CUSTODIAN AGREEMENT
This Agreement, dated the day of , 2000, made by and
between NRM INVESTMENT Company (the "Company"), a corporation operating
as an open-end investment company, duly organized and existing under the laws
of the Commonwealth of Pennsylvania and Laurel Trust Company ("Laurel"), a
Pennsylvania state chartered trust company and wholly owned subsidiary of BT
Financial Corporation, Johnstown Pennsylvania, duly organized and existing
under the laws of the United States of America;
WITNESSETH THAT:
WHEREAS, the Company desires to appoint Laurel as custodian of its
Securities and principal cash, and Laurel is willing to act in such capacity
upon the terms and conditions herein set forth; and
WHEREAS, Laurel qualifies as a "Bank" within the meaning of Section
2(a)(5) of The Investment Company Act of 1940 (the "Act") and qualifies as a
Custodian of the Company's securities and similar investments under Section
17 (f) of the Act and Rule 17f-2 of the rules and regulations thereunder; and
WHEREAS, Laurel in its capacity as custodian hereunder will also collect
and apply the dividends and interest on said Securities in the manner and to
the extent herein set forth; and
WHEREAS, pursuant to separate agreement, Laurel will perform the duties
of Administrator, Transfer Agent and Dividend Disbursing Agent.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as
follows:
Section 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
The Company: The term Company shall mean NRM INVESTMENT Company.
Custodian: The term Custodian shall mean Laurel in its capacity as
custodian under this Agreement.
Securities: The term Securities shall mean bonds, debentures, notes,
stocks, shares, evidences of indebtedness, and other securities and
investments from time to time owned by the Company.
Share Certificates: The term Share Certificates shall mean the stock
certificates for the Shares of the Company.
Shareholders: The term Shareholders shall mean the registered owners
from time to time of the Shares of the Company in accordance with the stock
registry records of the Company.
Shares: The term Shares mean the issued and outstanding shares of common
stock of the Company whether in certificate or noncertificated form.
Oral instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of
any kind transmitted to the Custodian in person or by telephone, facsimile
transmission, electronic mail, telecopy or other mechanical or documentary means
lacking original signature, by a person or persons believed in good faith by the
Custodian to be a person or persons authorized by a
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resolution of the Board of Directors of the Company to give Oral Instructions on
behalf of the Company.
Written Instructions: The term Written Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of
any kind transmitted to the Custodian in original writing containing original
signatures or a copy of such document transmitted by telecopy or facsimile
transmission including transmission of such signature, believed in good faith
by the Custodian to be the signature of a person authorized by a resolution
of the Board of Directors of the Company to give Written Instructions on
behalf of the Company.
Securities Depository: The term Securities Depository shall mean 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 or pledged by bookkeeping entry
without physical delivery of the securities.
Book-Entry Securities: The term Book-Entry Securities shall mean
securities issued by the Treasury of the United States of America and federal
agencies of the United States of America which are maintained in the
book-entry system as provided in Subpart O of Treasury Circular Xx. 000, 00
XXX 000, Xxxxxxx X of 31 CFR Part 350, and the book-entry regulations of
federal agencies substantially in the form of subpart O and the term
Book-Entry Account shall mean an account maintained by a Federal Reserve Bank
in accordance with the aforesaid Circular and regulations.
Section 2. The Company shall from time to time file with Custodian a
certified copy of each resolution of its Board of Directors authorizing
execution of Written Instructions and the number of signatories required,
together with certified
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signatures of the officers and other signatories authorized to sign,
which shall constitute conclusive evidence of the authority of the officers
and other signatories designated therein to act, and shall be considered in
full force and effect with the Custodian fully protected in acting in
reliance thereon until it receives a new certified copy of a resolution
adding or deleting a person or persons with authority to give Written
Instructions. If the certifying officer is authorized to sign Written
Instructions, the certification shall also be signed by a second officer of
the Company.
The Company shall from time to time file with the Custodian a certified
copy of each resolution of its Board of Directors authorizing the transmittal
of Oral Instructions and specifying the person or persons authorized to give
Oral Instructions in accordance with this Agreement. Any resolution so filed
with the Custodian shall be considered in full force and effect and the
Custodian shall be fully protected in acting in reliance thereon until it
actually receives a new certified copy of a resolution adding or deleting a
person or persons with authority to give Oral Instructions. If the certifying
officer is authorized to give Oral Instructions, the certification shall also
be signed by a second officer of the Company.
Section 3. For all purpose under this Agreement, the Custodian is
authorized to act upon receipt of the first of any Written or Oral
Instruction it receives. In cases where the first Instruction is an Oral
Instruction that is not in the form of a document or written record, the
Company shall be responsible for delivering, or having delivered to the
Custodian, a confirmatory Written Instruction in the form of a document or
written record, and in cases where the Custodian receives an Instruction,
whether Written or Oral, with respect to a portfolio transaction, the Company
shall cause the broker or dealer
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to send a written confirmation to the Custodian. The Custodian shall be
entitled to rely on the first Instruction received, and for any act or
omission undertaken in compliance therewith shall be free of liability and
fully indemnified and held harmless by the Company. The Custodian shall act
upon and comply with any subsequent Written or Oral Instruction which
modified such first Instruction. The sole obligation of the Custodian with
respect to any follow-up or confirmatory Written Instruction, Oral
Instruction in documentary or written form, or broker-dealer written
confirmation shall be to make reasonable efforts to detect any discrepancy
between the original Instruction and such confirmation and to report such
discrepancy to the Company. The Company shall be responsible, at the
Company's expense, for taking any action, including any reprocessing,
necessary to correct any discrepancy or error, and to the extent such action
requires the Custodian to act the Company shall give the Custodian specific
Written Instructions as to the action required.
Section 4. The Company hereby appoints the Custodian as custodian of the
Securities and principal and income cash from time to time on deposit
hereunder, to be held by the Custodian and applied as provided in this
Agreement. The Custodian hereby accepts such appointment subject to the terms
and conditions hereinafter provided. The Securities held by the Custodian
shall, unless payable to bearer or maintained in a Securities Depository or
Book-Entry Account pursuant to Section 5, be registered in the name of the
Custodian or in the name of its nominee, or if directed by Written
Instructions, in the name of the Company or its nominee. Securities,
excepting bearer securities, delivered from time to time to the Custodian
upon purchase or otherwise shall in all cases be in due form for transfer or
already registered as above provided. Such
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Securities and principal and income cash of the Company shall, however,
be and remain the sole property of the Company and the Custodian shall have
only the bare custody thereof.
Section 5. The Company hereby authorizes the Custodian to (a) deposit in
its account(s) with any Securities Depository registered as a Clearing Agency
under Section 17A of the Securities Exchange Act of 1934, all or any part of
the Securities as may from time to time be held for the Company, and (b)
deposit Book-Entry Securities belonging to the Company in a Book-Entry
Account which is maintained for the Custodian by a Federal Reserve Bank. So
long as any deposit referred to in (a) and (b) above is maintained for the
Company, the Custodian:
(i) shall deposit the Securities in an account that includes only
assets held by it for customers;
(ii) shall send the Company a confirmation (i.e. an advice or notice of
a transaction) of any transfers to or from the account of the
Company;
(iii) shall, with respect to Securities transferred to the account of
the Company, identify them as belonging to the Company, a quantity
of securities in a fungible bulk of securities (a) registered in
the name of the Custodian or its nominee, or (b) shown on the
Custodian's account on the books of the Securities Depository, the
Book-Entry System, or the Custodian's agent;
(iv) shall promptly send to the Company reports it receives from the
appropriate Federal Reserve Bank or Securities Depository or its
respective system of internal accounting control; and
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(v) shall send to the Company such reports of the systems of internal
accounting control of the Custodian and its agents through which
such Securities are deposited as are available and as the Company
may reasonably request from time to time.
The Company will provide the Custodian a certified copy of Resolutions of its
Board of Directors approving the arrangement for the deposit of Securities in a
Securities Depository and the Book-Entry System.
Section 6. The Company will initially transfer and deposit or cause to
be transferred and deposited with the Custodian all of the Securities and
principal and income cash owned by the Company at the time this Agreement
becomes effective. Such transfer and deposit shall be evidence by appropriate
schedules duly executed by the Company ("Schedules"). The Company will cause
to deposited with the Custodian additional Securities of the Company as the
same are purchased or otherwise acquired from time to time and dividends or
interest collected on such Securities.
Thereafter the Company will cause to be deposited with the Custodian
hereunder (i) the net proceeds of Securities sold from time to time and (ii)
the applicable net asset value of Shares sold from time to time whether
representing initial issue, treasury stock or reinvestments of dividends
and/or distributions payable to Shareholders as well as any other securities
and cash as may be acquired from time to time. Deposits with respect to sales
of Shares shall be accompanied by Written or Oral Instructions stating the
number of Shares to be issued or reissued, and the amount to be deposited
with the Custodian. Any such Written or Oral Instructions shall also include
or be accompanied by registration instructions.
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The Company shall promptly turn over to the Custodian all of the
accounts and records previously maintained by or for it as are necessary for the
Custodian to perform its functions under this Agreement ("Accounts and
Records"). The Company authorized the Custodian to rely on such Accounts and
Records and the Schedules and hereby indemnifies and holds the Custodian, its
successors and assigns, harmless of and from any and all expenses, damages,
claims, suits, liabilities, actions, demands and losses whatsoever arising out
of or in connection with any error, omission, inaccuracy or other deficiency of
such Accounts and Records and Schedules or in the failure of the Company to
provide any portion of such or to provide any information needed by the
Custodian to knowledgeably perform its functions.
Attached hereto is a list of all inaccuracies, omissions, discrepancies,
and other deficiencies in the Accounts and Records and Schedules known to the
Company or INVESTORS TRUST COMPANY ("Investors Trust") until the close of
business on , 2000. The Company agrees to promptly advise the
Custodian in writing of all additions or deletions from such list
necessary to maintain the list in the current status. The Custodian shall
make reasonable efforts to isolate and correct any inaccuracies, omissions,
discrepancies, or other deficiencies in the Accounts and Records and
Schedules delivered to the Custodian to the extent such matters are disclosed
to the Custodian or are discovered by the Custodian and are relevant to the
Custodian's performance under this Agreement. The Company shall provide the
Custodian with such assistance as the Custodian reasonably requests in
connection with the Custodian's efforts to correct such matters. The
Custodian expressly makes no warranty or representation that any error,
omission or deficiency in the Accounts and Records and
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Schedules can be satisfactorily corrected.
With respect to any matter involving a possible assertion of any past,
present or future potential or contingent liability of the Custodian the Company
warrants that it has not committed and shall not commit any act or omission that
constitutes a waiver, release, estoppel or other impairment of any kind or any
rights it may heretofore have had, may now have, or may hereafter have against
Investors Trust and that it shall do everything necessary to preserve, and, if
appropriate, enforce all of such rights against Investors Trust. Without
limitation of the foregoing, the Company agrees that if any suit is instituted
against the Custodian arising, in the Custodian's sole reasonable judgment, out
of any act or omission of Investors Trust which created a deficiency of the
Accounts and Records and Schedules delivered hereunder, or out of any failure of
Investors Trust to deliver material information, or assistance contemplated
hereunder, then the Company shall take whatever steps are necessary to join
Investors Trust as party defendant or additional defendant is said litigation.
Section 7. The Custodian is hereby authorized and directed to disburse
principal cash from time to time as follows:
(a) for the purpose of payment for the purchase of Securities
purchased by the Company, upon receipt by the Custodian of both (i)
Written or Oral Instructions specifying the Securities and stating the
purchase price, and the name of the broker, investment banker and other
party to or upon whose order the purchase price is to be paid, and (ii)
the Securities so purchased in due form for transfer or already
registered as provided in Section 4, provided, however, that the
Custodian may make payment for
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Securities on deposit with a Securities Depository and Book-Entry
Securities at such time as the Custodian enters a credit in the account
it maintains for the Company to the effect that it has accepted delivery
of such Securities on behalf of the Company;
(b) for the purpose of transferring funds in connection with a
repurchase agreement, upon receipt by the Custodian of (i) Written or
Oral Instructions specifying the Securities, the purchase price and the
party to whom the purchase price is to be paid and (ii) the Securities
so purchased in due form for transfer or already registered as provided
in Section 4, provided, however, that the Custodian may make payment for
Securities on deposit with a Securities Depository and Book-Entry
Securities at such time as the Custodian enters a credit in the account
it maintains for the Company to the effect that it has accepted delivery
of such Securities on behalf of the Company;
(c) for the purpose of redeeming or transferring funds to a duly
designated redemption paying agent to redeem or repurchase Shares, upon
receipt of both (i) Share Certificates in due form for transfer or
proper processing of Shares for which no Share Certificates are
outstanding, and (ii) Written or Oral Instructions stating the
applicable redemption price which will be based upon the Custodian's
computation of the Company's portfolio;
(d) for the purpose of exercising warrants and rights received upon
the Securities, upon timely receipt of Written or Oral Instructions
authorizing the exercise of such warrants and rights and stating the
consideration to be paid;
(e) for the purpose of repaying in whole or in part any loan of the
Company upon receipt of Written or Oral Instructions directing payment
and stating the Securities, if any, to be received against payment;
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(f) for the purpose of paying dividends or paying over to a duly
designated Dividend Disbursing Agent such amounts as may be stated in
Written or Oral Instructions, representing proceeds of the sale of
warrants, rights, stock dividends, profit and increases in values of the
Securities, as the Company may determine to include in dividends and/or
distributions declared on the Shares;
(g) for the purpose of making other corporate expenditures upon
receipt of Written or Oral Instructions stating that such expenditures
were authorized by resolution of the Board of Directors of the Company
and are or were for proper corporate purposes, and specifying the amount
of payment, the purpose for which such payment is to be made, and naming
the person or persons to whom payment is to be made;
(h) for the purpose of transferring funds to any Sub-Custodian,
upon receipt of Written or Oral Instructions from the Company;
(i) for the purpose of payment for the purchase of regulated
investment Company Securities purchased by the Company, upon receipt by
the Custodian of Written or Oral Instructions specifying the Securities
and stating the purchase price and the name of the broker, investment
banker or other party to or upon whose order the purchase price is to be
paid.
Section 8. The Custodian is hereby authorized and directed to deliver
Securities of the Company from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the
Company, upon receipt of both (i) the net proceeds of sale and (ii)
Written or Oral Instructions specifying the Securities sold and stating
the amount to be received;
(b) for the purpose of exchanging Securities for other Securities
and/or cash
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upon timely receipt of (i) Written or Oral Instructions stating the
Securities to be delivered and the Securities and/or cash to be received
in exchange and the manner in which the exchange is to be made, and (ii)
against receipt of the other Securities and/or cash as specified in the
Written or Oral Instructions;
(c) for the purpose of exchanging or converting Securities pursuant
to their terms or pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment or otherwise, upon timely
receipt of (i) Written or Oral Instructions authorizing such exchange or
conversion and stating the manner in which such exchange or conversion
is to be made, and (ii) the Securities, certificates of deposit, interim
receipts, and/or cash to be received as specified in the Written or Oral
Instructions;
(d) for the purpose of presenting Securities for payment which have
matured or have been called for redemption;
(e) for the purpose of delivery of Securities upon redemption of
Shares in kind, upon receipt (i) of Share Certificates in due form for
transfer, or proper processing of Shares for which no Share Certificates
are outstanding, and (ii) appropriate Written or Oral Instructions;
(f) for the purpose of depositing with the lender Securities to be
held as collateral for a loan to the Company upon receipt of Written or
Oral Instructions directing delivery to the lender; or
(g) upon receipt of Written or Oral Instructions stating (i) the
securities to be delivered and the payment to be received and (ii)
payment, in connection with any repurchase agreement related to such
Securities.
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Section 9. The Custodian will collect from time to time the dividends
and interest on the Securities held by it hereunder and will deposit the same
in a separate income account until disbursed as hereinafter provided.
The Custodian is authorized to advance or pay out of said income account
accrued interest on bonds purchased and dividends on stocks sold and like
items. In the event that any Securities are registered in the name of the
Company or its nominee, the Company will endorse to the Custodian, or cause
to be endorsed, dividend and interest checks or will issue appropriate orders
to the issuers of the Securities to pay dividends and interest to the
Custodian.
Subject to proper reserves for dividends owing on stocks sold and like
items, the Custodian will disburse the money from time to time on deposit in
the income account to or upon the order of the Company as it may from time to
time direct for the following purposes:
(a) to pay the proper compensation and expenses of the Custodian;
(b) to pay dividends or to transfer funds to a duly designated
Dividend Disbursing Agent to pay dividends and/or distributions which
may be declared by the Board of Directors of the Company upon receipt of
appropriate Written or Oral Instructions;
(c) to pay, or provide the Company with money to pay taxes upon
receipt of appropriate Written or Oral Instructions;
(d) to transfer funds to a separate checking account maintained by
the Company pursuant to Section 17 (f) of the Investment Company Act of
1940, as amended;
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(e) to pay interest, management or supervisory fees,
administration, dividend and transfer agency fees and costs,
compensation of personnel, or operating expenses (including, without
limitation thereto, fees for legal, accounting and auditing services),
and to disburse cash for other proper corporate purposes. Before making
any such payment or disbursement, however, the Custodian shall receive
(and may conclusively rely upon) Written or Oral Instructions requesting
such payment or disbursement and stating that it is for one or more of
the purposes hereinabove enumerated, provided that if such payment or
disbursement is for other proper corporate purposes, the Written or Oral
Instructions shall state that such payment or disbursement was
authorized by resolution of the Board of Directors of the company and is
for a proper corporate purpose.
The determination of the Board of Directors of the Company as to what
shall constitute income derived from the Securities from time to time held
hereunder as distinguished from principal or capital, shall be final and
conclusive upon the Company, the Custodian and the Shareholders.
The Company if it elects so to do, may direct the Custodian by Written
or Oral Instructions to make transfers from the income account in its hands,
to be held as cash principal and applied as provided in this Agreement.
Section 10. The Company will cause any bank (including the Custodian)
from which it borrows money using securities as collateral to deliver to the
Custodian a notice or undertaking in the form currently employed by such bank
setting forth the amount which such bank will loan to the Company against
delivery of a stated amount of collateral. The company shall promptly deliver
to the Custodian Written or Oral Instructions for each loan stating: (a) the
name of the bank, (b) the amount and terms
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of the borrowing, which may be sent forth by incorporating by reference
an attached promissory note, duly endorsed by the Company, or other loan
agreement, (c) the time and date, if known, on which the loan is to be
entered into ( the "borrowing date"), (d) the date on which the loan becomes
due and payable, (e) the total amount payable to the Company on the borrowing
date, and (f) the market value of Securities to be delivered as collateral
for such loan, including the name of the issuer, the title and the number of
shares or the principal amount of any particular securities. The Custodian
shall deliver on the borrowing date such specified collateral and the
executed promissory note, if any, against delivery by the lending bank of the
total amount of the loan payable, provided that the same conforms to the
total amount set forth in the Written or Oral Instruction. The Custodian may,
at the option of the lending bank, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement.
The Custodian shall deliver from time to time such Securities as
additional collateral as may be specified in Written or Oral Instructions, to
collateralize further any transaction described in this Section. The Company
shall cause all Securities released from collateral status to be returned
directly to the Custodian.
In the event that Written or Oral Instructions fail to specify the name
of the issuer the title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any particular
Securities.
Section 11. If the Custodian should in its sole discretion advance funds
on the behalf of the Company which results in an overdraft because the moneys
held by the
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Custodian for the account of the Company shall be insufficient to pay
the total amount payable upon purchase of securities or which results in an
overdraft for some other reason indebted to the Custodian, such overdraft or
indebtedness shall be deemed to be a loan made by the Custodian to the
Company payable on demand and bearing interest at the current rate charged by
the Custodian for such loans. The Company hereby agrees that the Custodian
shall have a continuing lien and security interest in and to any property at
any time held by it for the benefit of the Company or in which the Company
may have an interest which is then in the Custodian's possession or control
or in possession or control of any third party acting on the Custodian's
behalf to the extent of any such or indebtedness. The Company authorizes the
Custodian, in its sole discretion, at any time to charge any such overdraft
or indebtedness together with interest due thereon against any balance of
account standing to the Company's credit on the Custodian's books.
Section 12. The Company shall deliver Written or Oral Instructions to
the Custodian, within 24 hours after each loan of portfolio Securities by the
Company, stating: (a) the name of the issuer and the title of the Securities,
(b) the number of shares or the principal amount loaned, (c) the date of the
loan and delivery of Securities, (d) the total amount to be delivered to the
Custodian against the loan of the Securities including the amount of cash
collateral and the premium, if any, separately identified, and (e) the name
of the broker or other person to whom the loan was made. The Custodian shall
deliver the Securities loaned to the person designated in (e) above against
receipt of the total amount to be delivered against the loan of the
Securities. The Custodian may accept payment only in the form of a certified
or bank cashier's check payable to the order of the
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Company or the Custodian and may deliver Securities in accordance with
the customs prevailing among dealers in securities.
The Company shall promptly deliver Written or Oral Instructions to the
Custodian after each termination of a loan of Securities by the Company
stating: (a) the name of the issuer and the title of the Securities to be
returned, (b) the number of shares or the principal amount to be returned,
(c) the date of termination, (d) the total amount to be delivered by the
Custodian (including the cash collateral for such securities minus any
offsetting credits as described in the Written or Oral Instructions), and (e)
the name of the broker or other person from whom the Securities will be
received. The Custodian shall receive all Securities returned and upon
receipt thereof shall pay, out of the money's held for the account of the
Company, the total amount payable upon such return of Securities as set forth
in the Written or Oral Instructions.
Section 13. The Custodian assumes no duty, obligation or responsibility
whatsoever to exercise any voting or consent powers with respect to the
Securities held by it from time to time hereunder, it being understood that
the Company or such person or persons as it may designate, shall have the
right to vote, or consent or otherwise act with respect to such Securities.
The Custodian will exercise its best efforts to furnish the Company proxies
or other appropriate authorizations with respect to Securities registered in
the name of the Custodian or its nominee so that such voting powers, or
powers to consent or otherwise act may be exercised by the Company or
pursuant to its discretion.
Section 14. The Custodian's compensation shall be as set forth in
Schedule A hereto attached, or as shall be set forth in amendments to such
Schedule approved in writing by the Company and the Custodian.
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Section 15. The Custodian shall exercise its best efforts to handle,
forward, or process in any way notices of stockholder meetings, proxy
statements, annual reports, conversion notices, call notices, or other
notices or written materials of any kind sent to the registered owners of
securities (hereinafter referred to as "notices and materials"), excluding
only stock certificates and dividend and interest payments, it being
understood that the Company and its investment adviser have primary
responsibility for obtaining such notices and materials, and for taking
action thereon. The Custodian will make reasonable efforts to comply with
Rule 14b-2 under the Securities Exchange Act of 1934 and is so doing to
forward such notices and materials as it receives them to the Company, but
makes no warranty or representation that all notices and materials will be
forwarded, and the Company hereby agrees that it shall make no claim
whatsoever against the custodian for any expense, damage, or loss of any kind
arising out of failure to forward notices and materials.
Upon receipt by the Custodian of warrants or rights issued in connection
with the assets of the Company, the Custodian shall enter into its ledgers
appropriate notations indicating such receipt and shall notify the Company of
such receipt, but shall not have any obligation to take any action of any
kind with respect to such warrants or rights except upon receipt of Written
or Oral Instructions from the Company.
Section 16. The Custodian assumes no duty, obligation, or responsibility
whatsoever with respect to Securities not deposited with the Custodian.
Common stocks or other Securities exchanged for Shares shall not be
considered deposited with the Custodian until physically received and
registered in accordance with the provisions of this Agreement.
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Section 17. The Custodian acknowledges and agrees that all books and
records maintained for the Company in any capacity under this Agreement are
the property of the Company and may be inspected by the Company, or any
authorized regulatory agency, at any reasonable time, and that upon request
will be surrendered promptly to the Company. The Custodian agrees to make
available upon request and to preserve for the periods prescribed in Rule
31a-2 under the Investment Company Act any records relating to services
provided under this Agreement which are required to be maintained by Rule
31a-1 under said act.
Section 18. The Custodian assumes only the usual duties and obligations
normally performed by custodians of mutual funds. It specifically assumes no
responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Company whether or not on deposit
hereunder, it being understood that the responsibility for the proper and
timely management, investment and reinvestment of said Securities shall be
that of the Company and its investment advisor.
The Custodian shall not be liable for any taxes, assessments or
governmental charges which may be levied or assessed upon the Securities held
by it hereunder, or upon the income therefrom or otherwise whatsoever. The
Custodian may pay any such tax, assessment or charge and reimburse itself out
of the moneys of the Company or out of the Securities held hereunder;
provided, however, the Custodian shall consult the officers of the Company
before making any such payment.
The Custodian may rely upon the advice of counsel, who may be counsel
for the Company, and upon statements of accountants, brokers or other persons
believed by it in good faith to be expert in the matters upon which they are
consulted; and for any action
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taken or suffered in good faith based upon such advice or statements the
Custodian shall not be liable to anyone. The Custodian shall not be liable
for anything done or suffered to be done in good faith in accordance with any
Written or Oral Instructions, request or advice of, or based upon information
furnished by, the Company or its officers. The Custodian is authorized to
accept a certificate of the President, Secretary or Assistant Secretary of
the Company to the effect that a resolution in the form submitted has been
duly adopted and is in full force and effect. The Custodian shall not be
liable for any action done in good faith and believed to be within the powers
conferred upon it by this Agreement.
Section 19. Upon receipt of Written or Oral Instructions, the Custodian
shall appoint one or more U.S. banking institutions as Sub-Custodian
(including but not limited to, U.S. banks located in foreign countries) of
Securities and moneys at any time owned by the Company.
The Custodian shall have no liability to the Company or any other person
by reason of any act or omission of any Sub Custodian and the Company shall
indemnify the Custodian and save it harmless from any and against any and all
actions, suits and claims, whether groundless or otherwise and from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising directly or indirectly out of or in connection
with the performance of any Sub Custodian. The Custodian shall not be under
any obligation to prosecute or to defend any action, suit or claim arising
out of or in connection with the performance of any Sub Custodian, which, in
the opinion of its counsel, may involve it in expense or liability, and the
Company shall, so often as reasonably requested, furnish the Custodian with
satisfactory indemnity against such
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expense or liability, and upon request of the Custodian, the Company shall
assume the entire defense of any action, suit, or claim subject to the
foregoing indemnity.
The Company shall pay fees and expenses of any Sub Custodian.
Section 20. The Custodian shall be liable to the Company for any
negligence, bad faith, or willful misconduct by the Custodian in the
performance of its duties as specifically set forth in this Agreement and
shall not be entitled to reimbursement out of the Company's assets.
Section 21. This Agreement may be amended from time to time without
notice to or approval of the Shareholders by a written supplemental agreement
executed by the Company and the Custodian and amending and supplementing this
Agreement in a manner mutually agreed.
Section 22. Either the Company or the Custodian may give written notice
to the other of the termination of this Agreement, such termination to take
effect at the time specified in the notice which shall not be earlier than
(60) days after the date of giving such notice. In case such notice of
termination is given either by the Company or by the Custodian, the Company
shall use its best efforts to obtain a successor custodian, and the Board of
Directors of the Company shall, by resolution duly adopted, promptly either
designate the Company as its own custodian or appoint a successor custodian.
Each successor custodian shall be a person qualified to so act under the
Investment Company Act of 1940, as amended. Upon receipt of written notice
from the Company of the appointment of such successor and upon receipt of
Written or Oral Instructions, the Custodian shall deliver such Securities and
cash as it may then be holding directly to and only to the successor
custodian. Unless or until a successor Custodian has been
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appointed as above provided, the Custodian then acting shall continue to
act as Custodian under this Agreement. Every successor Custodian appointed
hereunder shall execute and deliver an appropriate written acceptance of its
appointment and shall thereupon become vested with the rights, powers,
obligations and custody of its predecessor Custodian. The Custodian ceasing
to act shall nevertheless, upon request of the Company and successor
custodian and upon payment of its charges and disbursements, execute an
instrument in form approved by its counsel transferring to the successor
custodian all the predecessor Custodian's rights, duties, obligations and
custody.
In the case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto, without the execution or filing of
any papers or other documents, succeed to and be substituted for the
Custodian with like effect as though originally named as such.
Section 23. Nothing contained in this Agreement is intended to or shall
require the Custodian in any capacity hereunder to perform any functions or
duties on any holiday, day of special observance or any other day on which
the Custodian or the New York Stock Exchange is closed. Functions or duties
normally scheduled to be performed on such days shall be performed on, and as
of, the next succeeding business day on which both the New York Stock
Exchange and the Custodian are open.
Section 24. This Agreement shall take effect on the date hereof or on
such other date as the parties agree to transfer the Company's assets to the
Custodian.
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Section 25. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 26. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Company without
the written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of its Board
of Directors.
Section 27. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the Company and the Custodian have caused this
Agreement to be signed by their respective Presidents or Vice Presidents and
their corporate seals hereunto duly affixed, and attested by their respective
Secretaries or Assistant Secretaries, as of the day and year above written.
NRM INVESTMENT COMPANY
BY:
-----------------------------
Title:
(SEAL)
Attest:
-----------------------------
LAUREL TRUST COMPANY
BY:
-----------------------------
Title:
(SEAL)
Attest:
-----------------------------
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