Exhibit 8
CUSTODIAN AGREEMENT
This agreement is made as of _____________________, 19___, by and between
Cortland Trust, a (name of state or other jurisdiction) corporation [ a (name of
state or other jurisdiction) business trust],* with its principal office located
at Hackensack, New Jersey (the "Fund"), and Bank One Trust Company, N.A., with
its principal offices located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000
("Custodian").
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints and Custodian hereby
accepts such appointment by the Fund as custodian for all of the Fund's bonds,
debentures, notes, stocks, shares and other securities (excluding Shares, as
defined below) (collectively, "Securities") and cash on the terms and conditions
set forth in this agreement.
2. DELIVERY OF PROPERTY. The Fund shall deliver to Custodian all Securities
and cash owned by it and all payments of income, principal or capital
distributions received by it with respect to all such Securities from time to
time, and the cash consideration received by the Fund for such shares of common
stock [beneficial interest] of the Fund (the "Shares") to be issued or sold by
the Fund from time to time. Custodian shall have no duties, obligations or
liability or any property held or received by the Fund which has not been
delivered to Custodian.
3. BANK ACCOUNTS. Custodian shall open and maintain a separate bank account
or accounts in the name of the Fund, subject only to draft or order by Custodian
pursuant to the terms of this agreement, and shall maintain in each account or
accounts all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund pursuant to Rule 17f-3 promulgated under the
Investment Company Act of 1940 (the "'40 Act"). Custodian may deposit the
Property, other than cash:
(a) in the banking department of Custodian;
(b) in such other banks or trust companies as Custodian may deem
appropriate;
(c) in its accounts with a clearing agency registered with the
Securities and Exchange Commission (the "Commission") under Section 17A of
the Securities Exchange Act of 1934 (the "Exchange Act"), which acts
*NOTE: Language in square brackets would replace immediately preceding language
if client is a business trust rather than a corporation. Appropriate
alternative revisions will be required throughout if a different legal
entity, e.g. a partnership, is involved.
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as a securities depository (the "Securities Depository"); or
(d) in a book-entry account which if maintained for the Custodian by a
Federal Reserve Bank (the "Book Entry Account").
So long as Custodian maintains any account pursuant to subsections (c)
and (d) above for the Fund, Custodian shall:
(i) deposit the Securities in such an account that includes only
assets held for the Fund for its customers;
(ii) send the Fund confirmation of any transfers to or from the
account maintained for the Fund;
(iii) with respect to Securities transferred to the account of the
Fund, identify as belonging to the Fund a quantity of such Securities in
the fungible bulk of Securities (A) registered in the name of Custodian or
its nominee, or (B) shown on Custodian's account on the books of the
Securities Depository, the Book-Entry Account, or Custodian's agent;
(iv) promptly send to the Fund reports it receives from the
appropriate Federal Reserve Bank or Securities Depository on its system of
internal accounting control; and
(v) send to the Fund such reports of the systems of internal
accounting control of Custodian and its agents through which such
securities are deposited as are available and as the Fund may reasonably
request from time to time.
4. PROPER INSTRUCTIONS. For the purpose of this agreement, "proper
instructions" shall mean (a) any oral authorizations, instructions or approvals
of any kind transmitted to Custodian in person or by telephone, telegram,
telecopy or other mechanical or documentary means, lacking original signature,
by a person believed in good faith by Custodian to be a person authorized by a
resolution of the Board of Directors [Trustees] of the Fund to give such
authorization, instructions or approvals on behalf of the Fund, or (b) any
authorization, instruction, or approval of any kind transmitted to Custodian in
an original writing containing original signatures or a copy of such document
transmitted by telecopy including transmission of such signature, believed in
good faith by Custodian to be the signature of a person authorized by a
resolution of the Board of Directors
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[Trustees] of the Fund to give proper instruction on behalf of the Fund.
5. PAYMENTS FOR SHAREs. Custodian shall receive from the distributor of the
Fund's Shares or from the transfer agent of the Fund (the "Transfer Agent")
payment for Shares of the Fund issued or sold from time to time by the Fund.
Such payment will be made available to the Fund in federal funds as of specified
tines agreed upon from time to time by the Fund and Custodian.
6. COLLECTION OF INCOME. Custodian shall collect all income and other
payments with respect to registered Securities held hereunder to which the Fund
shall be entitled by law or pursuant to custom in the securities business, and
shall collect all income and other payments with respect to bearer Securities
if, on the date of payment by the issuer, such Securities are held by Custodian
or agent thereof, and shall deposit such income, as collected, into the Fund's
account. Without limiting the generality of the foregoing. Custodian shall
detach and present for payment all coupons and other income items requiring
presentation as and when they become due, shall collect dividends and interest
when due on Securities held hereunder, and shall endorse and deposit for
collection, in the name of the Fund, checks, drafts, and other negotiable
instruments on the same day as received.
With respect to Securities of foreign issuers, while Custodian will use its
best efforts to collect any monies which may to its knowledge become collectible
arising from such Securities, including dividends, interest and other income,
and to notify the Fund of any call for redemption, offer of exchange, right of
subscription, reorganization or other proceedings affecting such Securities, it
is understood that Custodian shall be under no responsibility except as it
relates to its responsibilities pursuant to this agreement for any failure or
delay in effecting such collections or giving such notices.
Custodian shall not be under any obligation or duty to take action to
effect collection of any amount, if the Securities (domestic or foreign) on
which such amount is payable are in default and payment is refused after due
demand or presentation. Custodian will, however, promptly notify the Fund in
writing of such default and refusal to pay.
7. PAYMENT OF FUND MONIES. Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties. Custodian
shall pay out monies of the Fund in the following cases only:
(a) Upon the purchase of Securities for the account of the Fund but
only (i) against the delivery of such Securities to Custodian (or any bank,
banking fire or trust company doing business in the United
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States or abroad which is qualified under the '40 Act to act as a custodian
and has been designated by Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee of the Fund
or in the name of a nominee of Custodian referred to in 9 below or in
proper for a for transfer; (ii) in the case of a purchase effected through
a Securities Depository, in accordance with the conditions set forth in 3
above or (iii) in the case of repurchase agreements entered into between
the Fund and another bank or broker-dealer, against delivery of Securities
either in certificate for a or through an entry crediting Custodian's
account at the Federal Reserve Bank with such securities.
(b) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in 8(b) of this agreement;
(c) For the redemption or repurchase of Shares issued by the Fund as
set forth in 10 hereof:
(d) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the
Fund: interest, taxes, management, accounting, transfer agent and legal
fees, distribution plan payments and other operating expenses of the Fund:
(e) For the payment of any dividends or other distributions declared
pursuant to the governing documents of the Fund; and
(f) For any other proper purposes of the Fund, bet only upon receipt
of a certified resolution of the Board of Directors [Trustees] of the Fund
specifying the amount of such payment, setting forth the purpose for which
such payment if to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whoa such payment is to be made.
8. DUTIES OF CUSTODIAN WITH RESPECT TO SECURITIES OF THE FUND HELD BY
CUSTODIAN.
(a) HOLDING SECURITIES. Custodian shall hold and physically segregate
for the account of the Fund all Securities owned by the Fund other than
Securities held is a Securities Depository or Book Entry Account, as
provided in 3 of this agreement.
(b) DELIVERY OF SECURITIES. Custodian shall release and deliver
Securities owned by the Fund held by Custodian or in a Securities
Depository or Book Entry Account for Custodian only upon receipt of proper
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instructions. which nay be continuing instructions when deemed appropriate
by the parties, and only in the following cases:
(i) Upon the sale of such Securities for the account of the Fund
and the receipt of payment therefor;
(ii) Upon the receipt of payment in connection with any
repurchase agreement related to such Securities entered into by the
Fund;
(iii) In the case of a sale effected through a Securities
Depository or Book Entry Account, in accordance with the provisions of
3 of this agreement;
(iv) In connection with tender or other similar offers for
Securities owned by the Fund, provided that, in any such case, the
cash or other consideration is to be delivered to Custodian;
(v) 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 Custodian;
(vi) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees of
Custodian, or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face
amount or number of units, or for exchange of interim receipts or
temporary securities for definitive securities, provided that, in any
such case, the new Securities are to be delivered to Custodian;
(vii) To the broker selling the same for examination in
accordance with 'street delivery' custom provided that Custodian may
adopt such procedures to ensure their prompt return to Custodian by
the broker in the event the broker elects not to accept them:
(viii) 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, provided that,
in any such case, the new Securities and cash, if any, are to be
delivered to Custodian.
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(ix) In the case of warrants, rights or similar Securities, the
surrender thereof upon 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 Custodian:
(x) For delivery in connection with any loans of Securities made
by the Fund, but only against receipt of adequate collateral as
specified from time to time by action of the Board of Directors
[Trustees] of the Fund;
(xi) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Fund but only against
receipt of amounts borrowed;
(xii) For delivery in accordance with the provisions of any
agreement among the Fund, Custodian and a broker-dealer registered
under 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 (the "O.C.C") and of any
registered national securities exchange or any similar organization,
regarding escrow or other arrangements in connection with transactions
of the Fund:
(xiii) Upon receipt of instructions from the Transfer Agent for
the Fund, for delivery to such Transfer Agent or to holders of Shares
in connection with distributions in kind, as may be described form
time to time in one or more currently effective prospectuses of the
Fund. in satisfaction of requests by holders of Shares for repurchase
or redemption; and
(xiv) For any other proper purpose of the Fund, but only upon
receipt of a certified resolution of the Board of Directors [Trustees]
of the Fund 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 purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
9. REGISTRATION OF SECURITIES. Securities held by Custodian (other than
bearer Securities) shall be registered in
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the name of the Fund or in the name of any nominee of the Fund or of any nominee
of Custodian which nominee shall be assigned exclusively to the Fund, unless the
Fund has authorized in writing the appointment of a nominee to be used in common
with other registered investment companies having the same investment adviser as
the Fund. All Securities accepted by Custodian on behalf of the Fund under the
terms of this agreement shall be in "street name" or other good delivery form.
10. PAYMENTS FOR REDEMPTION FOR SHARES OF THE FUND. From such assets of the
Fund as may be available for the purpose but subject to the limitations of this
agreement and of the Articles of Incorporation [Declaration of Trust] and
By-Laws of the Fund, Custodian shall, upon receipt of instructions from the
Transfer Agent, make assets of the Fund available for payment to holders of
Shares who have delivered to the Transfer Agent a request for redemption or
repurchase of their Shares. In connection with the redemption or repurchase of
Shares, Custodian is authorized upon receipt of written instructions from the
Transfer Agent to wire monies to a commercial bank designated by a redeeming
shareholder.
11. SEGREGATED ACCOUNT. Custodian shall upon receipt of proper instructions
establish and maintain a segregated account or accounts for and on behalf of the
Fund, into which account or accounts may be transferred cash and/or Securities,
including Securities maintained in an account by the Custodian pursuant to 3 of
this agreement (a) in accordance with the provisions of any agreement among the
Fund, Custodian and a dealer or broker which is registered under the Exchange
Act and is a member in good standing of the NASD relating to compliance with the
rules of the O.C.C. and of any registered national securities exchange, or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund; (b) for purposes of
segregating cash or government securities in connection with options purchased
or written by the Fund or commodity futures contracts or options thereon
purchased, sold, or written by the Fund: and (c) for other proper purposes, but
only. in the case of clause
