EXHIBIT (G)(3)
CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this 31 day of July, 2005,
by and between XXXXXXXX XXXXX FUNDS, INC., a Wisconsin Corporation (the
"Corporation") and U.S. BANK NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of
America with its principal place of business at Cincinnati, Ohio (the
"Custodian").
WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the"1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the 1940 Act; and
WHEREAS, the Corporation desires to retain the Custodian to act as
custodian of the cash and securities of each series of the Corporation listed on
Exhibit C hereto (as amended from time to time) (each a "Fund" and collectively,
the "Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings set forth below unless the context otherwise requires:
1.1 "Authorized Person" means any Officer or other person duly
authorized by resolution of the Board of Directors to give Oral
Instructions and Written Instructions on behalf of the Fund and
named in Exhibit A hereto or in such resolutions of the Board of
Directors, certified by an Officer, as may be received by the
Custodian from time to time.
1.2 "Board of Directors" shall mean the directors from time to time
serving under the Corporation's declaration of incorporation, as
amended from time to time.
1.3 "Book-Entry System" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in
Subpart B of 31 CFR Part 350, or in such book-entry regulations of
federal agencies as are substantially in the form of such Subpart O.
1.4 "Business Day" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc., and any other day for which the
Corporation computes the net asset value of Shares of each Fund.
1.5 "Fund Custody Account" shall mean any of the accounts in the name of
the Corporation, which is provided for in Section 3.2 below.
1.6 "IRS" shall mean the Internal Revenue Service.
1.7 "NASD" shall mean The National Association of Securities Dealers,
Inc.
1.8 "Officer" shall mean the Chairman, President, any Vice President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer of the
Corporation.
1.9 "Oral Instructions" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i)
reasonably believed by the Custodian to have been given by any two
Authorized Persons, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business, and (iii) orally
confirmed by the Custodian. The Corporation shall cause all Oral
Instructions to be confirmed by Written Instructions prior to the
end of the next Business Day. If such Written Instructions
confirming Oral Instructions are not received by the Custodian prior
to a transaction, it shall in no way affect the validity of the
transaction or the authorization thereof by the Corporation. If Oral
Instructions vary from the Written Instructions that purport to
confirm them, the Custodian shall notify the Corporation of such
variance but such Oral Instructions will govern unless the Custodian
has not yet acted.
1.10 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.11 "SEC" shall mean the Securities and Exchange Commission.
1.12 "Securities" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, 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 interests therein, or any similar
property or assets that the Custodian has the facilities to clear
and service.
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1.13 "Securities Depository" shall mean The Depository Corporation
Company and any other clearing agency registered with the SEC under
Section 17A of the Securities Exchange Act of 1934, as amended (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.
1.14 "Shares" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Corporation on account of the Fund.
1.15 "Sub-Custodian" shall mean and include (i) any branch of a "U.S.
bank," as that term is defined in Rule 17f-5 under the 1940 Act, and
(ii) any "eligible foreign custodian," as that term is defined in
Rule 17f-5 under the 1940 Act, having a contract with the Custodian
which the Custodian has determined will provide reasonable care of
assets of a Fund based on the standards specified in Section 3.3
below. Such contract shall be in writing and shall include
provisions that provide: (i) for indemnification or insurance
arrangements (or any combination of the foregoing) such that the
Fund will be adequately protected against the risk of loss of assets
held in accordance with such contract; (ii) that the Fund's assets
will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of the Sub-Custodian or its creditors
except a claim of payment for their safe custody or administration,
in the case of cash deposits, liens or rights in favor of creditors
of the Sub-Custodian arising under bankruptcy, insolvency, or
similar laws; (iii) that beneficial ownership for the Fund's assets
will be freely transferable without the payment of money or value
other than for safe custody or administration; (iv) that adequate
records will be maintained identifying the assets as belonging to
the Fund or as being held by a third party for the benefit of the
Fund; (v) that the Fund's independent public accountants will be
given access to those records or confirmation of the contents of
those records; and (vi) that the Fund will receive periodic reports
with respect to the safekeeping of the Fund's assets, including, but
not limited to, notification of any transfer to or from a Fund's
account or a third party account containing assets held for the
benefit of the Fund. Such contract may contain, in lieu of any or
all of the provisions specified in (i)-(vi) above, such other
provisions that the Custodian determines will provide, in their
entirety, the same or a greater level of care and protection for
Fund assets as the specified provisions.
1.16 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by any two Authorized
Persons, (ii) communications by telex or any other such system from
one or more persons reasonably believed by the Custodian to be
Authorized Persons, or (iii) communications between
electro-mechanical or electronic devices provided that the use of
such devices and the procedures for the use thereof shall have been
approved by resolutions of the Board of Directors, a copy of which,
certified by an Officer, shall have been delivered to the Custodian.
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ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Corporation hereby appoints the Custodian as
custodian of all Securities and cash owned by or in the possession
of the Funds at any time during the period of this Agreement, on the
terms and conditions set forth in this Agreement, and the Custodian
hereby accepts such appointment and agrees to perform the services
and duties set forth in this Agreement. The services and duties of
the Custodian shall be confined to those matters expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Custodian hereunder.
2.2 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 Corporation:
(a) A copy of the Corporation's declaration of incorporation,
certified by the Secretary;
(b) A copy of the Corporation's bylaws, certified by the
Secretary;
(c) A copy of the resolution of the Board of Directors of the
Corporation appointing the Custodian, certified by the
Secretary;
(d) A copy of the current prospectus of the Fund (the
"Prospectus"); and
(e) A certification of the Chairman or the President and the
Secretary of the Corporation setting forth the names and
signatures of the current Officers of the Corporation and
other Authorized Persons.
2.3 Notice of Appointment of Transfer Agent. The Corporation agrees to
notify the Custodian in writing of the appointment, termination or
change in appointment of any transfer agent of the Funds.
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ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of each Fund (other than Securities
maintained in a Securities 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 of the Corporation) and shall
be identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of
the Corporation coupled with the name of the Fund, subject only to
draft or order of the Custodian, in which the Custodian shall enter
and carry all Securities, cash and other assets of such Fund which
are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Funds and to
carry out such other provisions of this Agreement as it may
determine; provided, however, that the appointment of any such
agents and maintenance of any Securities and cash of the Funds
shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement. The Custodian shall be liable for the actions of
any Sub-Custodians appointed by it as if such actions had been
done by the Custodian.
(b) If, after the initial approval of Sub-Custodians by the Board
of Directors in connection with this Agreement, the Custodian
wishes to appoint other Sub-Custodians to hold property of the
Funds, it will so notify the Corporation and provide it with
information reasonably necessary to determine any such new
Sub-Custodian's eligibility under Rule 17f-5 under the 1940
Act, including a copy of the proposed agreement with such
Sub-Custodian. At the meeting of the Board of Directors next
following receipt of such notice and information, the
Corporation shall give its written approval or disapproval of
the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian
acting hereunder shall contain the required provisions set
forth in Rule 17f-5(c)(2) under the 1940 Act.
(d) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Directors of
the placement of the Securities and cash of each Fund with a
particular Sub-Custodian and of any material changes in each
Fund's arrangements. The Custodian shall promptly take such
steps as may be required to withdraw assets of a Fund from any
Sub-Custodian that has ceased to meet the requirements of Rule
17f-5 under the 1940 Act.
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(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants to the Corporation that it
agrees to exercise reasonable care, prudence and diligence
such as a person having responsibility for the safekeeping of
property of a Fund. The Custodian further warrants that each
Fund's assets will be subject to reasonable care if maintained
with a Sub-Custodian, after considering all factors relevant
to the safekeeping of such assets, including, without
limitation: (i) the Sub-Custodian's practices, procedures, and
internal controls for certificated securities (if applicable),
its method of keeping custodial records, and its security and
data protection practices; (ii) whether the Sub-Custodian has
the requisite financial strength to provide reasonable care
for Fund assets; (iii) the Sub-Custodian's general reputation
and standing and, in the case of a Securities Depository, the
Securities Depository's operating history and number of
participants; and (iv) whether the Fund will have jurisdiction
over and be able to enforce judgments against the
Sub-Custodian, such as by virtue of the existence of any
offices of the Sub-Custodian in the United States or the
Sub-Custodian's consent to service of process in the United
States.
(f) The Custodian shall establish a system to monitor the
appropriateness of maintaining each Fund's assets with a
particular Sub-Custodian and the contract governing each
Fund's arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Corporation shall deliver, or
cause to be delivered, to the Custodian all of the Funds'
Securities, cash and other investment assets, including (i) all
payments of income, payments of principal and capital distributions
received by the Funds with respect to such Securities, cash or other
assets owned by the Funds at any time during the period of this
Agreement, and (ii) all cash received by the Funds for the issuance
of Shares. The Custodian shall not be responsible for such
Securities, cash or other assets until actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of each Fund in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall make use of such
Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities.
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(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or
Securities Depository which includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for
customers.
(c) The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository 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. If Securities sold by the Fund are held in a
Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that payment
for such Securities has been transferred to the Depository
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.
(e) The Custodian shall provide the Corporation with copies of any
report (obtained by the Custodian from a Book-Entry System or
Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be liable to the Corporation for any loss
or damage to the Fund resulting from (i) the use of a
Book-Entry System or Securities Depository by reason of any
negligence or willful misconduct on the part of the Custodian
or any Sub-Custodian, or (ii) failure of the Custodian or any
Sub-Custodian to enforce effectively such rights as it may
have against a Book-Entry System or Securities Depository. At
its election, the Corporation shall be subrogated to the
rights of the Custodian with respect to any claim against a
Book-Entry System or Securities Depository or any other person
from any loss or damage to the Fund arising from the use of
such Book-Entry System or Securities Depository, if and to the
extent that the Fund has not been made whole for any such loss
or damage.
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(g) With respect to its responsibilities under this Section 3.5
and pursuant to Rule 17f-4 under the 1940 Act, the Custodian
hereby warrants to the Corporation that it agrees to (i)
exercise due care in accordance with reasonable commercial
standards in discharging its duty as a securities intermediary
to obtain and thereafter maintain such assets, (ii) provide,
promptly upon request by the Corporation, such reports as are
available concerning the Custodian's internal accounting
controls and financial strength, and (iii) require any
Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain
assets corresponding to the security entitlements of its
entitlement holders.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from each
Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities,
futures contracts and options on futures contracts), against
the delivery to the Custodian (or any Sub-Custodian) of such
Securities registered as provided in Section 3.9 below or in
proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set
forth in Section 3.5 above; (ii) in the case of options on
Securities, against delivery to the Custodian (or any
Sub-Custodian) of such receipts as are required by the customs
prevailing among dealers in such options; (iii) in the case of
futures contracts and options on futures contracts, against
delivery to the Custodian (or any Sub-Custodian) of evidence
of title thereto in favor of the Fund or any nominee referred
to in Section 3.9 below; and (iv) in the case of repurchase or
reverse repurchase agreements entered into between the
Corporation and a bank which is a member of the Federal
Reserve System or between the Corporation and a primary dealer
in U.S. Government securities, against delivery of the
purchased Securities either in certificate form or through an
entry crediting the Custodian's account at a Book-Entry System
or Securities Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of Securities owned by the
Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
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(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) 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; administration,
investment advisory, accounting, auditing, transfer agent,
custodian, director and legal fees; and other operating
expenses of the Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated
as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Corporation, the Custodian and a
broker-dealer registered under the 1934 Act and a member of
the NASD, relating to compliance with 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 by the Fund;
(g) For transfer in accordance with the provisions of any
agreement among the Corporation, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term
of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of
the Board of Directors, certified by an Officer, specifying
the amount and purpose of such payment, declaring such purpose
to be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall release and deliver
Securities from each Fund Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of the Fund but
only against receipt of payment therefor in cash, by certified
or cashiers check or bank credit;
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(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian, or any
nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of 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;
(e) To the broker selling the Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or
pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of the
Fund, but only against receipt of such collateral as the
Corporation shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Corporation, but
only against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Corporation;
(l) For delivery in accordance with the provisions of any
agreement among the Corporation, the Custodian and a
broker-dealer registered under the 1934 Act and a member of
the 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 by the Fund;
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(m) For delivery in accordance with the provisions of any
agreement among the Corporation, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution
of the Board of Directors, certified by an Officer, 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.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Corporation, the Custodian shall with respect to
all Securities held for each Fund:
(a) Subject to Section 9.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled either
by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 9.4 below, collect
on a timely basis the amount payable upon all Securities which
may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) 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 now or
hereafter in effect, and prepare and submit reports to the IRS
and the Corporation at such time, in such manner and
containing such information as is prescribed by the IRS;
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(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar Securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other assets
of the Fund.
3.9 Registration and Transfer of Securities. All Securities held for the
Fund that are issued or issuable only in bearer form shall be held
by the Custodian in that form, provided that any such Securities
shall be held in a Book-Entry System if eligible therefor. All other
Securities held for the Funds may be registered in the name of the
Funds, the Custodian, a Sub-Custodian or any nominee of any of them,
or in the name of a Book-Entry System, Securities Depository or any
nominee of either thereof. The Corporation shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of
any of the nominees referred to above or in the name of a Book-Entry
System or Securities Depository, any Securities registered in the
name of the Funds.
3.10 Records.
(a) The Custodian shall maintain complete and accurate records
with respect to Securities, cash or other property held for
each Fund, including (i) journals or other records of original
entry containing an itemized daily record in detail of all
receipts and deliveries of Securities and all receipts and
disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in
physical possession, (C) monies and Securities borrowed and
monies and Securities loaned (together with a record of the
collateral therefor and substitutions of such collateral), (D)
dividends and interest received, and (E) dividends receivable
and interest receivable; and (iii) canceled checks and bank
records related thereto. The Custodian shall keep such other
books and records of the Fund as the Corporation shall
reasonably request, or as may be required by the 1940 Act,
including, but not limited to, Section 31 of the 1940 Act and
the rules promulgated thereunder.
(b) All such books and records maintained by the Custodian shall
(i) be maintained in a form acceptable to the Corporation and
in compliance with the rules and regulations of the SEC, (ii)
be the property of the Corporation and at all times during the
regular business hours of the Custodian be made available upon
request for inspection by duly authorized officers, employees
or agents of the Corporation and employees or agents of the
SEC, and (iii) if required to be maintained by the rules
promulgated under the 1940 Act, be preserved for the periods
prescribed in such rules promulgated under the 1940 Act.
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3.11 Fund Reports by Custodian. The Custodian shall furnish the
Corporation with a daily activity statement and a summary of all
transfers to or from each Fund Custody Account on the day following
such transfers. At least monthly, the Custodian shall furnish the
Corporation with a detailed statement of the Securities and moneys
held by the Custodian and the Sub-Custodians for the Fund under this
Agreement.
3.12 Other Reports by Custodian. As the Corporation may reasonably
request from time to time, the Custodian shall provide the
Corporation with reports on the internal accounting controls and
procedures for safeguarding Securities which are employed by the
Custodian or any Sub-Custodian.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the
Fund to be promptly executed by the registered holder of such
Securities, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Corporation such
proxies, all proxy soliciting materials and all notices relating to
such Securities.
3.14 Information on Corporate Actions. The Custodian shall promptly
deliver to the Corporation all information received by the Custodian
and pertaining to Securities being held by each Fund with respect to
optional tender or exchange offers, calls for redemption or
purchase, or expiration of rights as described in the Standards of
Service Guide attached as Exhibit B. If the Corporation desires to
take action with respect to any tender offer, exchange offer or
other similar transaction, the Corporation shall notify the
Custodian at least five Business Days prior to the date on which the
Custodian is to take such action. The Corporation 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.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities
for a Fund, Written Instructions shall be delivered to the
Custodian, specifying (i) the name of the issuer or writer of such
Securities, and the title or other description thereof, (ii) the
number of shares, principal amount (and accrued interest, if any) or
other units purchased, (iii) the date of purchase and settlement,
(iv) the purchase price per unit, (v) the total amount payable upon
such purchase, and (vi) the name of the person to whom such amount
is payable. The Custodian shall upon receipt of such Securities
purchased by the Fund pay out of the moneys held for the account of
the Fund the total amount specified in such Written Instructions 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 the Fund, if in the Fund Custody Account there is
insufficient cash available to the Fund for which such purchase was
made.
13
4.2 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for the purchase of Securities
for a Fund is made by the Custodian in advance of receipt of the
Securities purchased and in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to
the Fund for such payment.
4.3 Sale of Securities. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying
(i) the name of the issuer or writer of such Securities, and the
title or other description thereof, (ii) the number of shares,
principal amount (and accrued interest, if any), or other units
sold, (iii) the date of sale and settlement, (iv) the sale price per
unit, (v) the total amount payable upon such sale, and (vi) the
person to whom such Securities are to be delivered. Upon receipt of
the total amount payable to the Fund as specified in such Written
Instructions, the Custodian shall deliver such Securities to the
person specified in such Written Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in
Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or
any other provision of this Agreement, the Custodian, when
instructed to deliver Securities against payment, shall be entitled,
if in accordance with generally accepted market practice, to deliver
such Securities prior to actual receipt of final payment therefor.
In any such case, the Fund shall bear the risk that final payment
for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person
to whom they were delivered, and the Custodian shall have no
liability for any for the foregoing.
4.5 Payment for Securities Sold. In its sole discretion and from time to
time, the Custodian may credit a Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against
payment, (ii) proceeds from the redemption of Securities or other
assets of the Fund, and (iii) income from cash, Securities or other
assets of the Fund. Any such credit shall be conditional upon actual
receipt by Custodian of final payment and may be reversed if final
payment is not actually received in full. The Custodian may, in its
sole discretion and from time to time, permit the Fund to use funds
so credited to the Fund Custody Account in anticipation of actual
receipt of final payment. Any such funds shall be repayable
immediately upon demand made by the Custodian at any time prior to
the actual receipt of all final payments in anticipation of which
funds were credited to the Fund Custody Account.
14
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Corporation
to facilitate the settlement of a Fund's transactions in the Fund
Custody Account. Any such advance shall be repayable immediately
upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt of
Proper Instructions specifying that the funds are required to redeem
Shares of the Fund, the Custodian shall wire each amount specified
in such Proper Instructions to or through such bank or broker-dealer
as the Corporation may designate.
5.2 No Duty Regarding Paying Banks. Once the Custodian has wired amounts
to a bank or broker-dealer pursuant to Section 5.1 above, the
Custodian shall not be under any obligation to effect any further
payment or distribution by such bank or broker-dealer.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall 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 a Depository Account:
(a) in accordance with the provisions of any agreement among the
Corporation, the Custodian and a broker-dealer registered
under the 1934 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 by the Fund;
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by the Fund or in
connection with financial futures contracts (or options
thereon) purchased or sold by the Fund;
15
(c) which constitute collateral for loans of Securities made by
the Fund;
(d) for purposes of compliance by the Fund with requirements under
the 1940 Act for the maintenance of segregated accounts by
registered investment companies in connection with reverse
repurchase agreements and when-issued, delayed delivery and
firm commitment transactions; and
(e) for other proper corporate purposes, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors, certified by an Officer,
setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
COMPENSATION OF CUSTODIAN
The Custodian shall be compensated for providing the services set forth in
this Agreement in accordance with the fee schedule set forth on Exhibit D hereto
(as amended from time to time). The Custodian shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and delivery
charges, and reproduction charges) as are reasonably incurred by the Custodian
in performing its duties hereunder. The Corporation shall pay all such fees and
reimbursable expenses within 30 calendar days following receipt of the billing
notice, except for any fee or expense subject to a good faith dispute. The
Corporation shall notify the Custodian in writing within 30 calendar days
following receipt of each invoice if the Corporation is disputing any amounts in
good faith. The Corporation shall pay such disputed amounts within 10 calendar
days of the day on which the parties agree to the amount to be paid. With the
exception of any fee or expense the Corporation is disputing in good faith as
set forth above, unpaid invoices shall accrue a finance charge of 1 1/2% per
month after the due date. Notwithstanding anything to the contrary, amounts owed
by the Corporation to the Custodian shall only be paid out of the assets and
property of the particular Fund involved.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Corporation. The Corporation
hereby represents and warrants to the Custodian, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
16
(b) This Agreement has been duly authorized, executed and
delivered by the Corporation in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Corporation, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
8.2 Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to the Corporation, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Custodian in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Custodian, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
17
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 Standard of Care. The Custodian shall exercise reasonable care in
the performance of its duties under this Agreement. The Custodian
shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Corporation in connection with its
duties under this Agreement, except a loss arising out of or
relating to the Custodian's (or a Sub-Custodian's) refusal or
failure to comply with the terms of this Agreement (or any
sub-custody agreement) or from its (or a Sub-Custodian's) bad faith,
negligence or willful misconduct in the performance of its duties
under this Agreement (or any sub-custody agreement). The Custodian
shall be entitled to rely on and may act upon advice of legal
counsel on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. The
Custodian shall promptly notify the Corporation of any action taken
or omitted by the Custodian pursuant to advice of legal counsel.
9.2 Actual Collection Required. The Custodian shall not be liable for,
or considered to be the custodian of, any cash belonging to the
Funds or any money represented by a check, draft or other instrument
for the payment of money, until the Custodian or its agents actually
receive such cash or collect on such instrument.
9.3 No Responsibility for Title, etc. So long as and to the extent that
it is in the exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any property
or evidence of title thereto received or delivered by it pursuant to
this Agreement.
9.4 Limitation on Duty to Collect. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or
property due and payable with respect to Securities held for the
Funds if such Securities are in default or payment is not made after
due demand or presentation.
9.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in
writing received by it and reasonably believed by it to be genuine.
The Custodian shall be entitled to rely upon any Oral Instructions
and any Written Instructions actually received by it pursuant to
this Agreement.
9.6 Cooperation. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Corporation
to keep the books of account of each Fund and/or compute the value
of the assets of each Fund. The Custodian shall take all such
reasonable actions as the Corporation may from time to time request
to enable the Corporation to obtain, from year to year, favorable
opinions from the Corporation's independent accountants with respect
to the Custodian's activities hereunder in connection with (i) the
preparation of the Corporation's reports on Form N-1A and Form N-SAR
and any other reports required by the SEC, and (ii) the fulfillment
by the Corporation of any other requirements of the SEC.
18
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by Corporation. The Corporation shall indemnify and
hold harmless the Custodian, any Sub-Custodian and any nominee
thereof (each, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all claims, demands,
losses, expenses and liabilities of any and every nature (including
reasonable attorneys' fees) that an Indemnified Party may sustain or
incur or that may be asserted against an Indemnified Party by any
person arising directly or indirectly (i) from the fact that
Securities are registered in the name of any such nominee, (ii) from
any action taken or omitted to be taken by the Custodian or such
Sub-Custodian (a) at the request or direction of or in reliance on
the advice of the Corporation, or (b) upon Proper Instructions, or
(iii) from the performance of its obligations under this Agreement
or any sub-custody agreement, provided that the Custodian, any
Sub-Custodian and any nominee thereof shall not be indemnified and
held harmless from and against any such claim, demand, loss, expense
or liability arising out of or relating to its refusal or failure to
comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful misconduct
in the performance of its duties under this Agreement or applicable
law (or any sub-custody agreement). This indemnity shall be a
continuing obligation of the Corporation, its successors and
assigns, notwithstanding the termination of this Agreement. As used
in this paragraph, the terms "Custodian" and "Sub-Custodian" shall
include their respective directors, officers and employees.
10.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Corporation from and against any and all claims,
demands, losses, expenses, and liabilities of any and every nature
(including reasonable attorneys' fees) that the Corporation may
sustain or incur or that may be asserted against the Corporation by
any person arising out of any action taken or omitted to be taken by
an Indemnified Party as a result of the Indemnified Party's refusal
or failure to comply with the terms of this Agreement (or any
sub-custody agreement), or from its bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement (or
any sub-custody agreement). This indemnity shall be a continuing
obligation of the Custodian, its successors and assigns,
notwithstanding the termination of this Agreement. As used in this
paragraph, the term "Corporation" shall include the Corporation's
directors, officers and employees.
10.3 Security. If the Custodian advances cash or Securities to a Fund for
any purpose, either at the Corporation's request or as otherwise
contemplated in this Agreement, or in the event that the Custodian
or its nominee incurs, in connection with its performance under this
Agreement, any claim, demand, loss, expense or liability (including
reasonable attorneys' fees) (except such as may arise from its or
its nominee's bad faith, negligence or willful misconduct), then, in
any such event, any property at any time held for the account of the
Fund shall be security therefor, and should the Fund fail promptly
to repay or indemnify the Custodian, the Custodian shall be entitled
to utilize available cash of such Fund and to dispose of other
assets of such Fund to the extent necessary to obtain reimbursement
or indemnification.
19
10.4 Miscellaneous.
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under any
provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
(c) In order that the indemnification provisions contained in this
Article shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised
of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning
any situation that presents or appears likely to present the
probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any
claim that may be the subject of this indemnification. In the
event that the indemnitor so elects, it will so notify the
indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked
to indemnify the indemnitee except with the indemnitor's prior
written consent.
ARTICLE XI
FORCE MAJEURE
Neither the Custodian nor the Corporation 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; acts of terrorism; sabotage; strikes;
epidemics; riots; power failures; computer failure and any such circumstances
beyond its reasonable control as may cause interruption, loss or malfunction of
utility, transportation, computer (hardware or software) or telephone
communication service; accidents; labor disputes; acts of civil or military
authority; governmental actions; or inability to obtain labor, material,
equipment or transportation; provided, however, that in the event of a failure
or delay, the Custodian (i) shall not discriminate against the Funds in favor of
any other customer of the Custodian in making computer time and personnel
available to input or process the transactions contemplated by this Agreement,
and (ii) shall use its best efforts to ameliorate the effects of any such
failure or delay.
20
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Corporation, all records and other information relative to the Corporation and
prior, present, or potential shareholders of the Corporation (and clients of
said shareholders), and not to use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder, except
(i) after prior notification to and approval in writing by the Corporation,
which approval shall not be unreasonably withheld and may not be withheld where
the Custodian may be exposed to civil or criminal contempt proceedings for
failure to comply, (ii) when requested to divulge such information by duly
constituted authorities, or (iii) when so requested by the Corporation. Records
and other information which have become known to the public through no wrongful
act of the Custodian or any of its employees, agents or representatives, and
information that was already in the possession of the Custodian prior to receipt
thereof from the Corporation or its agent, shall not be subject to this
paragraph.
Further, the Custodian will adhere to the privacy policies adopted by the
Corporation pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time. In this regard, the Custodian shall have in place
and maintain physical, electronic and procedural safeguards reasonably designed
to protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the
Corporation and its shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 Effective Period. This Agreement shall become effective as of the
date first written above and will continue in effect for a period of
one year.
13.2 Termination. Subsequent to the initial one-year term, this Agreement
may be terminated by either party upon giving 90 days prior written
notice to the other party or such shorter period as is mutually
agreed upon by the parties. Notwithstanding the foregoing, this
Agreement may be terminated by any party upon the breach of the
other party of any material term of this Agreement if such breach is
not cured within 15 days of notice of such breach to the breaching
party. In addition, the Corporation may, at any time, immediately
terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by regulatory authorities
or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
21
13.3 Appointment of Successor Custodian. If a successor custodian shall
have been appointed by the Board of Directors, the Custodian shall,
upon receipt of a notice of acceptance by the successor custodian,
on such specified date of termination (i) deliver directly to the
successor custodian all Securities (other than Securities held in a
Book-Entry System or Securities Depository) and cash then owned by
the Funds and held by the Custodian as custodian, and (ii) transfer
any Securities held in a Book-Entry System or Securities Depository
to an account of or for the benefit of the Funds at the successor
custodian, provided that the Corporation shall have paid to the
Custodian all fees, expenses and other amounts to the payment or
reimbursement of which it shall then be entitled. In addition, the
Custodian shall, at the expense of the Corporation, transfer to such
successor all relevant books, records, correspondence, and other
data established or maintained by the Custodian under this Agreement
in a form reasonably acceptable to the Corporation (if such form
differs from the form in which the Custodian has maintained the
same, the Corporation shall pay any expenses associated with
transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision
for assistance from the Custodian's personnel in the establishment
of books, records, and other data by such successor. Upon such
delivery and transfer, the Custodian shall be relieved of all
obligations under this Agreement.
13.4 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Corporation on or before the date of
termination of this Agreement, then the Custodian shall have the
right to deliver to a bank or trust company of its own selection,
which bank or trust company (i) is a "bank" as defined in the 1940
Act, and (ii) has aggregate capital, surplus and undivided profits
as shown on its most recent published report of not less than $25
million, all Securities, cash and other property held by Custodian
under this Agreement and to transfer to an account of or for the
Funds at such bank or trust company all Securities of the Funds held
in a Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor
custodian under this Agreement and the Custodian shall be relieved
of all obligations under this Agreement. In addition, under these
circumstances, all books, records and other data of the Corporation
shall be returned to the Corporation.
22
ARTICLE XIV
MISCELLANEOUS
14.1 Compliance with Laws. The Corporation has and retains primary
responsibility for all compliance matters relating to the Funds,
including but not limited to compliance with the 1940 Act, the
Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the
USA Patriot Act of 2002 and the policies and limitations of the
Funds relating to its portfolio investments as set forth in its
Prospectus and statement of additional information. The Custodian's
services hereunder shall not relieve the Corporation of its
responsibilities for assuring such compliance or the Board of
Director's oversight responsibility with respect thereto.
14.2 Amendment. This Agreement may not be amended or modified in any
manner except by written agreement executed by the Custodian and the
Corporation, and authorized or approved by the Board of Directors.
14.3 Assignment. This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
the Corporation without the written consent of the Custodian, or by
the Custodian without the written consent of the Corporation
accompanied by the authorization or approval of the Board of
Directors.
14.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to
conflicts of law principles. To the extent that the applicable laws
of the State of Ohio, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with
the 1940 Act or any rule or order of the SEC thereunder.
14.5 No Agency Relationship. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other
party to this Agreement, or to conduct business in the name, or for
the account, of the other party to this Agreement.
14.6 Services Not Exclusive. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties that
are similar or identical to some or all of the services provided
hereunder.
14.7 Invalidity. Any provision of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such
case, the parties shall in good faith modify or substitute such
provision consistent with the original intent of the parties.
23
14.8 Notices. Any notice required or permitted to be given by either
party to the other shall be in writing and shall be deemed to have
been given on the date delivered personally or by courier service,
or three days after sent by registered or certified mail, postage
prepaid, return receipt requested, or on the date sent and confirmed
received by facsimile transmission to the other party's address set
forth below:
Notice to the Custodian shall be sent to:
U.S. Bank National Association
000 Xxxxxx Xxxxxx, X.X. XX-XX-X0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Facsimile: (000) 000-0000
and notice to the Corporation shall be sent to:
Xxxxxxxx Xxxxx Funds, Inc.
1200 Xxxx X. Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
14.9 Multiple Originals. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an
original, but such counterparts shall together constitute but one
and the same instrument.
14.10 No Waiver. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate
as a waiver thereof. The exercise by either party hereto of any
right hereunder shall not preclude the exercise of any other right,
and the remedies provided herein are cumulative and not exclusive of
any remedies provided at law or in equity.
14.11 References to Custodian. The Corporation shall not circulate any
printed matter which contains any reference to Custodian without the
prior written approval of Custodian, excepting printed matter
contained in the prospectus or statement of additional information
for the Funds and such other printed matter as merely identifies
Custodian as custodian for the Funds. The Corporation shall submit
printed matter requiring approval to Custodian in draft form,
allowing sufficient time for review by Custodian and its counsel
prior to any deadline for printing.
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
XXXXXXXX XXXXX FUNDS, INC. U.S. BANK NATIONAL ASSOCIATION.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxx X. Xxxxxxx
-------------------- ------------------
Title: Chief Executive Officer Title: Senior Vice President
----------------------- ---------------------
25
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Corporation to administer the Fund Custody Accounts.
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Authorized Persons Specimen Signatures
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President:
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Secretary:
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Treasurer:
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Vice President:
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Other:
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A-1
EXHIBIT B
U.S. Bank Institutional Custody Services
Standards of Service Guide
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a direct
member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of New
York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received
three (3) business days prior to any payment or settlement in order for the
USBank standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide is
subject to change. Should any changes be made USBank will provide
you with an updated copy of its Standards of Service Guide.
B-1
USBank Security Settlement Standards
Transaction Type Instructions Deadlines* Delivery Instructions
DTC 1:30 P.M. on Settlement Date DTC Participant #0000
Xxxxx Xxxx XX 00000
Institutional #________________
For Account #____________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cleveland
for Firstar Bank, N.A. ABA# 000000000
CINTI/1050
For Account #_____________
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date Federal Reserve Bank of Cleveland
Agreement Collateral Only) for Firstar Bank, N.A. ABA# 000000000
CINTI/1040
For Account #_____________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BYORK
(GNMA Book Entry) Firstar Bank / 117612
Physical Securities 9:30 A.M. EST on Settlement Date Bank of New York
(for Deliveries, by 4:00 P.M. on Settlement Date Xxx Xxxx Xxxxxx- 0xx Xxxxx - Xxxxxx A
minus 1) Xxx Xxxx, XX 00000
For account of Firstar Bank / Cust #117612
Attn: Xxxxxx Xxxxxx
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Date minus 2 Cedel a/c 55021
FFC: a/c 387000
Firstar Bank /Global Omnibus
Euroclear a/c 97816
FFC: a/c 387000
Firstar Bank/Global Omnibus
Cash Wire Transfer 3:00 P.M. Firstar Bank, X.X. Xxxxx/Trust ABA#
042000013
Credit Account #112950027
Account of Firstar Trust Services
Further Credit to ___________
Account # _______________
* All times listed are Eastern Standard Time.
B-2
USBank Payment Standards
Security Type Income Principal
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will
be made on the immediately following business day.
B-3
USBank Corporate Reorganization Standards
Type of Action Notification to Client Deadline for Client Instructions Transaction
to USBank Posting
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration 5 business days prior to expiration Upon receipt
date
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities None Upon receipt
Liquidations, Bankruptcies, received
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be
sold.
B-4
EXHIBIT C
Fund Names
Separate Series of
Name of Series Date Added
-------------- ----------
Xxxxxxxx Xxxxx Growth Fund 1996
Xxxxxxxx Plumb Bond Fund 1996
C-1
EXHIBIT D
Fee Schedule
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DOMESTIC CUSTODY SERVICES
ANNUAL FEE SCHEDULE
-------------------------------------------------------------------------------
Annual fee based upon market value per fund:
2 basis points
1 basis point on fund assets when fund complex reaches 1 billion
(a) Portfolio Transaction Fees
$ 5.00 per disbursement (waived if U.S. Bancorp is Administrator)
$ 7.00 per US Bank repurchase agreement transaction
$12.00 per book entry security (depository or Federal Reserve system) and
non-US Bank repurchase agrmt
$25.00 per portfolio transaction processed through our New York custodian
definitive security (physical)
$ 8.00 per principal paydown
$35.00 per option/future contract written, exercised or expired
$75.00 per Cedel/Euroclear transaction
$15.00 per mutual fund trade
$10.00 per Fed Wire
$10.00 per margin variation Fed wire
$12.00 per short sale
A transaction is a purchase/sale of a security, free receipt/free delivery,
maturity, tender or exchange.
Overdrafts - charged to the account at prime interest rate plus 2.
Plus out-of-pocket expenses, and extraordinary expenses based upon complexity,
including items such as shipping fees or transfer fees.
Fees are billed monthly.
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D-1
