Exhibit 9
CUSTODIAN AGREEMENT
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This Agreement made this 18th day of February, 2005 between REGIONS XXXXXX
XXXXXX SELECT FUNDS, (the "Trust"), a Massachusetts business trust, on behalf of
the portfolios of the Trust set forth on Schedule A hereto (hereinafter
collectively called the "Funds" and individually referred to as a "Fund"),
organized and existing under the laws of the Commonwealth of Massachusetts,
having its principal place of business at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx 00000, and REGIONS BANK, a bank organized in the state of Alabama,
having its principal place of business at 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000 (hereinafter called the "Custodian"),
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
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The Trust hereby employs the Custodian as the custodian of the assets of
each of the Funds of the Trust. Except as otherwise expressly provided herein,
the securities and other assets of each of the Funds shall be segregated from
the assets of each of the other Funds and from all other persons and entities.
The Trust will deliver to the Custodian all securities and cash owned by the
Funds and all payments of income, payments of principal or capital distributions
received by them with respect to all securities owned by the Funds from time to
time, and the cash consideration received by them for shares of beneficial
interest of the Funds as may be issued or sold from time to time ("Shares"). The
Custodian shall not be responsible for any property of the Funds held or
received by the Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.18), the Custodian shall from time to time employ one or more sub-custodians
upon the terms specified in the Proper Instructions, provided that the Custodian
shall have no more or less responsibility or liability to the Trust or any of
the Funds on account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held by the
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Custodian
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2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate for
the account of each Fund all non-cash property, including all securities
owned by each Fund, other than securities which are maintained pursuant to
Section 2.12 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System", or securities
which are subject to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall maintain records of all
receipts, deliveries and locations of such securities, together with a
current inventory thereof, and shall conduct periodic physical inspections
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of certificates representing stocks, bonds and other securities held by it
under this Agreement in such manner as the Custodian shall determine from
time to time to be advisable in order to verify the accuracy of such
inventory. With respect to securities held by any agent appointed pursuant
to Section 2.11 hereof, and with respect to securities held by any
sub-custodian appointed pursuant to Section 1 hereof, the Custodian may
rely upon certificates from such agent as to the holdings of such agent
and from such sub-custodian as to the holdings of such sub-custodian, it
being understood that such reliance in no way relieves the Custodian of
its responsibilities under this Agreement. The Custodian will promptly
report to the Trust the results of such inspections, indicating any
shortages or discrepancies uncovered thereby, and take appropriate action
to remedy any such shortages or discrepancies.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver securities
owned by a Fund held by the Custodian or in a Securities System account of
the Custodian only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only
in the following cases:
(1) Upon sale of such securities for the account of a Fund and receipt
of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
(4) To the depository agent in connection with tender or other similar
offers for portfolio securities of a Fund, in accordance with the
provisions of Section 2.17 hereof;
(5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name of a
Fund or into the name of any nominee or nominees of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Section 2.11 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a different
number of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; PROVIDED that, in any
such case, the new securities are to be delivered to the Custodian;
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(7) Upon the sale of such securities for the account of a Fund, to the
broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery custom"; provided that in any such
case, the Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from the
Custodian's own failure to act in accordance with the standard of
reasonable care or any higher standard of care imposed upon the
Custodian by any applicable law or regulation if such above-stated
standard of reasonable care were not part of this Agreement;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
(9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
(10) For delivery in connection with any loans of portfolio securities of
a Fund, BUT ONLY against receipt of adequate collateral in the form
of (a) cash, in an amount specified by the Trust, (b) certificated
securities of a description specified by the Trust, registered in
the name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for transfer, or
(c) securities of a description specified by the Trust, transferred
through a Securities System in accordance with Section 2.12 hereof;
(11) For delivery as security in connection with any borrowings requiring
a pledge of assets by a Fund, BUT ONLY against receipt of amounts
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, further securities may
be released for the purpose;
(12) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions for a Fund;
(13) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian, and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
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Commission and/or any Contract Market, or any similar organization
or organizations, regarding account deposits in connection with
transactions for a Fund;
(14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for a Fund, for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, in
satisfaction of requests by holders of Shares for repurchase or
redemption; and
(15) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Executive Committee of the Trust on behalf of a Fund signed by
an officer of the Trust and certified by its Secretary or an
Assistant Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities shall be
made.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other than
bearer securities) shall be registered in the name of a particular Fund or
in the name of any nominee of the Fund or of any nominee of the Custodian
which nominee shall be assigned exclusively to the Fund, UNLESS the Trust
has authorized in writing the appointment of a nominee to be used in
common with other registered investment companies affiliated with the
Fund, or in the name or nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by the Custodian on behalf
of a Fund under the terms of this Agreement shall be in "street name" or
other good delivery form.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of each Fund, other than
cash maintained in a joint repurchase account with other affiliated funds
pursuant to Section 2.14 of this Agreement or by a particular Fund in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended, (the "1940 Act"). Funds held
by the Custodian for a Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that every such bank or trust company shall
be qualified to act as a custodian under the 1940 Act and that each such
bank or trust company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Board of
Trustees ("Board") of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian for the Fund and shall be
withdrawable by the Custodian only in that capacity. If requested by the
Trust, the Custodian shall furnish the Trust, not later than twenty (20)
days after the last business day of each month, an internal reconciliation
of the closing balance as of that day in all accounts described in this
section to the balance shown on the daily cash report for that day
rendered to the Trust.
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2.5 PAYMENTS FOR SHARES. The Custodian shall make such arrangements with the
Transfer Agent of each Fund, as will enable the Custodian to receive the
cash consideration due to each Fund and will deposit into each Fund's
account such payments as are received from the Transfer Agent. The
Custodian will provide timely notification to the Trust and the Transfer
Agent of any receipt by it of payments for Shares of the respective Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Trust and
the Custodian, the Custodian shall make federal funds available to the
Funds as of specified times agreed upon from time to time by the Trust and
the Custodian in the amount of checks, clearing house funds, and other
non-federal funds received in payment for Shares of the Funds which are
deposited into the Funds' accounts.
2.7 COLLECTION OF INCOME.
(1) The Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to
which each Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or its agent thereof and shall credit such
income, as collected, to each Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest
when due on securities held hereunder. The collection of income due
the Funds on securities loaned pursuant to the provisions of Section
2.2 (10) shall be the responsibility of the Trust. The Custodian
will have no duty or responsibility in connection therewith, other
than to provide the Trust with such information or data as may be
necessary to assist the Trust in arranging for the timely delivery
to the Custodian of the income to which each Fund is properly
entitled.
(2) The Trust shall promptly notify the Custodian whenever income due on
securities is not collected in due course and will provide the
Custodian with monthly reports of the status of past due income. The
Trust will furnish the Custodian with a weekly report of
accrued/past due income for the Fund. Once an item is identified as
past due and the Trust has furnished the necessary claim
documentation to the Custodian, the Custodian will then initiate a
claim on behalf of the Trust. The Custodian will furnish the Trust
with a status report monthly unless the parties otherwise agree.
2.8 PAYMENT OF FUND MONEYS. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of each Fund in the following cases only:
(1) Upon the purchase of securities, futures contracts or options on
futures contracts for the account of a Fund but only (a) against the
delivery of such securities, or evidence of title to futures
contracts, to the Custodian (or any bank, banking firm or trust
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company doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee of
the Custodian referred to in Section 2.3 hereof or in proper form
for transfer, (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth in
Section 2.12 hereof or (c) in the case of repurchase agreements
entered into between the Trust and any other party, (i) against
delivery of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of securities owned
by the Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund;
(2) In connection with conversion, exchange or surrender of securities
owned by a Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares of a Fund issued by the
Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the account
of the Fund: interest; taxes; management, accounting, transfer agent
and legal fees; and operating expenses of the Fund, whether or not
such expenses are to be in whole or part capitalized or treated as
deferred expenses;
(5) For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;
(6) For payment of the amount of dividends received in respect of
securities sold short;
(7) For any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions, a certified copy of a resolution of the
Executive Committee of the Trust on behalf of a Fund signed by an
officer of the Trust and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons to whom
such payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In
any and every case where payment for purchase of securities for the
account of a Fund is made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific written instructions from
the Trust to so pay in advance, the Custodian shall be absolutely liable
to the Fund for such securities to the same extent as if the securities
had been received by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF A FUND. From such
funds as may be available for the purpose of repurchasing or redeeming
Shares of a Fund, but subject to the limitations of the Declaration of
Trust and any applicable votes of the Board of the Trust pursuant thereto,
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the Custodian shall, upon receipt of instructions from the Transfer Agent,
make funds available for payment to holders of Shares of such Fund who
have delivered to the Transfer Agent a request for redemption or
repurchase of their Shares including without limitation through bank
drafts, automated clearinghouse facilities, or by other means. In
connection with the redemption or repurchase of Shares of the Funds, the
Custodian is authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank designated by the
redeeming shareholders.
2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act and any applicable
state law or regulation, to act as a custodian, as its agent to carry out
such of the provisions of this Section 2 as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEM. The Custodian may deposit
and/or maintain securities owned by the Funds in a clearing agency
registered with the Securities and Exchange Commission ("SEC") under
Section 17A of the Exchange Act, which acts as a securities depository, or
in the book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve Board
and SEC rules and regulations, if any, and subject to the following
provisions:
(1) The Custodian may keep securities of each Fund in a Securities
System provided that such securities are represented in an account
("Account") of the 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;
(2) The records of the Custodian with respect to securities of the Funds
which are maintained in a Securities System shall identify by
book-entry those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased for the account of
each Fund 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 Fund. The Custodian
shall transfer securities sold for the account of a Fund 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 Fund. Copies of all advices from
the Securities System of transfers of securities for the account of
a Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Trust at its request. 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 Securities System
for the account of a Fund.
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(4) The Custodian shall provide the Trust with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System;
(5) The Custodian shall have received the initial certificate, required
by Section 9 hereof;
(6) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to a
Fund resulting from use of the Securities System 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 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 a Fund has not
been made whole for any such loss or damage.
(7) The authorization contained in this Section 2.12 shall not relieve
the Custodian from using reasonable care and diligence in making use
of any Securities System.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for
and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an
account by the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the Trust, the
Custodian and a broker-dealer registered under the Exchange Act and 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 (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions for
a Fund, (ii) for purpose of segregating cash or government securities in
connection with options purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or sold for a Fund, (iii)
for the purpose of compliance by the Trust or a Fund with the procedures
required by any release or releases of the SEC relating to the maintenance
of segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, BUT ONLY, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board or of the Executive Committee signed by an officer
of the Trust and certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
2.14 JOINT REPURCHASE AGREEMENTS. 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
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affiliated funds. For purposes of this Section 2.14, "affiliated funds"
shall include all investment companies and their portfolios for which
subsidiaries of Regions Financial Corporation serve as investment
advisers, distributors or administrators in accordance with applicable
exemptive orders from the SEC. The requirements of segregation set forth
in Section 2.1 shall be deemed to be waived with respect to such assets.
2.15 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of a Fund held by it and in connection with
transfers of securities.
2.16 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of
a Fund or a nominee of a Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver
to the Trust such proxies, all proxy soliciting materials and all notices
relating to such securities.
2.17 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian shall
transmit promptly to the Trust and the investment adviser of the Trust all
written information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund and
the maturity of futures contracts purchased or sold by the Fund) received
by the Custodian from issuers of the securities being held for the Fund.
With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Trust and the investment adviser of the Trust all written
information received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Trust or the investment adviser of the
Trust desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Trust shall notify the
Custodian in writing at least three business days prior to the date on
which the Custodian is to take such action. However, the Custodian shall
nevertheless exercise its best efforts to take such action in the event
that notification is received three business days or less prior to the
date on which action is required. For securities which are not held in
nominee name, the Custodian will act as a secondary source of information
and will not be responsible for providing corporate action notification to
the Trust.
2.18 PROPER INSTRUCTIONS. Proper Instructions as used throughout this Section 2
means a writing signed by one or more person or persons as the Board shall
have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the Custodian reasonably
believes them to have been given by a person previously authorized in
Proper Instructions to give such instructions with respect to the
transaction involved, and (b) the Trust promptly causes such oral
instructions to be confirmed in writing. Upon receipt of a certificate of
the Secretary or an Assistant Secretary as to the authorization by the
Board of the Trust accompanied by a detailed description of procedures
approved by the Board, Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices
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provided that the Board and the Custodian are satisfied that such
procedures afford adequate safeguards for a Fund's assets.
2.19 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, PROVIDED that all such payments shall be accounted for to
the Trust in such form that it may be allocated to the affected
Fund;
(2) surrender securities in temporary form for securities in definitive
form;
(3) endorse for collection, in the name of a Fund, checks, drafts and
other negotiable instruments; and
(4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of each Fund except as
otherwise directed by the Trust.
2.20 EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other instrument or
paper reasonably believed by it to be genuine and to have been properly
executed on behalf of a Fund. The Custodian may receive and accept a
certified copy of a vote of the Board of the Trust as conclusive evidence
(a) of the authority of any person to act in accordance with such vote or
(b) of any determination of or any action by the Board pursuant to the
Declaration of Trust as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
2.21 NOTICE TO TRUST BY CUSTODIAN REGARDING CASH MOVEMENT. The Custodian will
provide timely notification to the Trust of any receipt of cash, income or
payments to the Trust and the release of cash or payment by the Trust.
2.22 USE OF SECURITIES DEPOSITORY. The Custodian agrees: (a) to exercise due
care in accordance with reasonable commercial standards in placing the
Funds' financial assets with securities depositories; (b) to provide, upon
request, reports concerning its internal accounting controls and financial
strength; and (3) that any agreement that is applicable to an intermediary
custodian appointed by the Custodian for purposes of maintaining the
Funds' financial assets in a securities depository pursuant to the terms
of this Agreement shall require that the intermediary custodian be
obligated to exercise due care in accordance with reasonable commercial
standards in discharging its duty as a securities intermediary to obtain
and thereafter maintain financial assets, corresponding to the security
entitlements of its entitlement holders (as defined in U.C.C. ss.
8-102(a)(7) (2002)). The terms "financial assets," "securities
entitlements," "securities intermediary," "securities depository," and
"intermediary custodian," as used herein, shall have the same meaning as
when such terms are used in Rule 17f-4.
3. Duties of Custodian With Respect to the Books of Account and Regulatory
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Reporting.
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The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of the Trust to keep the books of
account of each Fund and appointed to report on behalf of each Fund to the
Board, the SEC and other regulatory bodies.
4. Records.
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The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust and the Funds under the 1940 Act, with particular
attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, and
specifically including identified cost records used for tax purposes. All such
records shall be the property of the Trust and shall at all times during the
regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Trust and employees and agents
of the SEC. In the event of termination of this Agreement, the Custodian will
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 and
shall, when requested to do so by the Trust and for such compensation as shall
be agreed upon between the Trust and the Custodian, include certificate numbers
in such tabulations. In addition, the Custodian shall electronically transmit
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daily to the Trust information pertaining to security trading and other
investment activity and all other cash activity of a Fund.
5. Opinion of Funds' Independent Auditors.
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The Custodian shall take all reasonable action, as the Trust may from time
to time request, to obtain from year to year favorable opinions from each Fund's
independent auditors with respect to its activities hereunder in connection with
the preparation of the Fund's registration statement, periodic reports, or any
other reports to the SEC and with respect to any other requirements of such
Commission.
6. Reports to Trust by Independent Auditors.
----------------------------------------
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports for each Fund by independent auditors on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian for the Fund under this Agreement; such
reports shall be of sufficient scope and in sufficient detail, as may reasonably
be required by the Trust, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination and, if there are no such
inadequacies, the reports shall so state.
7. Compensation of Custodian.
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Trust and the Custodian. The fees in effect on the date hereof and applicable to
the Funds are set forth in Schedule B attached hereto.
8. Responsibility 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 if such above stated standard of
reasonable care was not part of this Agreement. The Custodian shall be entitled
to rely on and may act upon advice of counsel (who may be counsel for the Trust)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations, and is in good
faith and without negligence. Subject to the limitations set forth in Section 15
hereof, the Custodian shall be kept indemnified by the Trust but only from the
assets of the Fund involved in the issue at hand and be without liability for
any action taken or thing done by it in carrying out the terms and provisions of
this Agreement in accordance with the above standards.
12
In order that the indemnification provisions contained in this Section 8
shall apply, however, it is understood that if in any case the Trust may be
asked to indemnify or save the Custodian harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any situation which presents
or appears likely to present the probability of such a claim for
indemnification. The Trust shall have the option to defend the Custodian against
any claim which may be the subject of this indemnification, and in the event
that the Trust so elects it will so notify the Custodian and thereupon the Trust
shall take over complete defense of the claim, and the Custodian shall in such
situation initiate no further legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall in no case confess any
claim or make any compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written consent.
Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the reasonable opinion of the Custodian, result in the Custodian or its nominee
assigned to a Fund being liable for the payment of money or incurring liability
of some other form, the Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide indemnity to the
Custodian in an amount and form satisfactory to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the Trust
agrees to indemnify and hold harmless the Custodian and its nominee from and
against all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) (referred to herein as authorized charges) incurred or
assessed against it or its nominee in connection with the performance of this
Agreement, except such as may arise from it or its nominee's own failure to act
in accordance with the standard of reasonable care or any higher standard of
care which would be imposed upon the Custodian by any applicable law or
regulation if such above-stated standard of reasonable care were not part of
this Agreement. To secure any authorized charges and any advances of cash or
securities 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
or for extraordinary or emergency purposes during any business day, the Trust
hereby grants to the Custodian a security interest in and pledges to the
Custodian securities held for the Fund by the Custodian, in an amount not to
exceed 10 percent of the Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or the Fund's investment
adviser. Should the Trust fail to make such designation, or should it instruct
the Custodian to make advances exceeding the percentage amount set forth above
and should the Custodian do so, the Trust hereby agrees that the Custodian shall
have a security interest in all securities or other property purchased for a
Fund with the advances by the Custodian, which securities or property shall be
deemed to be pledged to the Custodian, and the written instructions of the Trust
instructing their purchase shall be considered the requisite description and
designation of the property so pledged for purposes of the requirements of the
13
Uniform Commercial Code. Should the Trust fail to cause a Fund to repay promptly
any authorized charges or advances of cash or securities, subject to the
provision of the second paragraph of this Section 8 regarding indemnification,
the Custodian shall be entitled to use available cash and to dispose of pledged
securities and property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
-------------------------------------------
The term of this Agreement shall become effective as of the date first
written above and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through August 31, 2006. Thereafter, this
Agreement shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions hereof; provided such continuance
is approved at least annually by vote or written consent of the directors,
including a majority of the trustees who are not interested persons of either
party hereto ("Independent Trustees"). This Agreement may be amended at any time
by mutual agreement of the parties hereto and may be terminated by either party
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, however that the Custodian shall not
act under Section 2.12 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of the
Trust has approved the initial use of a particular Securities System as required
in each case by Rule 17f-4 under the 1940 Act; PROVIDED FURTHER, however, that
the Trust shall not amend or terminate this Agreement in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust and further provided, that the Trust may at any time by action of its
Board (i) substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the appropriate banking regulatory agency or upon the happening of
a like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of this Agreement, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
-------------------
If a successor custodian shall be appointed by the Board of the Trust, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder for each Fund and shall transfer to
separate accounts of the successor custodian all of each Fund's securities held
in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of the
Trust, deliver at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board shall have been delivered to the Custodian
14
on or before the date when such termination shall become effective, then the
Custodian shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $100,000,000, all securities, funds and other properties held
by the Custodian and all instruments held by the Custodian relative thereto and
all other property held by it under this Agreement for each Fund and to transfer
to separate accounts of such successor custodian all of each Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect.
11. Regulation S-P.
--------------
The parties acknowledge that Regulation S-P at 17 CFR Part 248 permits
financial institutions, such as the Trust, to disclose "nonpublic personal
information" ("NPI") of its "customers" and "consumers" (as those terms are
therein defined in Regulation S-P) to affiliated and nonaffiliated third parties
of the Trust, without giving such customers and consumers the ability to opt out
of such disclosure, for the limited purposes of processing and servicing
transactions (17 CFR ss. 248.14) ("Section 248.14 NPI"); for specified law
enforcement and miscellaneous purposes (17 CFR ss. 248.15) ("Section 248.15
NPI") ; and to service providers or in connection with joint marketing
arrangements (17 CFR ss. 248.13) ("Section 248.13 NPI"). The parties further
acknowledge that the Trust may disclose shareholder NPI to the Custodian as
agent of the Funds and solely in furtherance of fulfilling the Custodian's
contractual obligations under the Agreement in the ordinary course of business
to support the Funds and their shareholders.
The Custodian hereby agrees to be bound to use and redisclose such NPI
only for the limited purpose of fulfilling its duties and obligations under the
Agreement, for law enforcement and miscellaneous purposes as permitted in 17 CFR
ss. 248.15, or in connection with joint marketing arrangements that the Trust
may establish with the Custodian in accordance with the limited exception set
forth in 17 CFR ss. 248.13.
The Custodian further represents and warrants that, in accordance with 17
CFR ss. 248.30, it has implemented, and will continue to carry out for the term
of the Agreement, policies and procedures reasonably designed to: (a) insure the
security and confidentiality of records and NPI of Fund shareholders; (b)
protect against any anticipated threats or hazards to the security or integrity
of Fund shareholder records and NPI; (c) protect against unauthorized access to
or use of such Fund shareholder records or NPI that could result in substantial
harm or inconvenience to any Fund shareholder.
15
The Custodian may redisclose Section 248.13 NPI only to: (a) the Funds and
affiliated persons of the Funds ("Fund Affiliates"); (b) affiliated persons of
the Custodian ("Custodian Affiliates") (which in turn may disclose or use the
information only to the extent permitted under the original receipt); (c) a
third party not affiliated with the Custodian of the Funds ("Nonaffiliated Third
Party") under the service and processing (ss.248.14) or miscellaneous
(ss.248.15) exceptions, but only in the ordinary course of business to carry out
the activity covered by the exception under which the Custodian received the
information in the first instance; and (d) a Nonaffiliated Third Party under the
Custodian and joint marketing exception (ss.248.13), provided the Custodian
enters into a written contract with the Nonaffiliated Third Party that prohibits
the Nonaffiliated Third Party from disclosing or using the information other
than to carry out the purposes for which the Funds disclosed the information in
the first instance.
The Custodian may redisclose Section 248.14 NPI and Section 248.15 NPI to:
(a) the Funds and Fund Affiliates; (b) Custodian Affiliates (which in turn may
disclose the information to the same extent permitted under the original
receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully
have disclosed NPI directly.
The Custodian is obligated to maintain beyond the termination date of the
Agreement the confidentiality of any NPI it receives from the Fund in connection
with the Agreement or any joint marketing arrangement, and hereby agrees that
this Amendment shall survive such termination.
12. Interpretive and Additional Provisions.
--------------------------------------
In connection with the operation of this Agreement, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
13. Massachusetts Law to Apply.
--------------------------
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
14. Matters Relating to the Trust as a Massachusetts Business Trust.
---------------------------------------------------------------
It is expressly agreed that the obligations of Regions Funds hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Board, and this Agreement has been signed and delivered by an
authorized officer of the Trust acting as such, and neither such authorization
by the Board nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Trust as provided
in the Trust's Declaration of Trust.
16
15. Notices.
-------
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, or to the Custodian at 000 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, or to such other address as the Trust or the
Custodian may hereafter specify, shall be deemed to have been properly delivered
or given hereunder to the respective address.
16. Counterparts.
------------
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
17. Limitations of Liability.
------------------------
The Custodian is expressly put on notice of the limitation of liability as
set forth in Article XI of the Declaration of Trust and 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 8 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 reasons, 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.
17
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative as of the
date first written above.
REGIONS XXXXXX XXXXXX SELECT
FUNDS
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxxxx
Title: Secretary and Assistant Treasurer
REGIONS BANK
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxx
Title: Vice President
18
SCHEDULE A
----------
FUNDS
-----
Regions Xxxxxx Xxxxxx Select Growth Fund
Regions Xxxxxx Xxxxxx Select Value Fund
Regions Xxxxxx Xxxxxx Select Mid Cap Growth Fund
Regions Xxxxxx Xxxxxx Select Mid Cap Value Fund
Regions Xxxxxx Xxxxxx Select Balanced Fund
Regions Xxxxxx Xxxxxx Select Fixed Income Fund
Regions Xxxxxx Xxxxxx Select Intermediate Bond Fund
Regions Xxxxxx Xxxxxx Select Limited Maturity Government Fund
Regions Xxxxxx Xxxxxx Select Treasury Money Market Fund
Regions Xxxxxx Xxxxxx Select Government Money Market Fund
Regions Xxxxxx Xxxxxx Select LEADER Growth Equity Fund
Regions Xxxxxx Xxxxxx Select LEADER Growth & Income Fund
Regions Xxxxxx Xxxxxx Select LEADER Balanced Fund
Regions Xxxxxx Xxxxxx Select LEADER Intermediate Bond Fund
Regions Xxxxxx Xxxxxx Select LEADER Tax Exempt Bond Fund
Regions Xxxxxx Xxxxxx Select LEADER Money Market Fund
Regions Xxxxxx Xxxxxx Select LEADER Tax Exempt Money Market Fund
SCHEDULE B
----------
FEE SCHEDULE
------------
--------------------------------------------------------------------------------
NET ASSETS CUSTODY FEE RATE PER FUND
---------- (PERCENTAGE OF NET ASSETS)
(ANNUALIZED)
------------
--------------------------------------------------------------------------------
$0 - $50 million .0250%
--------------------------------------------------------------------------------
$50 million - $200 million .0200%
--------------------------------------------------------------------------------
$200 million - $300 million .0150%
--------------------------------------------------------------------------------
$300 million - $400 million .0100%
--------------------------------------------------------------------------------
Over $400 million .0050%
--------------------------------------------------------------------------------
