Exhibit (g)(2)
AMERITOR SECURITY TRUST
FORM OF CUSTODY AGREEMENT ("AGREEMENT")
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Agreement made as of __ day of May, 2002, by and among Ameritor Security Trust
("Fund"), a trust organized under the laws of the District of Columbia and
having its office at 0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, X.X.,
00000-0000, on behalf of its Shepherd Class shares, and Xxxxxx Financial
Services (the "Custodian"), a member of a national securities exchange having
its principal office and place of business at 0000 Xxxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx, 00000, which Agreement provides for the furnishing of custodian services
to the Fund.
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set forth the
Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
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Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the Chairman, President,
Secretary, and the Vice President, or any other person, whether or not any such
person is an officer or employee of the Fund, duly authorized by the Board of
Trustees of the Fund to give Oral Instructions on behalf of the Fund and listed
in the Certificate annexed hereto as Appendix A or such other Certificate as may
be received by the Custodian from time to time, subject in each case to any
limitations on the authority of such person as set forth in Appendix A or any
such Certificate.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry system
for United States and federal agency securities, its successor or successors and
its nominee or nominees, provided the Custodian has received a certified copy of
a resolution of Board of Trustees of the Fund specifically approving deposits in
the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the Custodian
which is signed by an Officer of the Fund and is actually received by the
Custodian.
4. "Depository" shall mean The Depository Trust Fund ("DTC"), a clearing agency
registered with the Securities and Exchange Commission, its successor or
successors and its nominee or nominees. The term "Depository" shall further mean
and include any other
person or clearing agency authorized to act as a depository under the Investment
Company Act of 1940, as amended ("1940 Act"), its successor or successors and
its nominee or nominees, provided that the Custodian has received a certified
copy of a resolution of the Board of Trustees of the Fund specially approving
such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer agent
active, from time to time, in such capacity pursuant to a written agreement with
the Fund, changes in which the Fund shall immediately report to the Custodian in
writing.
6. "Money Market Security" shall be deemed to include, without limitation, 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 and reverse repurchase agreements with respect to the
same) and bank time deposits of domestic banks that are members of Federal
Deposit Insurance Trust, and short-term corporate obligations where the purchase
and sale of such securities normally requires settlement in federal funds or
their equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the Chairman, the President, the
Secretary, and Vice President of the Fund listed in the Certificate annexed
hereto as Appendix A or such other certificate as may be received by the
Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions actually received by the
Custodian from an Authorized Person (or from a person which the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions from Authorized Persons in such manner so that such Written
Instructions are received by the Custodian on the next business days.
9. "Prospectus" or "Prospectuses" shall mean the Fund's currently effective
prospectuses and statement of additional information, as filed with and declared
effective by the Securities and Exchange Commission.
10. "Security" or "Securities" shall mean Money Market Securities, common or
preferred stocks, options, futures, gold, silver, bonds, debentures, corporate
debt securities, notes, mortgages of other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interest therein, or any property or assets.
11. "Written Instructions" shall mean communication actually received by the
Custodian from one Authorized Person or from one person which the Custodian
reasonably believes in good faith to be an Authorized Person in writing, telex
or any other data transmission system whereby the receiver or such communication
is able to verify by codes or otherwise with a reasonable degree of certainty
the authenticity of the senders of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
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1. The Fund, hereby constitutes and appoints the Custodian as custodian of all
the Securities and monies at any time owned by the Fund during the period of
this Agreement.
2. The Custodian hereby accepts appointment as such Custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE FUND
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The Fund hereby agrees to furnish to the Custodian the following documents:
1. A copy of its Declaration of Trust certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. A copy of the resolution of its Board of Trustees appointing the Custodian
certified by its Secretary.
4. A copy of the most recent Prospectuses of the Fund.
5. A Certificate of the President and Secretary setting forth the names and
signatures of the present Officers of the Fund.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
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1. The Fund will deliver or cause to be delivered to the Custodian all Fund
securities, property, and cash attributable to its Shepherd Class shares ("Class
Assets") including cash received for the issuance of its Shepherd Class shares,
at any time during the period of this Agreement. The Custodian will not be
responsible for such Class Assets until actually received by it. The Custodian
will be entitled to reverse any credits made on the Fund's behalf where such
credits have been previously made and monies are not finally collected within 30
days of the making of such credits. The Custodian is hereby authorized by the
Fund to actually deposit any Class Assets in the Book-Entry System or in a
depository, provided, however, that the Custodian shall always be accountable to
the Fund for the Class Assets so deposited.
2. The Custodian shall credit to a separate account or accounts in the name of
the Fund all monies received by it for the account of the Fund, and shall
disburse the same only:
a. In payment for Securities purchased for the account of the Fund provided
in Article V hereof;
b. In payment of dividends or distributions, as provided in Article V
hereof;
c. In payment for shares of the Fund redeemed by it, as provided in Article
VII hereof; or
d. Pursuant to Certificates (i) directing payment and setting forth the
name and address of the person to whom the payment is to be made, the
amount of such payment and the purpose for which payment is to be made (the
Custodian not being required to question such direction) or (ii) if reserve
requirements are established for the Fund by law or by valid regulation,
directing the Custodian to deposit a specified amount of collected funds in
the form of U.S. dollars at a specified Federal Reserve bank and stating
the purpose of such deposit.
3. Promptly after the close of business on each day the Funds is open and
valuing its portfolio, the Custodian shall make available to the Fund 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
during said day. 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. At least monthly and from
time to time, the Custodian shall furnish the Fund with a detailed statement of
the Securities held for the Fund under this Agreement.
4. All Securities held for the Fund, which are issued or issuable only in bearer
form, except such Securities as are held in the Book-Entry System, shall be held
by the Custodian in that form; all other Securities held for the Fund may be
registered in the name of a nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or name of the Book-Entry or the Depository, any Securities
which it may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund. The Custodian shall hold all such Securities
which are not held in the Book-Entry System by the Depository or a Sub-Custodian
in a separate account or accounts in the name of the Fund segregated at all
times from those of any other fund maintained and operated by the Fund and from
those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate, the Custodian
shall with respect to all Securities held for the Fund in accordance with this
Agreement:
a. Collect all income due or payable to the Fund with respect to the Fund's
Assets;
b. Present for payment and collect the amount payable upon all Securities
which may mature or be called, redeemed, or retired, or otherwise become
payable;
c. Surrender Securities in temporary form for definitive Securities;
d. 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; and
e. Hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of the Fund all rights
and similar securities issued with respect to any Securities held by the
Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian directly or
through the use of the Book-Entry System or the Depository shall:
a. Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other instruments whereby
the authority of the Fund as owner of any Securities may be exercised;
b. Deliver any Securities held for the Fund in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets, of any corporation, or the exercise of any conversion privilege 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; and
c. Make such transfers or exchanges of the assets of the Fund and take such
other steps as shall be stated in said Certificate to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganizations, merger,
consolidation or recapitalization of the Fund.
7. The Custodian shall promptly deliver to the Fund all notices, proxy material
and executed but unvoted proxies pertaining to shareholder meetings of
Securities held by the Fund. The Custodian shall not vote or authorize the
voting of any Securities or give any consent,
8. The Custodian shall promptly deliver to the Fund all material received by the
Custodian and pertaining to Securities held by the Fund with respect to tender
or exchange offers, calls for redemption or purchase, expiration of rights, name
changes, stock splits and stock dividends, or any other activity involving
ownership rights in such Securities.
9. All securities and investments of the Fund which are held in physical custody
by the Custodian shall be maintained in accordance with the following:
a. The securities and similar investments held in such custody by the
Custodian shall at all times be individually segregated from the securities and
investments of any other person and marked in such manner as to clearly identify
them as the property of the Fund, both upon physical inspection thereof and upon
examination of the books of the Custodian. The physical segregation and marking
of such securities and investments may be accomplished by putting them in
separate containers bearing the name of such Fund or by attaching tags or labels
to such securities and investments.
b. The Custodian shall have no power or authority to assign, hypothecate,
pledge or otherwise to dispose of any such securities and investments, except
pursuant to the direction of the Fund and only for the account of the Fund.
c. Such securities and investments shall be subject to no lien or charge of
any kind in favor of the Custodian or any persons claiming through the
Custodian.
d. Such securities and investments shall be verified by actual examination
at the end of each annual and semi-annual fiscal period by an independent public
accountant retained by the Fund, and shall be examined by such accountant at
least one other time, chosen by the accountant, during each fiscal year. A
certificate of such accountant stating that an examination of such securities
has been made, and describing the nature and extent of the examination, shall be
attached to a completed Form N-17f-1 and transmitted to the Securities and
Exchange Commission promptly after each examination.
e. Such securities and investments shall, at all times, be subject to
inspection by the Securities and Exchange Commission through its employees or
agents.
f. The provisions of subsections (a), (b) and (c) of this Section 9 shall
not apply to securities and similar investments bought for or sold to the Fund
by the Custodian until the securities have been reduced to the physical
possession of the Custodian and have been paid for by the Fund; Provided, That
the Custodian shall take possession of such securities at the earliest
practicable time. Nothing in this subsection shall be construed to relieve any
Company which is a member of a national securities exchange of any obligation
under existing law or under the rules of any national securities exchange.
10. The Custodian may deposit the securities in a clearing agency which acts as
a securities depository or the book-entry system, or both, under an arrangement
that contains the following elements:
a. The Custodian may deposit the securities directly or through one or more
agents which are also qualified to act as custodians for investment companies.
b. The Custodian (or its agent) shall deposit the securities in an account
that includes only assets held by it for customers.
c. The Custodian shall send the Fund a confirmation of any transfers to or
from the account of the Fund. Where securities are transferred to that account,
the Custodian shall also, by book-entry or otherwise, identify as belonging to
the Fund a quantity of securities in a fungible bulk of securities (i)
registered in the name of the Custodian (or its nominee) or (ii) shown on the
Custodian's account on the books of the clearing agency, the book-entry system,
or the Custodian's agent. For this purpose, the term "confirmation" means advice
or notice of a confirmation required of broker-dealers under the Securities
Exchange Act of 1934.
d. The Custodian, or its agent which deposits the securities, shall
promptly send to the Fund reports it receives from the appropriate Federal
Reserve Bank or clearing agency on its respective system of internal accounting
control. The Custodian and all the agents through which the securities are
deposited shall send to the Fund such reports on their own systems of internal
accounting control as the Fund may reasonably request from time to time.
e. For the purpose of this section, a "securities depository" is a system
for the central handling of securities where all securities of any particular
class or series of any issuer deposited within the system are treated as
fungible and may be transferred by bookkeeping entry without physical delivery
of the securities.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
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1. Promptly after each purchase of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities which
are not Money Market Securities, a Certificate or Written Instructions, and (ii)
with respect to each purchase of Money Market Securities, Written Instructions,
a Certificate or Oral Instructions, specifying with respect to each such
purchase: (a) The name of the issuer and the title of the Securities, (b) the
principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable by the Fund upon such purchase and (f) the name of the person from whom
or the broker through whom the purchase was made. The Custodian shall upon
receipt of Securities purchased by or for the Fund, pay out of the monies held
for the account of the Fund the total amount payable to the person from whom or
the broker through whom the purchase was made, provided that the same conforms
to the total amount payable as set forth in such Certificate, Written
Instructions, or Oral Instructions.
2. Promptly after each sale of Securities by the Fund for the account of the
Fund, the Fund shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate or Written
Instructions, and (ii) with respect to each sale of Money Market Securities,
Written Instructions, a Certificate, or Oral
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the Security, (b) the principal amount sold, and accrued
interest, if any, (c) the date of sale, (d) the sale price per unit, (e) the
total amount payable to the Fund upon such sale and (f) the name of the broker
through whom or the person to whom the sale was made. The Custodian shall
deliver the Securities upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount payable as set
forth in such Certificate, Written Instructions or Oral 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;
3. On contractual settlement date, the account of the Fund will be charged for
all purchases settling on that day, regardless of whether or not delivery is
made. On contractual settlement date, sale proceeds will likewise be credited to
the account of the Fund irrespective of delivery. In the case of "sale fails",
the Custodian may request the assistance of the Fund in making delivery of the
failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
-------------------------------------
1. The Fund shall furnish to the Custodian a copy of the resolution of the Board
of Trustees certified by the Secretary, either (i) setting forth the date of the
declaration of any dividend or distribution in respect of shares of the Fund,
the date of payment thereof, the record date as of which 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 of the Fund on the payment date, or (ii) authorizing
the declaration of dividends and distributions in respect of shares of the Fund
on a daily basis and authorizing the Custodian to rely on Written Instructions
or a Certificate setting forth the date of the declaration of any such dividend
or distribution, the date of payment thereof, the record date as of which 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.
2. Upon the payment date specified in such resolution, Written Instructions or
Certificate, as the case may be, the Custodian shall arrange for such payments
to be made to the Dividend and Transfer Agent out of monies held for the account
of the Fund.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
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1. The Custodian shall receive and credit to the account of the Fund such
payments for shares of the Fund issued or sold from time to time as are received
from the distributor for the Fund's shares, from the Dividend and Transfer Agent
of the Fund.
2. Upon receipt of Written Instructions, the Custodian shall arrange for payment
of redemption proceeds to be made to the Dividend and Transfer Agent out of the
monies held for the account of the Fund in the total amount specified in the
Written Instructions.
3. Notwithstanding the above provisions regarding the redemption of any shares
of the Fund, whenever shares of the Fund are redeemed pursuant to any check
redemption privilege which may from time to time be offered by the Fund, the
Custodian, unless otherwise subsequently instructed by Written Instructions
shall, upon receipt of any Written Instructions setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check redemption
privilege out of the money held in the account of the Fund for such purposes.
ARTICLE VIII
CONCERNING THE CUSTODIAN
------------------------
1. 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 if
its negligence or willful misconduct. The Fund shall defend, indemnify and hold
harmless the Custodian and its Trustees, 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 Fund's duties with
respect to the Fund hereunder or any other action or inaction of the Fund or its
Trustees, Officers, Employees, or Agents as to the Fund, except such as may
arise from the negligent action, omissions or willful misconduct of the
Custodian, its Directors, Officers, Employees or, Agents. The Custodian shall
defend, indemnify and hold harmless the Fund and its Trustees, 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 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, omissions or willful misconduct of the Fund, its Trustees,
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 Fund at the
expense of the Fund, or if 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 of the Fund, 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 questions of law. The
Custodian shall be liable to the Fund 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
Fund of principal and of interest to the date of recovery of, Securities
incorrectly omitted from the Fund's account or penalties imposed on the Fund, 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 of 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 obligations of the parties hereto
under this paragraph shall survive the termination of the Agreement.
2. 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:
(a) The validity of the issue of any Securities purchased by or for the
account of the Fund, the legality of the purchase thereof, or the propriety of
the amount paid therefor;
(b) The legality of the sale of any Securities by or for the account of the
Fund, or the propriety of the amount for which the same share sold;
(c) The legality of the issue or sale of any shares of the Fund, or the
sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Fund, or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by the Fund
in respect of shares of the Fund;
(f) The legality of any borrowing by the Fund using Securities as
collateral;
(g) The sufficiency of any deposit made pursuant to a Certificate described
in clause (ii) of paragraph 2(e) of Article IV hereof.
3. The Custodian shall not be liable for any money collected in U.S. dollars
deposited in a Federal Reserve Bank in accordance with a Certificate described
in clause (ii) of paragraph 2(d) of Article IV hereof, nor be liable for or
considered to be the Custodian of any money, whether or not represented by any
check, draft, or other instrument for the payment of money, received by it on
behalf of the Fund until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing the Fund's
interest at the Book-Entry System or Depository.
4. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount due to the Fund from the Dividend and Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Dividend and Transfer Agent of the Fund of any amount paid by the Custodian
to the Dividend and Transfer Agent of the Fund in accordance with this
Agreement.
5. Income due or payable to the Fund with respect to Class Assets will be
credited to the account of the Fund as follows:
(a) Dividends will be credited on the first business day following payable
date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities issued or
guaranteed as to principal and/or interest by the government of the United
States or agencies or instrumentalities thereof (excluding securities issued by
the Government National Mortgage Association) will be credited on payable date
irrespective of collection.
(c) Interest on fixed rate corporate debt securities will be credited on
the first business day following payable date irrespective of collection.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not be
under any duty or obligation to take action 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 a Certificate and (ii) it shall be
assured to its satisfaction or reimbursement of its costs and expenses in
connection with any which action, or at the Custodian's option, prepayment
7. The Custodian may appoint one or more financial or banking institutions, as
Depository or Depositories or as Sub-Custodian or Sub-Custodians, including, but
not limited to, banking institutions, of Securities and monies at any time owned
by the Fund, upon terms and conditions approved in a Certificate. Current
Depository(s) and Sub-Custodian(s) are noted in Appendix B. The Custodian shall
not be relieved of any obligation or liability under this Agreement in
connection with the appointment or activities of such Depositories or
Sub-Custodians.
8. 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
Fund are such as properly may be held by the Fund under the provisions of the
Articles of Incorporation and the Fund's By-Laws.
9. The Custodian shall treat all records and other information relating to the
Fund and the Class Assets as confidential and shall not disclose any such
records or information to any other person unless (a) the Fund shall have
consented thereto in writing or (b) such disclosure is compelled by law.
10. The Custodian shall be entitled to receive and the Fund agrees to pay to the
Custodian, for the Fund's account, such compensation as shall be determined
pursuant to Appendix C attached hereto, or as shall be determined pursuant to
amendments to such appendix approved by the Custodian, on behalf of the Fund.
11. The Custodian shall be entitled to rely upon any Certificate if such
reliance is made in good faith. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received by the
Custodian pursuant to Article IV or V hereof. The Fund agrees to forward to the
Custodian written instructions from Authorized Persons confirming Oral
Instructions in such manner so that such Written Instructions are received by
the Custodian, whether by hand delivery, telex or otherwise, on the first
business day following the day on which such Oral Instructions are given to the
Custodian. The Fund agrees that the fact that such confirming instructions are
not received by the Custodian shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by the
Fund. The Fund agrees that the Custodian shall incur no liability to the Fund in
acting upon Oral Instructions given to the Custodian hereunder concerning such
transactions.
12. The Custodian will (a) 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 obligation of the Fund under the 1940
Act, with particular attention to Section 31 thereof and Rules 31 a-1 and 31
a-2, thereunder, and (b) preserve for the period prescribed by applicable
Federal statute or regulation all records required to be so preserved. The books
and records of the Custodian shall be open to inspection and audit at reasonable
times and with prior notice by Officers and auditors employed by the Fund.
13. The Custodian and its Sub-Custodians shall promptly send to the Fund, for
the account of the Fund, any report received on the systems of internal
accounting control of the Book-Entry System or the Depository and with such
reports on their own systems of internal accounting control as the Fund may
reasonably request from time to time.
14. The Custodian performs only the services of a custodian and shall have no
responsibility for the management, investment or reinvestment of the Securities
from time to time owned by the Fund. The Custodian is not a selling agent for
shares of the
Fund and performance of its duties as a custodial agent shall not be deemed to
be a recommendation to the Custodian's depositors or others of shares of the
Fund as an investment.
15. The Custodian shall maintain in effect appropriate policies and procedures
sufficient to ensure compliance with federal anti-money laundering laws and
regulations and will make such policies and procedures available for inspection
by the Fund upon request.
ARTICLE IX
TERMINATION
-----------
1. Either of the parties 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 the ninety (90) days after the date of
giving of such notice. If such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board of Trustees, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians each of which shall be an entity
specified in paragraph (1) of Section 17(f) of the 1940 Act. In the event such
notice is given by the Custodian, the Fund shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of its Board of Trustees,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Fund. In the absence of such designation by the Trust, the
Custodian may designate a successor custodian which shall be an entity specified
in paragraph (1) or (2) of Section 17(f) of the 1940 Act. 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 Fund shall pay to the Custodian on behalf of the Fund
such compensation as may be due as of the date of such termination. The Fund
agrees that the Custodian shall be reimbursed for its reasonable costs in
connection with the termination of this Agreement.
2. If a successor custodian is not designated by the Fund or by the Custodian in
accordance with the preceding paragraph, or the designated successor cannot or
will not serve, the Fund shall, upon the delivery by the Custodian to the Fund
of all Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Fund) and monies then owned by the Fund, other than
monies deposited with a Federal Reserve Bank pursuant to a Certificate described
in clause (ii) of paragraph 2(e) of Article IV, be deemed to be the custodian
for the Fund, 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 Fund
to hold such Securities hereunder in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
1. Appendix A sets forth the names and the signatures of all Authorized Persons.
The Fund 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 present Authorized Persons as set forth in the
last delivered Appendix A.
2. No recourse under any obligation of this Agreement or for any claim based
thereon shall be had against any organizer, shareholder, Officer, Trustee, past,
present or future as such, of the Fund or of 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, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, or Trustees of the Fund or of any
predecessor, successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and than any and all such
liability if hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by the Fund
have been made by the Trustees of the Fund, acting as such Trustees for and on
behalf of the Fund, pursuant to the authority vested in them under the laws of
the District of Columbia, Articles of Incorporation and the By-Laws of the Fund.
This Agreement has been executed by Officers of the Fund as Officers, and not
individually, and the obligations contained herein are not binding upon any of
the Trustees, Officers, Agents, or holders of shares, personally, but bind only
the Fund and then only to the extent of Class Assets.
4. Such provisions of the Prospectuses of the Fund and any other documents
(including advertising material) specifically mentioning the Custodian (other
than merely by name and address) shall be reviewed with the Custodian by the
Fund.
5. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Fund shall be sufficiently given if addressed to
the Fund and mailed or delivered to it at its offices at 0000 XxxXxxxxx
Xxxxxxxxx, #000, Xxxxxxxxxx, X.X. 00000-0000, or at such other place as the Fund
may from time to time designate in writing.
6. 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 0000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, or at such other place as the Custodian
may from time to time designate in writing.
7. This Agreement with the exception of Appendices A & B 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 Trustees of the Fund.
8. 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 Fund or by the Custodian, and no
attempted assignment by the Fund or the Custodian shall be effective without the
written consent of the other party hereto.
9. 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.
10. This Agreement constitutes the entire agreement among the parties with
respect to the subject hereof, and supersedes and rescinds any and all prior
agreements, written or oral, with respect to the subject hereof.
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.
ATTEST: AMERITOR SECURITY TRUST,
on behalf of its Shepherd Class shares
/s/ BY:
-------------------------- --------------------------------------
ATTEST: XXXXXX FINANCIAL SERVICES
BY:
-------------------------- --------------------------------------
APPENDIX A
[To be inserted]
APPENDIX B
The following Depository(s) and Sub-Custodians) are employed currently by Xxxxxx
Financial Services:
[To be inserted]
APPENDIX C
[To be inserted]
