to be deposited with the Custodian hereunder: (i) the net proceeds of
Securities sold from time to time; and (ii) the applicable net asset value of
Units sold from time to time whether representing initial issue, other stock, or
reinvestments of dividends and/or distributions payable to Unitholders, except
for such portion of such net asset value as the Trust may from time to time keep
in the custody of another bank.
SECTION 5. DIVIDENDS AND INTEREST. The Custodian will collect from time to
time the dividends and interest on the Securities held by it hereunder and will
deposit the same in the appropriate Portfolio accounts. The Custodian is
authorized to advance or pay out of said accounts accrued interest on bonds
purchased and dividends on Securities sold and like items. In the event that any
dividends or interest payments are received by the Trust, the Trust will endorse
to the Custodian, or cause to be endorsed, dividend and interest checks and will
issue appropriate orders to the issuers of the Securities to pay dividends and
interest to the Custodian. Subject to proper reserves for interest owing on
Securities sold and like items,
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the Custodian will disburse the money from time to time on deposit in the
account to or upon the order of the Trust as it may from time to time direct in
accordance with this Agreement.
SECTION 6. CASH DISBURSEMENTS. The Custodian is hereby authorized and
directed to disburse cash from time to time as follows:
(a) to transfer to the Transfer Agent or other dividend disbursing agent
to pay dividends and/or distributions which may be authorized by the
Trust upon receipt of Proper Instructions;
(b) to pay or provide the Trust with money to pay taxes, if any, upon
receipt of Proper Instructions;
(c) for the purpose of completing the purchase of Securities purchased by
the Portfolio: (i) upon receipt of Proper Instructions specifying the
Securities and stating the purchase price and the name of the broker,
investment banker or other party to or upon whose order the purchase
price is to be paid, and (ii) upon receipt of such Securities by the
Custodian or, in the case of a purchase effected through a
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Securities System, in accordance with Section 8 hereof;
(d) for the purpose of redeeming or purchasing Units upon receipt of
Proper Instructions stating the applicable redemption amounts payable
to the Transfer Agent, any other banks which the Trust shall have
appointed as a custodian, or other appropriate party;
(e) for the purpose of paying over to the Transfer Agent or dividend
disbursing agent such amounts as may be stated in Proper Instructions
representing proceeds of the sale of warrants, rights, stock
dividends, profit, and increases in values of the Securities as the
Trust may determine to include in dividends and/or distributions on
the Units;
(f) for the purpose of paying in whole or in part any loan of the
Portfolios upon receipt of Proper Instructions directing payment and
stating the Securities, if any, to be received against payment;
(g) to pay interest, investment advisory or subadvisory fees,
administration, dividend and transfer agency fees and costs,
compensation of personnel, or
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operating expenses (including, without limitation, fees for legal
purposes), and any other authorized Trust expense. Before making any
such payment or disbursement, however, the Custodian shall receive
(and may conclusively rely upon) Proper Instructions requesting such
payment or disbursement and stating that it is for one or more of the
purposes hereinabove enumerated, provided that if the disbursement is
for any other purposes, the instructions shall be in writing and shall
state that the disbursement was authorized by resolution of the Board
of Trustees of the Trust (a copy of which resolution shall be
attached) and is for a proper purpose.
SECTION 7. DELIVERY OF SECURITIES. The Custodian is hereby authorized and
directed to deliver Securities from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the
Portfolios upon receipt of: (i) the net proceeds of sales and (ii)
Proper Instructions specifying the Securities sold and stating the
amount to be received and the broker, investment banker, or other
party to or upon whose order the Securities are to be delivered;
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(b) for the purpose of exchanging Securities for other Securities and/or
cash upon timely receipt of: (i) Proper Instructions stating the
Securities to be delivered and the Securities and/or cash to be
received in exchange and the manner in which the exchange is to be
made; and (ii) against receipt of the other Securities and/or cash as
specified in the Proper Instructions;
(c) for the purpose of exchanging or converting Securities pursuant to
their terms or pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment, or otherwise upon
timely receipt of: (i) Proper Instructions authorizing such exchange
or conversion and stating the manner in which such exchange or
conversion is to be made; and (ii) against receipt of the Securities,
certificates of deposit, interim receipts, and/or cash to be received
as specified in the Proper Instructions;
(d) for the purpose of presenting Securities for payment which have
matured or have been called for redemption, upon receipt of
appropriate Proper Instructions and provided that the cash or other
consideration is to be paid to the Custodian;
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(e) for the purpose of delivery of Securities upon redemption of Units in
kind, upon receipt of appropriate Proper Instructions; or
(f) for the purpose of depositing with the lender Securities to be held as
collateral for a loan to the Portfolios upon receipt of Proper
Instructions directing delivery to the lender and upon receipt of the
proceeds of the loan.
SECTION 8. DEPOSIT AND MAINTENANCE OF SECURITIES. The Custodian may
deposit and/or maintain Securities owned by the Portfolios (i) in a clearing
agency, registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or (ii) in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as a "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
(a) The Custodian may keep Securities of the Portfolios in a Securities
System provided that such Securities are represented in an account
("Account") of the
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Custodian in the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian, or
otherwise for customers.
(b) The records of the Custodian with respect to Securities of the
Portfolios which are maintained in a Securities System shall identify
by book-entry those Securities belonging to the Portfolios.
(c) The Custodian shall pay for Securities purchased for the account of
the Portfolios upon: (i) receipt of advice from the Securities System
that such Securities have been transferred to the Account; and (ii)
the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolios. The Custodian
shall transfer Securities sold for the account of the Portfolios upon:
(i) receipt of advice from the Securities System 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 Portfolios. Copies of all advices from
the Securities
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System of transfers of Securities for the account of Portfolios shall
identify the Portfolios, be maintained for the Portfolios by the
Custodian, and be provided to the Trust at its request. The Custodian
shall furnish the Trust confirmation of each transfer to or from the
account of the Portfolios in the form of a written advice or notice
and shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transaction for the account of the Portfolios on
the next business day.
(d) The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's internal accounting control and
procedures for safeguarding securities deposited in the Securities
System.
(e) The Custodian shall have received an initial certificate of the
Secretary or an Assistant Secretary that the Trustees of the Trust
have approved the initial use of a particular Securities System, and
the Custodian shall receive an annual certificate of the Secretary or
an Assistant Secretary that the Trustees have reviewed the use by the
Trust of such Securities
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System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the
Trust resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
or their employees or from any failure of the Custodian or any such
agent to enforce effectively such rights as it may have against the
Securities System; 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 the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if and
to the extent that the Trust has not been made whole for any such loss
or damage.
SECTION 9. FORWARDING NOTICES, REPORTS AND STATEMENTS. The Custodian shall
forward to the Trust the following documents: proxies, proxy statements, annual
reports, conversion notices, call notices, or other notices or written materials
sent to the registered owners of Securities and actually
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received by the Custodian excluding only certificates representing Securities
and dividend and interest payments. Responsibility for taking action thereon is
the sole responsibility of the Trust and its Manager or Investment
Administrator, and not the responsibility of the Custodian. Upon actual receipt
by the Custodian of warrants or rights issued in connection with the assets of
the Portfolios, the Custodian shall enter on its ledgers appropriate notations,
including such receipt, and shall forward notice thereof to the Trust. The
Custodian shall have no obligation whatsoever to take any action of any kind
with respect to such warrants or rights except to make a best effort to notify
the Trust with regard to call notices of bearer bonds published in the principal
trade journals, but shall not be liable for any failure in respect thereof.
SECTION 10. DUTIES OF CUSTODIAN. Subject to the provisions herein, the
Custodian assumes only the usual duties or obligations normally performed by
custodians of mutual funds. It specifically assumes no responsibility for the
management, investment or reinvestment of the Securities from time to time owned
by the Portfolios whether or not on deposit hereunder. In connection with its
function under this Agreement, the Custodian shall:
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(a) obtain a "due xxxx" for dividends, interest, or other distributions of
the issuer due to the purchaser in connection with Securities
delivered to the Custodian;
(b) render to the Trust a daily report of all monies received or paid on
behalf of the Portfolios and such listings of Securities held by the
Custodian for the account of the Portfolios as may from time to time
be requested by the Trust;
(c) execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with the collection of
bond and note coupons;
(d) present for and collect payment of all coupons and other periodic
income items requiring presentation on the date of payment;
(e) monitor and record the collection of funds in accounts maintained by
the Custodian in the name of the Portfolios on the payable date of
such amounts;
(f) in accordance with the Manager's directions as to allocation of the
Securities to separate Portfolios designated by the Trust, the
Custodian shall maintain
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records showing the respective Securities, cash and other property
comprising each such Portfolio;
(g) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
The Custodian shall not be liable for any taxes, assessments, or governmental
charges which may be levied or assessed upon the Securities held by it
hereunder, or upon the income therefrom or otherwise whatsoever. The Custodian
may pay any tax, assessment or charge and reimburse itself out of the monies of
the Portfolio or out of the Securities held hereunder.
SECTION 11. LIABILITY OF CUSTODIAN. No liability of any
kind shall be attached to or incurred by the Custodian by reason of its custody
of the funds, assets, or Units held by it
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from time to time under this Agreement, or otherwise by reason of its position
as Custodian hereunder, except only for its own negligence, bad faith, or
willful misconduct in the performance of its duties as specifically set forth in
the Agreement. Without limiting the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the Trust
or for the Custodian, and upon statements of accountants, brokers and
other persons believed by it in good faith to be expert in the matters
upon which they are consulted; and for any action taken in or suffered
in good faith and reasonable care based upon such advice or
statements, the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or Unitholders as conclusive evidence that
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such resolution has been duly adopted and is in full force and
effect;
(d) may rely and shall be protected in acting upon any signature, written
instructions, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or
other paper or document reasonably believed by it to be genuine and to
have been signed, forwarded or presented by the purchaser, Trust or
other proper party or parties.
SECTION 12. INDEMNIFICATION. The Trust, its successors and assigns hereby
indemnify and hold harmless the Custodian, its successors and assigns, of and
from any and all liability whatsoever arising out of or in connection with the
Custodian's status, acts, or omissions under this Agreement, except only for
liability arising out of the Custodian's own negligence, bad faith, or willful
misconduct in the performance of its duties specifically set forth in this
Agreement. Without limiting the foregoing sentence, the Trust, its successors
and assigns do hereby fully indemnify and hold harmless the Custodian, its
successors and assigns from any and all loss, liability, claims, demands,
actions, suits, and expenses of any
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nature as the same may arise from the failure of the Trust to comply with any
law, rule, regulation or order of the United States, any State or any other
jurisdiction, governmental authority, body or board relating to the sale,
registration, qualification of Units of beneficial interest in the Portfolios,
or from the failure of the Trust to perform any duty or obligation under this
Agreement.
Upon written request of the Custodian, the Trust shall assume the entire
defense of any claim subject to the foregoing indemnity, or the joint defense
with the Custodian of such claim as the Custodian shall request. The indemnities
and defense provisions of this Section 12 shall indefinitely survive termination
of this Agreement.
SECTION 13. ACCOUNTANTS' REPORTS. The Custodian shall provide the Trust, at
such times as the Trust may reasonably require, with accountants' reports on the
accounting system, internal accounting controls and procedures for safeguarding
Securities, including Securities deposited and/or maintained in a Securities
System, relating to the services provided by a Custodian under this Agreement;
such reports, which shall be of sufficient scope and in sufficient detail to
provide reasonable assurance that any material inadequacies would be disclosed,
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shall state in detail material inadequacies disclosed by such examination and,
if there are no such inadequacies, shall so state. Notwithstanding the
foregoing, the Custodian shall not be required by the provisions of this Section
13 to have such a report, which is not required for other purposes, prepared by
independent public accountants, unless the Trust agrees to reimburse reasonable
charges of such independent public accountants for preparing such report.
SECTION 14. AMENDING THE AGREEMENT. This Agreement may be amended from
time to time without notice to or approval of the Unitholders by a supplemental
agreement executed by the Trust and the Custodian and amending and supplementing
this Agreement in the manner mutually agreed.
SECTION 15. DURATION AND TERMINATION. This Agreement shall continue in
effect until terminated. This Agreement may be terminated as to any Portfolio at
any time without the payment of any penalty by a vote of the majority of the
Trustees of the Trust on not less than 30 days nor more than 60 days written
notice to the Custodian, or by the Custodian on not less than 90 days written
notice, such termination to take effect at the time specified in the notice. In
case such notice of termination is given either by the Trust or by the
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Custodian, the Trustees of the Trust shall, by resolution duly adopted, promptly
appoint a Successor Custodian which Successor Custodian shall be a bank, trust
company, or a bank and trust company in good standing, with legal capacity to
accept custody of the securities and cash of a mutual fund. Upon receipt of
written notice from the Trust of the appointment of such successor and upon
receipt of Proper Instructions, the Custodian shall deliver such Securities and
cash as it may then be holding hereunder with respect to the Portfolio(s) to
which the termination applies directly and only to the Successor Custodian.
Unless or until a Successor Custodian has been appointed as above provided, the
Custodian then acting shall continue to act as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian upon ceasing to act as custodian hereunder with respect
to one or more Portfolios, shall execute an instrument transferring to the
Successor Custodian all of the predecessor Custodian's rights, duties,
obligations, and Trust assets in its possession held for such Portfolio(s).
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In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall, without the execution or filing of any papers or
other documents, succeed to and be substituted for the Custodian with like
effect as though originally named as such.
SECTION 16. COMPENSATION. The compensation to the Custodian for performing
the services described in this Agreement shall be derived from the compensation
paid to the Custodian in its capacity as the Administrator to the Trust as set
forth in the Investment Administration Agreement entered into on July 10, 1985
by and between MNB and SEI Financial Management Corporation. In the event that
such Investment Administration Agreement is terminated, the compensation under
this Agreement will be mutually negotiated between the Trust and the Custodi-
an.
SECTION 17. EFFECTIVE DATE. This Agreement shall take effect when assets of
the Trust are first delivered to the Custodian.
SECTION 18. MULTIPLE ORIGINAL COPIES. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such
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counterparts shall together constitute but one and the same instrument.
SECTION 19. APPOINTMENT OF CUSTODIAN'S AGENT. The Custodian may, after
giving 30 days written notice to the Trust, at any time or times appoint (and
may at any time remove) any other bank or trust company which is itself
qualified to act as custodian under the Investment Company Act of 1940, as
amended, as its agent to carry out such of the provisions of this Agreement as
the Custodian may from time to time direct, provided, however, that the
appointment of such agent shall not relieve the Custodian of any of its
responsibilities under this Agreement.
SECTION 20. DECLARATION OF TRUST. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees, officers or
Unitholders of the Trust individually, but are binding only upon the assets and
property of the Trust.
SECTION 21. CERTAIN RECORDS. The Custodian shall create and maintain all
records relating to its activities and
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obligations under this Agreement in such manner as will meet the obligations of
the Trust under the Investment Company Act of 1940, as amended, with particular
attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable
federal and state tax laws and any other law or administrative rules or
procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such matters as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Trust, the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at any reasonable times by officers of,
attorneys for, and auditors employed by, the Trust.
SECTION 22. ASSIGNMENT AND SUCCESSORS. 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 without the written consent of the Custodian, or by the Custodian without
the written consent of the Trust, authorized or approved by a resolution of its
Board of Trustees.
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IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement
to be signed by their respective officers as of the day and year first above
written.
TRUSTFUNDS EQUITY INDEX FUNDS
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
President
MANUFACTURERS NATIONAL BANK OF DETROIT
BY: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
XXXXXX X. XXXXXXXXXX
SENIOR VICE PRESIDENT
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