1
CUSTODY AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of this 20th day
of December, 2001, by and between Fort Pitt Capital Funds, a Delaware business
trust (the "Trust") and U.S. Bank, N.A., a national banking association (the
"Custodian").
WHEREAS, the Trust 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 Trust desires to retain U.S. Bank, N.A. to act as Custodian
for each series of the Trust listed on Exhibit C hereto (as amended from time to
time) (each a "Fund", collectively the "Funds");
WHEREAS, the Trust desires that each Fund's Securities (defined below) and
cash be held and administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the 1940 Act.
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
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1.1 "Authorized Person" means any Officer or other person duly authorized
(other FMFS entities) by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of each Fund named in
Exhibit A hereto or in such resolutions of the Board of Trustees, certified
by an Officer, as may be received by the Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from time to time serving under
the Trust's Agreement and Declaration of Trust, as from time to time
amended.
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, and 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 Trust 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
Trust, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.7 "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 Trust.
1.8 "Oral Instructions" shall mean instructions orally transmitted on behalf of
the Trust to and received by the Custodian that are reasonably believed by
the Custodian to have been given by an Authorized Person. The Trust 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 Trust. If Oral Instructions vary from the
Written Instructions that purport to confirm them, the Custodian shall
notify the Trust of such variance and if the transaction has not yet been
completed, the Custodian shall follow the Written Instructions.
1.9 "Proper Instructions" shall mean Oral Instructions or Written Instructions.
Proper Instructions may be continuing Written Instructions when deemed
appropriate by both parties.
1.10 "Securities Depository" shall mean The Depository Trust Company and
(provided that Custodian shall have received a copy of a resolution of the
Board of Trustees, certified by an Officer, specifically approving the use
of such clearing agency as a depository for each Fund) any other clearing
agency registered with the Securities and Exchange Commission under Section
17A of the Securities and 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.
1.11 "Securities" shall include, without limitation, common and preferred
stocks, bonds, forward currency contracts, exchanged listed financial
futures contracts, 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 to service.
1.12 "Shares" shall mean, with respect to each Fund, the units of beneficial
interest issued by the Trust on account of the Fund.
1.13 "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 ("Contract") with the Custodian which the
Custodian has determined will provide reasonable care of assets of each
Fund based on the standards specified in Section 3.3 below. Such Contract
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 each 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 the 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 above, such
other provisions that the Custodian determines will provide, in their
entirety, the same or a greater level of care and protection for each
Fund's assets as the specified provisions, in their entirety.
1.14 "Written Instructions" shall mean (i) written communications actually
received by the Custodian and signed by an Authorized Person, or (ii)
communications by telex, electronic mail, 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
Trustees, a copy of which, certified by an Officer, shall have been
delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby appoints the Custodian as custodian of all
Securities and cash owned by or in the possession of each Fund 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.
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 Trust:
(a) A copy of the Agreement and Declaration of Trust certified by the
Secretary of the Trust (the "Secretary");
(b) A copy of the Bylaws of the Trust certified by the Secretary;
(c) A copy of the resolution of the Board of Trustees of the Trust
appointing the Custodian, certified by the Secretary;
(d) A copy of the then current Prospectus of each Fund; and
(e) A certification of the Chairman and Secretary of the Trust setting
forth the names and signatures of the current Officers of the Trust
and other Authorized Persons.
2.3 Notice of Appointment of Transfer Agent. The Trust agrees to notify the
Custodian in writing of the appointment, termination or change in
appointment of any Transfer Agent of a Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the Custodian for
the account of the 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 series of the
Trust) 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 Trust
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, and upon approval of the Board of Trustees, the
Custodian may appoint one or more Sub-Custodians to act as Securities
Depositories or as sub-custodians to hold Securities and cash of all
or any 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 each
Fund shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement.
(b) If, after the initial approval of Sub-Custodians by the Board of
Trustees in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of each Fund, it will so
notify the Trust 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. The Trust shall at the meeting of the Board of
Trustees next following receipt of such notice and information give a
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).
(d) At the end of each calendar quarter, the Custodian shall provide
written reports notifying the Board of Trustees 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 each Fund from any Sub-Custodian that has ceased to meet the
requirements of Rule 17f-5 under the 1940 Act.
(e) With respect to its responsibilities under this Section 3.3, the
Custodian hereby warrants to the Trust that it agrees to exercise
reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of property of each Fund. The
Custodian further warrants that each Fund's assets will be subject to
reasonable care, based on the standards applicable to custodians in
the relevant market, if maintained with each 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), the method of keeping custodial records, and the security
and data protection practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care for each
Fund's 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 each 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 Trust shall deliver, or cause to be
delivered, to the Custodian all of each Fund's Securities, cash and other
assets, including (a) all payments of income, payments of principal and
capital distributions received by each Fund with respect to such
Securities, cash or other assets owned by each Fund at any time during the
period of this Agreement, and (b) all cash received by each Fund for the
issuance, at any time during such period, 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) Prior to a deposit of Securities of a Fund in any Securities
Depository or Book-Entry System, the Trust shall deliver to the
Custodian a resolution of the Board of Trustees, certified by an
Officer, authorizing and instructing the Custodian on an on-going
basis to deposit in such Securities Depository or Book-Entry System
all Securities eligible for deposit therein and to 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.
(b) Securities of each 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 each Fund
maintained in a Book-Entry System or Securities Depository shall, by
book-entry, identify such Securities as belonging to that Fund.
(d) If Securities purchased by a 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 that Fund. If Securities sold by a 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 that Fund.
(e) The Custodian shall provide the Trust with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of a Fund are kept) on the internal
accounting controls and procedures for safeguarding Securities
deposited in such Book-Entry System or Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to a
Fund resulting (i) from the use of a Book-Entry System or Securities
Depository by reason of any negligence or willful misconduct on the
part of Custodian or any Sub-Custodian appointed pursuant to Section
3.3 above or any of its or their employees, or (ii) from failure of
Custodian or any such Sub-Custodian to enforce effectively such rights
as it may have against a Book-Entry System or Securities Depository.
At its election, the Trust 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 a
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.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt of Proper
Instructions, the Custodian shall disburse moneys from a 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 appointed pursuant to Section 3.3 above) 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 such
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 such 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 Trust and a bank which is a member of the
Federal Reserve System or between the Trust 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;
(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, trustee 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 Trust, 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 provision of any agreement among
the Trust, 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
Trustees, 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 a Fund Custody Account. Upon receipt of Proper
Instructions, the Custodian shall release and deliver Securities from the
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;
(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 appointed pursuant to
Section 3.3 above, or of 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 Securities, for examination in accordance with
the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or 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 Trust 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 Trust, 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 Trust;
(l) For delivery in accordance with the provisions of any agreement among
the Trust, 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;
(m) For delivery in accordance with the provisions of any agreement among
the Trust, 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 Trustees, 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 Trust, the Custodian shall with respect to all Securities held for a
Fund:
(a) Subject to Section 7.4 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 7.4 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 Internal Revenue Service ("IRS") and to the
Trust at such time, in such manner and containing such information as
is prescribed by the IRS;
(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 assets of the Fund.
3.9 Registration and Transfer of Securities. All Securities held for a 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 a
Fund may be registered in the name of the Fund, the Custodian, or any
Sub-Custodian appointed pursuant to Section 3.3 above, or in the name of
any nominee of any of them, or in the name of a Book-Entry System,
Securities Depository or any nominee of either thereof. The Trust 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 hereinabove referred to or in the name of a Book-Entry
System or Securities Depository, any Securities registered in the name of
the Fund.
3.10 Records.
(a) The Custodian shall maintain, for the Fund, complete and accurate
records with respect to Securities, cash or other property held for
the 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 each Fund as the Trust shall reasonably request, or as may be
required by the 1940 Act, including, but not limited to, Section 31 of
the 1940 Act and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with
rules and regulations of the Securities and Exchange Commission, (ii)
be the property of the Trust 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
Trust and employees or agents of the Securities and Exchange
Commission, and (iii) if required to be maintained by Rule 31a-1 under
the 1940 Act, be preserved for the periods prescribed in Rule 31a-2
under the 0000 Xxx.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Trust 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
and from time to time, the Custodian shall furnish the Trust with a
detailed statement of the Securities and moneys held by the Custodian and
the Sub-Custodians for each Fund under this Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide the Trust with such
reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities,
which are employed by the Custodian or any Sub-Custodian appointed pursuant
to Section 3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies relating
to Securities which are not registered in the name of a 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 Trust 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 Trust all information received by the Custodian and pertaining to
Securities being held by any 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 Trust desires to take action with respect to any tender offer, exchange
offer or other similar transaction, the Trust shall notify the Custodian at
least five Business Days prior to the date on which the Custodian is to
take such action. The Trust 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 A FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities for a
Fund, Written Instructions shall be delivered to the Custodian, specifying
(a) the name of the issuer or writer of such Securities, and the title or
other description thereof, (b) the number of shares, principal amount (and
accrued interest, if any) or other units purchased, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total
amount payable upon such purchase, and (f) the name of the person to whom
such amount is payable. The Custodian shall upon receipt of such Securities
purchased by each 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 a Fund, if in the
Fund Custody Account there is insufficient cash available to the Fund for
which such purchase was made.
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 but
in the absence of specified Written Instructions to so pay in advance, the
Custodian shall be liable to the Fund for such Securities to the same
extent as if the Securities had been received by the Custodian.
4.3 Sale of Securities. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying (a)
the name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and
accrued interest, if any), or other units sold, (c) the dates of sale and
settlement, (d) the sale price per unit, (e) the total amount payable upon
such sale, and (f) 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, etc. The Custodian will 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, in accordance with the U.S. Bank Payment standards set
forth in Exhibit B. 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 a Fund to use funds so credited to its 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 its Fund Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to facilitate
the settlement of a Fund's transactions in its 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 as the Trust may designate with respect to such amount
in such Proper Instructions.
5.2 No Duty Regarding Paying Banks. The Custodian shall not be under any
obligation to effect payment or distribution by any bank designated in
Proper Instructions given pursuant to Section 5.1 above of any amount paid
by the Custodian to such bank in accordance with such Proper Instructions.
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 Trust,
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 each 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,
(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 Trustees, 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 one Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the exercise of reasonable
care in carrying out its obligations under this Agreement, and shall be
without liability to the Trust or any Fund for any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim
unless such loss, damage, cost, expense, liability or claim arises from
negligence, bad faith or willful misconduct on its part or on the part of
any Sub-Custodian appointed pursuant to Section 3.3 above. The Custodian
shall be entitled to rely on and may act upon advice of counsel on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice, provided such counsel is experienced in
regulation and issues pertaining to the 1940 Act. The Custodian shall
promptly notify the Trust of any action proposed to be taken or omitted by
the Custodian pursuant to advice of counsel. The Custodian shall not be
under any obligation at any time to ascertain whether the Trust or each
Fund is in compliance with the 1940 Act, the regulations thereunder, the
provisions of the Trust "s charter documents or by-laws, or its investment
objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to a Fund 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.
7.3 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.
7.4 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 a Fund if such Securities are
in default or payment is not made after due demand or presentation.
However, Custodian shall immediately notify the Trust in writing of any
such money or property due and payable with respect to a security and not
collected by the Custodian.
7.5 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 and
reasonably believed by it to be genuine.
7.6 Express Duties Only. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
7.7 Co-operation. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust 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
Trust may from time to time request to enable the Trust to obtain, from
year to year, favorable opinions from the Trust's independent accountants
with respect to the Custodian's activities hereunder in connection with (a)
the preparation of the Trust's reports on Form N-1A and Form N-SAR and any
other reports required by the Securities and Exchange Commission, and (b)
the fulfillment by the Trust of any other requirements of the Securities
and Exchange Commission or other federal or state regulatory or
governmental authorities.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Trust. The Trust shall indemnify and hold harmless the
Custodian from and against any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability (including, without
limitation, liability arising under the Securities Act of 1933, the 1934
Act, the 1940 Act, and any state or foreign securities and/or banking laws)
or claim arising directly or indirectly (a) from the fact that Securities
are registered in the name of any such nominee, or (b) from any action or
inaction by the Custodian (i) at the request or direction of or in reliance
on the advice of the Trust, or (ii) upon Proper Instructions, or (c)
generally, from the performance of its obligations under this Agreement
provided that the Custodian shall not be indemnified and held harmless from
and against any such loss, damage, cost, expense, liability or claim
arising from the Custodian's or such Sub-Custodian's negligence, bad faith
or willful misconduct.
8.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Trust from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability (including without
limitation, liability arising under the Securities Act of 1933, the 1934
Act, the 1940 Act, and any state or foreign securities and/or banking laws)
or claim arising from the negligence, bad faith or willful misconduct of
the Custodian or any Sub-Custodian appointed pursuant to Section 3.3 above,
or any nominee of the Custodian or of such Sub-Custodian.
8.3 Indemnity to be Provided. If the Trust requests the Custodian to take any
action with respect to Securities, which may, in the reasonable opinion of
the Custodian, result in the Custodian or its nominee becoming liable for
the payment of money or incurring liability of some other form, the
Custodian shall not be required to take such action until the Trust shall
have provided indemnity therefor to the Custodian in an amount and form
reasonably satisfactory to the Custodian.
8.4 Security. If the Custodian advances cash or Securities to a Fund for any
purpose, either at the Trust'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 loss, damage,
cost, expense (including attorneys' fees and disbursements), liability or
claim (except such as may arise from its or its nominee's negligence, bad
faith 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.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; 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 the Custodian in the event of a failure
or delay (i) shall not discriminate against any Fund 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.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become effective as of its execution
and shall continue in full force and effect until terminated as hereinafter
provided.
10.2 Termination. Either party hereto may terminate this Agreement, without the
payment of any penalty, by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than sixty
(60) days after the date of the giving of such notice. If a successor
custodian shall have been appointed by the Board of Trustees, the Custodian
shall, upon receipt of a notice of acceptance by the successor custodian,
on such specified date of termination (a) 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 a Fund and held by the
Custodian as custodian, and (b) transfer any Securities held in a
Book-Entry System or Securities Depository to an account of or for the
benefit of a Fund at the successor custodian, provided that the Trust shall
have paid to the Custodian all fees, expenses and other amounts to the
payment or reimbursement of which it shall then be entitled. Upon such
delivery and transfer, the Custodian shall be relieved of all custodial
debts under this Agreement. The Trust 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. [They shouldn't be released from indemnification
obligations, etc]
10.3 Failure to Appoint Successor Custodian. If a successor custodian is not
designated by the Trust on or before the date of termination specified
pursuant to Section 10.2 above, then the Custodian shall have the right to
deliver to a bank or corporation of its own selection, which (a) is a
"bank" as defined in the 1940 Act and (b) has aggregate capital, surplus
and undivided profits as shown on its then 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 a
Fund at such bank or trust company all Securities of each Fund 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 custodial duties
under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time to
time by the Trust and the Custodian. The fees and other charges in effect on the
date hereof and applicable to each Fund are set forth in Exhibit C attached
hereto.
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the property of
the Trust as provided in the Trust's Agreement and Declaration of Trust, as from
time to time amended. The execution and delivery of this Agreement have been
authorized by the Board of Trustees, and this Agreement has been signed and
delivered by an authorized officer of the Trust, acting as such, and neither
such authorization by the Board of Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the above-mentioned Agreement and
Declaration of Trust. It is further agreed that the Custodian will look only to
each Fund on whose behalf any fees, costs, expenses or obligations have been
incurred for payment of such fees, costs, expenses or obligations.
ARTICLE XIII
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 (3) 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 Trust shall be sent to:
Fort Pitt Capital Funds
Attention: Xxxxxx X. Xxxxxx
Xxxxxx Plaza Eleven
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxx Xxxxx, LLC
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
and notice to the Custodian shall be sent to:
U.S. Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Telephone: (513) 632-_____
Facsimile: (000) 000-0000
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law.
This Agreement shall be governed by and constructed in accordance with the
laws of the State of Ohio.
14.2 References to Custodian. The Trust 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 a Fund and such other printed
matter as merely identifies Custodian as custodian for a Fund. The Trust
shall submit printed matter requiring approval to Custodian in draft form,
allowing reasonable time for review by Custodian and its counsel prior to
any deadline for printing.
14.3 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.
14.4 Amendments. This Agreement cannot be changed orally and no amendment to
this Agreement shall be effective unless evidenced by an instrument in
writing executed by the parties hereto.
14.5 Counterparts. This Agreement may be executed in one or more counterparts,
and by the parties hereto on separate counterparts, each of which shall be
deemed an original but all of which together shall constitute but one and
the same instrument.
14.6 Severability. If any provision of this Agreement shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
14.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement and any right or
obligation hereunder shall not be assignable by either party hereto without
the prior written consent of the other party hereto.
14.8 Headings. The headings of sections in this Agreement are for convenience of
reference only and shall not affect the meaning or construction of any
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
U.S. BANK, N.A. FORT PITT CAPITAL FUNDS
By: /s/ Xxx Xxxxxxx By: /s/ Xxxxxx X. Belhy
------------------- ---------------------
Xxx Xxxxxxx Xxxxxx X. Xxxxxx
Title: Senior Vice President Title: President
