CUSTODY AGREEMENT
BETWEEN
US BANK, N.A.
AND
STOCKCAR STOCKS MUTUAL FUND, INC.
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. 5
II. B. Acceptance of Custodian. 5
II. C. Documents to be Furnished. 5
II. D. Notice of Appointment of Dividend and Transfer Agent. 5
ARTICLE III - Receipt of Company Assets
III. A. Delivery of Moneys. 6
III. B. Delivery of Securities. 6
III. C. Payments for Shares. 6
III. D. Duties Upon Receipt. 7
ARTICLE IV - Disbursement of Company Assets
IV. A. Declaration of Dividends by Company. 7
IV. B. Segregation of Redemption Proceeds. 7
IV. C. Disbursements of Custodian. 8
IV. D. Payment of Custodian Fees. 8
ARTICLE V - Custody of Company Assets
V. A. Separate Accounts for Each Fund. 8
V. B. Segregation of Non-Cash Assets. 9
V. C. Securities in Bearer and Registered Form. 9
V. D. Duties of Custodian as to Securities. 9
V. E. Certain Actions Upon Written Instructions. 10
V. F. Custodian to Deliver Proxy Materials. 11
V. G. Custodian to Deliver Tender Offer Information. 11
V. H. Custodian to Deliver Security and Transaction Information. 12
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 12
VI. B. Sale of Securities. 13
VI. C. Delivery Versus Payment for Purchases and Sales. 14
VI. D. Payment on Settlement Date. 14
VI. E. Segregated Accounts. 14
VI. F. Advances for Settlement. 16
ARTICLE VII - Company Indebtedness
VII. A. Borrowings. 17
VII. B. Advances. 18
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 18
VIII. B. Actions not Required by Custodian. 20
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer Agent. 21
VIII. D. No Enforcement Actions. 21
VIII. E. Authority to Use Agents and Sub-Custodians. 22
VIII. F. No Duty to Supervise Investments. 22
VIII. G. All Records Confidential. 23
VIII. H. Compensation of Custodian. 23
VIII. I. Reliance Upon Instructions. 23
VIII. J. Books and Records. 24
VIII. K. Internal Accounting Control Systems. 24
VIII. L. No Management of Assets by Custodian. 24
VIII. M. Assistance to Company. 25
ARTICLE IX - Termination
IX. A. Termination. 25
IX. B. Failure to Designate Successor Custodian. 26
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 27
XI. B. Limitation of Personal Liability. 27
XI. C. Authorization By Board. 28
XI. D. Custodian's Consent to Use of Its Name. 28
XI. E. Notices to Custodian. 29
XI. F. Notices to Company. 29
XI. G. Amendments In Writing. 29
XI. H. Successors and Assigns. 29
XI. I. Governing Law. 29
XI. J. Jurisdiction. 30
XI. K. Counterparts. 30
XI. L. Headings. 30
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the 1st day of
November, 2004, by and between StockCar Stocks Mutual Fund, Inc., a Maryland
Corporation (the "Company") and US Bank, National Association, (the
"Custodian"), a national banking association having its principal office at 000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, 00000.
WHEREAS, the Company and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Company as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Company 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 and Exchange Act of 1934, as amended.
Authorized Person - any person, whether or not any such person is an
officer or employee of the Company, who is duly authorized by the Board of
Directors of the Company to give Oral Instructions and Written Instructions on
behalf of the Company or any Fund, and named in Appendix A attached hereto and
as amended from time to time by resolution of the Board of Directors, certified
by an Officer, and received by the Custodian.
Board of Directors - the Directors from time to time serving under the
Company's By-Laws and Articles of Incorporation, 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 Company computes the net
asset value of Shares of any fund.
Company - the corporation organized under the laws of Maryland, which is
an open-end diversified management investment company registered under the Act.
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 Directors, 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 Company.
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 Company 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 Company 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, 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 Company.
Oral Instructions - instructions orally transmitted to and received by
the Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Company's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures,
corporate debt securities, mortgages, bank certificates of deposit, bankers'
acceptances, mortgage-backed securities or other obligations and any
certificates, receipts, warrants, or other instruments or documents
representing rights to receive, purchase, or subscribe for the same or
evidencing or representing any other rights or interest therein, or any similar
property or assets, 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 Company on account of such Fund.
Written Instructions - communications in writing actually received by
the Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Directors and the resolution is certified by an Officer and delivered
to the Custodian). All written communications shall be directed to the
Custodian, attention: Mutual Fund Custody Department.
ARTICLE II
APPOINTMENT; ACCEPTANCE; AND FURNISHING OF DOCUMENTS
II. A.Appointment of Custodian. The Company hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Company 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
the Agreement, to the Custodian by the Company:
1. A copy of the Articles of Incorporation of the Company certified by the
Secretary.
2. A copy of the By-Laws of the Company certified by the Secretary.
3. A copy of the resolution of the Board of Directors of the Company
appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. Certificate of the President and Secretary of the Company setting forth the
names and signatures of all Authorized Persons.
II. D. Notice of Appointment of Dividend and Transfer Agent. The
Company 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 COMPANY ASSETS
III. X.Xxxxxxxx of Moneys. During the term of this Agreement, the
Company will deliver or cause to be delivered to the Custodian all moneys to be
held by the Custodian for the account of any Fund. The Custodian shall be
entitled to reverse any deposits made on any Fund's behalf where such deposits
have been entered and moneys are not finally collected within 30 days of the
making of such entry.
III. X.Xxxxxxxx of Securities. During the term of this Agreement, the
Company will deliver or cause to be delivered to the Custodian all Securities
to be held by the Custodian for the account of any Fund. The Custodian will
not have any duties or responsibilities with respect to such Securities until
actually received by the Custodian. The Custodian is hereby authorized by the
Company, acting on behalf of the 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 Company 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.
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 Company's
distributor or Dividend and Transfer Agent or from the Company 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.
ARTICLE IV
DISBURSEMENT OF COMPANY ASSETS
IV. A. Declaration of Dividends by Company. The Company shall furnish
to the Custodian a copy of the resolution of the Board of Directors of the
Company, certified by the Company's Secretary, either (i) setting forth the
date of the declaration of any dividend or distribution in respect of Shares of
any Fund of the Company, 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 Certificate
directing payment and setting forth the name and address of the person to whom
such payment is to be made, the amount of such payment, the name of the Fund
from which payment is to be made, and the purpose for which payment is to be
made, the Custodian shall disburse amounts as and when directed from the assets
of that Fund. The Custodian is authorized to rely on such directions and shall
be under no obligation to inquire as to the propriety of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written Instructions
directing payment, the Custodian shall disburse moneys from the assets of the
Company in payment of the Custodian's fees and expenses as provided in Article
VIII hereof.
ARTICLE V
CUSTODY OF COMPANY 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 Company coupled with the name of such Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of this
Agreement, and shall hold all cash received by it from or for the account of
the Fund, other than cash maintained by the Fund in a bank account established
and used by the Fund in accordance with Rule 17f-3 under the Act. Moneys held
by the Custodian on behalf of a Fund may be deposited by the Custodian to its
credit as Custodian in the banking department of the Custodian. Such moneys
shall be deposited by the Custodian in its capacity as such, and shall be
withdrawable by the Custodian only in such capacity.
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 the Fund may be
registered in the name of the Custodian, any sub-custodian appointed in
accordance with this Agreement, or the nominee of any of them. The Company
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 Company, with respect to all Securities held for the Company, the
Custodian shall on a timely basis (concerning items 1 and 2 below, as defined
in the Custodian's Standards of Service Guide, as amended from time to time,
annexed hereto as Appendix D):
1.) Collect all income due and payable with
respect to such Securities;
2.) Present for payment and collect amounts
payable upon all Securities which may mature or be called,
redeemed, or retired, or otherwise become payable;
3.) Surrender interim receipts or
Securities in temporary form for Securities in definitive
form; and
4.) Execute, as Custodian, any necessary
declarations or certificates of ownership under the Federal
income tax laws or the laws or regulations of any other
taxing authority, including any foreign taxing authority,
now or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon receipt of a
Written Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as
may be designated in such Written Instructions proxies,
consents, authorizations, and any other instruments whereby
the authority of the Company 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 Company; and
5.) Deliver any Securities held for any
Fund to the depository agent for tender or other similar
offers.
V. F. Custodian to Deliver Proxy Materials. The Custodian shall
promptly deliver to the Company all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any Securities
or give any consent, waiver or approval with respect thereto unless so directed
by Written Instructions.
V. G. Custodian to Deliver Tender Offer Information. The Custodian
shall promptly deliver to the Company 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 Standards of Service Guide attached as Appendix D. If the
Company desires to take action with respect to any tender offer, exchange offer
or other similar transaction, the Company shall notify the Custodian at least
five Business Days prior to the date on which the Custodian is to take such
action. The Company 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 Company 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 Company 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 Company; it shall be sufficient to communicate by such means as
shall be mutually agreeable to the Company and the Custodian.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
VI. A.Purchase of Securities. Promptly after each purchase of
Securities by the Company, the Company 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
Company, 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.
VI. X.Xxxx of Securities. Promptly after each sale of Securities by a
Fund, the Company 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. X.Xxxxxxxx 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.
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.
VI. E.Segregated Accounts. The Custodian shall, upon receipt of Proper
Instructions so directing it, establish and maintain a segregated account or
accounts for and on behalf of a Fund. Cash and/or Securities may be
transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any
agreement among the Company, 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
Directors, 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. F.Advances for Settlement. Except as otherwise may be agreed upon
by the parties hereto, the Custodian shall not be required to comply with any
Written Instructions to settle the purchase of any Securities on behalf of a
Fund unless there is sufficient cash in the account(s) pertaining to such Fund
at the time or to settle the sale of any Securities from such an account(s)
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the
purchase of such Securities. The amount of any such advance shall be deemed a
loan from the Custodian to the Company 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
COMPANY INDEBTEDNESS
VII. A. Borrowings. In connection with any borrowings by the Company,
the Company 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 Company shall promptly deliver to the Custodian Written
Instructions specifying with respect to each such borrowing: (a) the name of
the bank or broker, (b) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note duly endorsed
by the Company, 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 Company 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 Company, such Securities as additional
collateral, as may be specified in Written Instructions, to secure further any
transaction described in this Article VII. The Company 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.
ARTICLE VIII
CONCERNING THE CUSTODIAN
VIII. A. Limitations on Liability of Custodian. 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 Company, on behalf of the Fund and only from assets of
the Fund (or insurance purchased by the Company 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 Company's duties hereunder or any
other action or inaction of the Company or its Directors, officers, employees
or agents, except such as may arise from the negligent action, omission,
willful misconduct or breach of this Agreement by the Custodian, its directors,
officers, employees or agents.. The Custodian shall defend, indemnify and hold
harmless the Company and its Directors, 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, omission or willful misconduct of the
Company, its Directors, 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 Company 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 Company, 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
Company 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 Company, 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 Company, 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 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 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
Indemnifying 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. 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 Company in respect of Shares
of any Fund;
6.) The legality of any borrowing by the
Company on behalf of the Company or any Fund, using
Securities as collateral;
7.) Whether the Company or a Fund is in
compliance with the 1940 Act, the regulations thereunder,
the provisions of the Company's charter documents 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 Company from any Dividend and
Transfer Agent of the Company nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Company of any amount
paid by the Custodian to any Dividend and Transfer Agent of the Company 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 Company
acknowledges and hereby authorizes the Custodian to hold Securities through its
various agents described in Appendix C annexed hereto. In addition, the
Company acknowledges that the Custodian may appoint one or more financial
institutions, as agent or agents or as sub-custodian or sub-custodians,
including, but not limited to, banking institutions located in foreign
countries, for the purpose of holding Securities and moneys at any time owned
by the Fund. The Custodian shall not be relieved of any obligation or liability
under this Agreement in connection with the appointment or activities of such
agents or sub-custodians. Any such agent or sub-custodian shall be qualified
to serve as such for assets of investment companies registered under the Act.
The Funds shall reimburse the Custodian for all costs incurred by the Custodian
in connection with opening accounts with any such agents or sub-custodians.
Upon request, the Custodian shall promptly forward to the Company any documents
it receives from any agent or sub-custodian appointed hereunder which may
assist Directors of registered investment companies to fulfill their
responsibilities under Rule 17f-5 of the Act.
VIII. F. No Duty to Supervise Investments. The Custodian shall not be
under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Company are such as properly
may be held by the Company under the provisions of the Articles of
Incorporation and the Company's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat all
records and other information relating to the Company and the assets of all
Funds as confidential and shall not disclose any such records or information to
any other person unless (i) the Company shall have consented thereto in writing
or (ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled to
receive and the Company 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 Company. 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 be entitled to reimbursement under the
provisions of this Agreement as determined by agreement of the Custodian and
the Company 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. I. Reliance Upon Instructions. The Custodian shall be entitled
to rely upon any Proper Instructions if such reliance is made in good faith.
The Company 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 Company 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 Company. The
Company agrees that the Custodian shall incur no liability to the Company for
acting upon Oral Instructions given to the Custodian hereunder concerning such
transactions.
VIII. J. Books and Records. The Custodian will (i) set up and maintain
proper books of account and complete records of all transactions in the
accounts maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Company, 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 Company, and shall be
available, upon request, for inspection by duly authorized officers, employees
or agents of the Company and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian shall send
to the Company any report received on the systems of internal accounting
control of the Custodian, or its agents or sub-custodians, as the Company may
reasonably request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian performs
only the services of a custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities or other assets from
time to time owned by any Fund. The Custodian is not a selling agent for
Shares of any Fund and performance of its duties as custodian shall not be
deemed to be a recommendation to any Fund's depositors or others of Shares of
the Fund as an investment. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
VIII. M. Assistance to Company. The Custodian shall take all
reasonable action, that the Company may from time to time request, to assist
the Company in obtaining favorable opinions from the Company'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.
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 Company, it
shall be accompanied by a copy of a resolution of the Board of Directors of the
Company, certified by the Secretary of the Company, electing to terminate this
Agreement and designating a successor custodian or custodians each of which
shall be a bank or trust company having not less than $100,000,000 aggregate
capital, surplus, and undivided profits. In the event such notice is given by
the Custodian, the Company shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of the Board of Directors of the Company,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Company. In the absence of such designation by the
Company, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received a
notice of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and monies then owned by the
Fund and held by it as Custodian. Upon termination of this Agreement, the
Company shall pay to the Custodian on behalf of the Company such compensation
as may be due as of the date of such termination. The Company agrees on behalf
of the Company that the Custodian shall be reimbursed for its reasonable costs
in connection with the termination of this Agreement.
IX. B.Failure to Designate Successor Custodian. If a successor
custodian is not designated by the Company, or by the Custodian in accordance
with the preceding paragraph, or the designated successor cannot or will not
serve, the Company shall, upon the delivery by the Custodian to the Company of
all Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Company) and moneys then owned by the Company, be
deemed to be the custodian for the Company, and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book-Entry System, which
cannot be delivered to the Company, which shall be held by the Custodian in
accordance with this Agreement.
ARTICLE X
FORCE MAJEURE
Neither the Custodian nor the Company shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; 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 Company. The Company 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, Company, past, present or future
as such, of the Company or of any predecessor or successor, either directly or
through the Company 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 Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the organizers,
shareholders, officers, or Directors of the Company 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.Authorization By Board. The obligations set forth in this
Agreement as having been made by the Company have been made by the Board of
Directors, acting as such Directors for and on behalf of the Company, pursuant
to the authority vested in them under the laws of the State of Maryland, the
Articles of Incorporation and the By-Laws of the Company. This Agreement has
been executed by Officers of the Company as officers, and not individually, and
the obligations contained herein are not binding upon any of the Directors,
Officers, agents or holders of shares, personally, but bind only the Company
and then only to the extent of the assets of the Company.
XI. D. Custodian's Consent to Use of Its Name. The Company 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. E.Notices to Custodian. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at 425 Walnut .Street, M. L. 6118, Xxxxxxxxxx, Xxxx 00000,
attention Mutual Fund Custody Department, or at such other place as the
Custodian may from time to time designate in writing.
XI. F.Notices to Company. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Company shall be
sufficiently given when delivered to the Company or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid
and addressed to the Company at its office at 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, XX
00000 or at such other place as the Company may from time to time designate in
writing.
XI. G. Amendments In Writing. This Agreement, with the exception of
the Appendices, may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of
Directors of the Company.
XI. H. Successors and Assigns. This Agreement shall extend to and
shall be binding upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Company or by the Custodian, and no attempted assignment by the Company or the
Custodian shall be effective without the written consent of the other party
hereto.
XI. I.Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Ohio.
XI. J.Jurisdiction. Any legal action, suit or proceeding to be
instituted by either party with respect to this Agreement shall be brought by
such party exclusively in the courts of the State of Ohio or in the courts of
the United States for the Southern District of Ohio, and each party, by its
execution of this Agreement, irrevocably (i) submits to such jurisdiction and
(ii) consents to the service of any process or pleadings by first class U.S.
mail, postage prepaid and return receipt requested, or by any other means from
time to time authorized by the laws of such jurisdiction.
XI. K. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XI. L.Headings. The headings of paragraphs in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year FIRST above written.
WITNESS: COMPANY:
STOCKCAR STOCKS MUTUAL FUND, INC.
__________________________ By:_/s/ Xxxxx
Westcott_________________________
WITNESS: CUSTODIAN:
US Bank, N.A.
___________________________ By:_____________________________________
Title:_______________________________________
APPENDIX A
Authorized Persons Specimen Signatures
Chairman: __________________
__________________________________
President: _________________ __________________________________
Secretary: _________________ __________________________________
Treasurer: _________________ __________________________________
Assistant
Secretary: _________________ _________________________________
Assistant
Treasurer: __________________
__________________________________
Adviser Employees: __________________
__________________________________
__________________
__________________________________
Transfer Agent/Fund Accountant
Employees: _______________
__________________________________
________________
__________________________________
________________
__________________________________
__________________
__________________________________
* Authority restricted; does not include:
______________________________________
APPENDIX B
Series of the Company
StockCar Stocks Index Fund
APPENDIX C
AGENTS OF THE CUSTODIAN
The following agents are employed currently by US Bank, N.A. for
securities processing and control ...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bank of New York
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(For Foreign Securities and certain non-DTC eligible
Securities)
