CUSTODY AGREEMENT
THIS AGREEMENT, is made as of December 31, 1997,
by and between GRAND PRIX FUNDS, INC., a corporation
organized under the laws of the State of Maryland (the
"Company"), and THE FIFTH THIRD BANK, a banking company
organized under the laws of the State of Ohio (the
"Custodian").
WITNESSETH:
WHEREAS, the Company desires that the Securities
and cash of each of the investment portfolios
identified in Exhibit A hereto (such investment
portfolios are individually referred to herein as a
"Fund" and collectively as the "Funds"), be held and
administered by the Custodian pursuant to this
Agreement; and
WHEREAS, the Company is an open-end management
investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Custodian represents that it is a
bank having the qualifications prescribed in Section
26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual
agreements herein made, the Company and the Custodian
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 by resolution of the Board
of Directors to give Oral Instructions and Written
Instructions on behalf of the Company and named in
Exhibit B hereto or in such resolutions of the Board of
Directors, certified by an Officer, as may be received
by the Custodian from time to time.
1.2 "Board of Directors" shall mean the Directors
from time to time serving as such under the Company's
Articles of Incorporation and Bylaws 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, or in such book-entry regulations of federal
agencies as are substantially in the form of such
Subpart O.
1.4 "Business Day" shall mean any day recognized
as a settlement day by The New York Stock Exchange,
Inc. and any other day for which the Fund computes the
net asset value of the Fund.
1.5 "NASD" shall mean The National Association of
Securities Dealers, Inc.
1.6 "Officer" shall mean the President, any Vice
President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Company.
1.7 "Oral Instructions" shall mean instructions
orally transmitted to and accepted by the Custodian
because such instructions are: (i) reasonably believed
by the Custodian to have been given by an Authorized
Person, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business and
(iii) orally confirmed by the Custodian. The Company
shall cause all Oral Instructions to be confirmed by
Written Instructions. 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 Company. If Oral
Instructions vary from the Written Instructions which
purport to confirm them, the Custodian shall notify the
Company of such variance but such Oral Instructions
will govern unless the Custodian has not yet acted.
1.8 "Custody Account" shall mean any account in
the name of the Company, which is provided for in
Section 3.2 below.
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
Participants Trust Company or The Depository Trust
Company and (provided that Custodian shall have
received a copy of a resolution of the Board of
Directors, certified by an Officer, specifically
approving the use of such clearing agency as a
depository for the Company) any other clearing agency
registered with the Securities and Exchange Commission
under Section 17A of the Securities and Exchange Act of
1934 (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, call
options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-
backed securities, other money market instruments 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 $0.01 par value, common
stock issued by the Company.
1.13 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and
signed by one or more persons as the Board of Directors
shall have from time to time authorized, or (ii)
communications by telex or any other such system from a
person or persons reasonably believed by the Custodian
to be Authorized, or (iii) communications transmitted
electronically through the Institutional Delivery
System (IDS), or any other similar electronic
instruction system acceptable to Custodian and approved
by resolutions of the Board of Directors, a copy of
which, certified by an Officer, shall have been
delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Company hereby constitutes
and appoints the Custodian as custodian of all
Securities and cash owned by or in the possession of
the Company at any time during the period of this
Agreement, provided that such Securities or cash at all
times shall be and remain the property of the Company.
2.2 Acceptance. The Custodian hereby accepts
appointment as such custodian and agrees to perform the
duties thereof as hereinafter set forth and in
accordance with the 1940 Act as amended. Except as
specifically set forth herein, the Custodian shall have
no liability and assumes no responsibly for any non-
compliance by the Company or a Fund of any laws, rules
or regulations.
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, except 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 and shall be
identified as subject to this Agreement.
3.2 Custody Account. The Custodian shall open
and maintain in its trust department a custody account
in the name of each 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 the Fund which are delivered to it.
3.3 Appointment of Agents. In its discretion,
the Custodian may appoint, and at any time remove, any
domestic bank or trust company, which has been approved
by the Board of Directors and is qualified to act as a
custodian under the 1940 Act, as sub-custodian to hold
Securities and cash of the Funds and to carry out such
other provisions of this Agreement as it may determine,
and may also open and maintain one or more banking
accounts with such a bank or trust company (any such
accounts to be in the name of the Custodian and subject
only to its draft or order), provided, however, that
the appointment of any such agent shall not relieve the
Custodian of any of its obligations or liabilities
under this Agreement.
3.4 Delivery of Assets to Custodian. The Fund
shall deliver, or cause to be delivered, to the
Custodian all of the Fund's Securities, cash and other
assets, including (a) all payments of income, payments
of principal and capital distributions received by the
Fund with respect to such Securities, cash or other
assets owned by the Fund at any time during the period
of this Agreement, and (b) all cash received by the
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 the Funds in a Securities Depository or
in a Book-Entry System, subject to the following
provisions:
(a) Prior to a deposit of Securities of the
Funds in any Securities Depository or Book-
Entry System, the Fund shall deliver to the
Custodian a resolution of the Board of
Directors, 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 the Fund kept in a Book-
Entry System or Securities Depository shall
be kept in an account ("Depository Account")
of the Custodian in such Book-Entry System or
Securities Depository which includes only
assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(c) The records of the Custodian and the
Custodian's account on the books of the Book-
Entry System and Securities Depository as the
case may be, with respect to Securities of a
Fund maintained in a Book-Entry System or
Securities Depository shall, by book-entry,
or otherwise identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are
to be held in a Book-Entry System or
Securities Depository, the Custodian shall
pay for such Securities upon (i) receipt of
advice from the Book-Entry System or
Securities Depository that such Securities
have been transferred to the Depository
Account, and (ii) the making of an entry on
the records of the Custodian to reflect such
payment and transfer for the account of the
Fund. If Securities sold by the Fund are
held in a Book-Entry System or Securities
Depository, the Custodian shall transfer such
Securities upon (i) receipt of advice from
the Book-Entry System or Securities
depository that payment for such Securities
has been transferred to the Depository
Account, and (ii) the making of an entry on
the records of the Custodian to reflect such
transfer and payment for the account of the
Fund.
(e) Upon request, the Custodian shall
provide the Fund with copies of any report
(obtained by the Custodian from a Book-Entry
System or Securities Depository in which
Securities of the Fund is 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 Company for any loss
or damage to the Company 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 Company
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 for any loss or damage to
the Funds arising from the use of such Book-
Entry System or Securities Depository, if and
to the extent that the Company has been made
whole for any such loss or damage.
3.6 Disbursement of Moneys from Custody Accounts.
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 upon compliance 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 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 Company 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 Company and a bank which is a
member of the Federal Reserve System or
between the Company 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 for the
account of the Fund 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 Company, including
but not limited to the following payments for
the account of a Fund: interest; taxes;
administration, investment management,
investment advisory, accounting, auditing,
transfer agent, custodian, trustee and legal
fees; and other operating expenses of a 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
Company, 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 Company;
(g) For transfer in accordance with the
provisions of any agreement among the
Company, 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
Company;
(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 purposes, but only
upon receipt, in addition to Proper
Instructions, of a copy of a resolution of
the Board of Directors, certified by an
Officer, specifying the amount and purpose of
such payment, declaring such purpose to be a
proper corporate purpose, and naming the
person or persons to whom such payment is to
be made.
3.7 Delivery of Securities from Fund Custody
Accounts. Upon receipt of Proper Instructions, the
Custodian shall release and deliver Securities from a
Custody Account but only in the following cases:
(a) Upon the sale of Securities for the
account of a 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 a 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 Company,
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 of merger, consolidation,
recapitalization, reorganization or
readjustment of the issuer of such
Securities, or pursuant to provisions for
conversion contained in such Securities, or
pursuant to any deposit agreement, including
surrender or receipt of underlying Securities
in connection with the issuance or
cancellation of depository receipts; provided
that, in any such case, the new Securities
and cash, if any, are to be delivered to the
Custodian;
(g) Upon receipt of payment therefor
pursuant to any repurchase or reverse
repurchase agreement entered into by a 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 a Fund, but only
against receipt of such collateral as the
Company shall have specified to the Custodian
in Proper Instructions;
(j) For delivery as security in connection
with any borrowings by the Company on behalf
of a Fund requiring a pledge of assets by
such Fund, 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
Company or a Fund;
(l) For delivery in accordance with the
provisions of any agreement among the
Company, 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 Company on behalf of a Fund;
(m) For delivery in accordance with the
provisions of any agreement among the Company
on behalf of a Fund, 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
Company on behalf of a Fund; or
(n) For any other proper corporate purposes,
but only upon receipt, in addition to Proper
Instructions, of a copy of a resolution of
the Board of Directors, certified by an
Officer, specifying the Securities to be
delivered, setting forth the purpose for
which such delivery is to be made, declaring
such purpose to be a proper corporate
purpose, and naming the person or persons to
whom delivery of such Securities shall be
made.
3.8 Actions Not Requiring Proper Instructions.
Unless otherwise instructed by the Company, 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 Company 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 Company, 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 Company at such
time, in such manner and containing such
information as is prescribed by the IRS;
(f) Hold for a 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 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 for the account of the
Company on behalf of a Fund, if eligible therefor. All
other Securities held for a Fund may be registered in
the name of the Company on behalf of such 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;
provided, however, that such Securities are held
specifically for the account of the Company on behalf
of a Fund. The Company 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 a
Fund.
3.10 Records. (a) The Custodian shall maintain,
by Fund, complete and accurate records with respect to
Securities, cash or other property held for the
Company, 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 accrued; and
(iii) canceled checks and bank records related thereto.
The Custodian shall keep such other books and records
of the Company as the Company shall reasonably request,
or as may be required by the 1940 Act, including, but
not limited to Section31 and Rule 31a-1 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 Company and in compliance with rules and
regulations of the Securities and Exchange Commission,
(ii) be the property of the Company 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 Company
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 Company with a daily activity
statement by Fund and a summary of all transfers to or
from the Custody Account on the day following such
transfers. At least monthly and from time to time, the
Custodian shall furnish the Company with a detailed
statement, by Fund, of the Securities and moneys held
for the Company under this Agreement.
3.12 Other Reports by Custodian. The Custodian
shall provide the Company with such reports, as the
Company 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 if any, 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 include all
other proxy materials, if any, promptly deliver to the
Company such proxies, all proxy soliciting materials,
which should include all other proxy materials, if any,
and all notices to such Securities.
3.14 Information on Corporate Actions. Custodian
will promptly notify the Company of corporate actions,
limited to those Securities registered in nominee name
and to those Securities held at a Depository or sub-
Custodian acting as agent for Custodian. Custodian
will be responsible only if the notice of such
corporate actions is published by the Financial Daily
Card Service, X.X. Xxxxx Called Bond Service, DTC, or
received by first class mail from the agent. For
market announcements not yet received and distributed
by Custodian's services, Company will inform its
custody representative with appropriate instructions.
Custodian will, upon receipt of Company's response
within the required deadline, affect such action for
receipt or payment for the Company. For those
responses received after the deadline, Custodian will
affect such action for receipt or payment, subject to
the limitations of the agent(s) affecting such actions.
Custodian will promptly notify Company for put options
only if the notice is received by first class mail from
the agent. The Company will provide or cause to be
provided to Custodian with all relevant information
contained in the prospectus for any security which has
unique put/option provisions and provide Custodian with
specific tender instructions at least ten business days
prior to the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each
purchase of Securities for the Company, 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 a Fund pay out of the
moneys held for the account of such 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 relevant
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 for the
account of the Fund of the Securities purchased but in
the absence of specific Written or Oral 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 date 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 Company 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 Company
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 of the
foregoing.
4.5 Payment for Securities Sold, etc. In its
sole discretion and from time to time, the Custodian
may credit the relevant 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 Company, and (iii) income from cash, Securities or
other assets of the Company. Any such credit shall be
conditional upon actual receipt by Custodian of final
payment and may be reversed if final payment is not
actually received in full. The Custodian may, in its
sole discretion and from time to time, permit the
Company to use funds so credited to its Custody Account
in anticipation of actual receipt of final payment.
Any such funds shall be repayable immediately upon
demand made by the Custodian at any time prior to the
actual receipt of all final payments in anticipation of
which funds were credited to the 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 Company to facilitate the
settlement of a Company transaction on behalf of a Fund
in its Custody Account. Any such advance shall be
repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF TRUST SHARES
5.1 Transfer of Funds. From such funds as may be
available for the purpose in the relevant Custody
Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares
of a Fund, the Custodian shall wire each amount
specified in such Proper Instructions to or through
such bank as the Company may designate with respect to
such amount in such Proper Instructions. Upon
effecting payment or distribution in accordance with
proper Instruction, the Custodian shall not be under
any obligation or have any responsibility thereafter
with respect to any such paying bank.
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 Company, the Custodian
and a broker-dealer registered under the 1934
Act and a member of the NASD (or any futures
commission merchant registered under the
Commodity Exchange Act), relating to
compliance with the rules of The Options
Clearing Corporation and of any registered
national securities exchange (or the
Commodity Futures Trading commission or any
registered contract market), or of any
similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions by the Company,
(b) for purposes of segregating cash or
Securities in connection with securities
options purchased or written by a Fund or in
connection with financial futures contracts
(or options thereon) purchased or sold by a
Fund,
(c) which constitute collateral for loans of
Securities made by a Fund,
(d) for purposes of compliance by the
Company with requirements under the 1940 Act
for the maintenance of segregated accounts by
registered investment companies in connection
with reverse repurchase agreements and when-
issued, delayed delivery and firm commitment
transactions, and
(e) for other proper corporate purposes, but
only upon receipt of, in addition to Proper
Instructions, a certified copy of a
resolution of the Board of Directors,
certified by an Officer, setting forth the
purpose or purposes of such segregated
account and declaring such purposes to be
proper corporate purposes.
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 Company for any loss, damage,
cost, expense (including reasonable attorneys' fees and
disbursements), liability or claim unless such loss,
damages, 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's cumulative
liability under this Agreement with respect to the
Company or any party claiming by, through or on behalf
of the Company, shall be the actual damages sustained
by the Company (actual damages for uninvested funds
shall be the overnight Feds fund rate). 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. The Custodian shall promptly notify the
Company of any action 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 Company is in compliance with the 1940 Act,
the regulations thereunder, the provisions of the
Company'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 the Company 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 the Company
if such Securities are in default or payment is not
made after due demand or presentation.
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/or any Written Instructions
actually received by it pursuant to this Agreement.
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 Cooperation. The Custodian shall cooperate
with and supply necessary information, by the Company,
to the entity or entities appointed by the Company to
keep the books of account of the Company and/or compute
the value of the assets of the Company. The Custodian
shall take all such reasonable actions as the Company
may from time to time request to enable the Company to
obtain, from year to year, favorable opinions from the
Company's independent accountants with respect to the
Custodian's activities hereunder in connection with (a)
the preparation of the Company's report 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 Company of any other requirements of
the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Company shall indemnify
and hold harmless the Custodian and any sub-custodian
appointed pursuant to Section 3.3 above, and any
nominee of the Custodian or of such sub-custodian from
and against any loss, damage, cost, expense (including
reasonable 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 or such sub-
custodian (i) at the request or direction of or in
reliance on the advice of the Company, or (ii) upon
Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or
any sub-custody agreement with a sub-custodian
appointed pursuant to Section 3.3 above or, in the case
of any such sub-custodian, from the performance of its
obligations under such custody agreement, provided that
neither the Custodian nor any such sub-custodian shall
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 Indemnity to be Provided. If the Company
requests the Custodian to take any action with respect
to Securities, which may, in the 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 Company shall
have provided indemnity therefor to the Custodian in an
amount and form satisfactory to the Custodian.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Company 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 shall use its best efforts to ameliorate the
effects of any such failure or delay. Notwithstanding
the foregoing, the Custodian shall maintain sufficient
disaster recovery procedures to minimize interruptions.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall
become effective as of the date first set forth above
and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 Termination. Either party hereto may
terminate this Agreement by giving to the other party a
notice in writing specifying the date of such
termination, which shall be not less than ninety (90)
days after the date of the giving of such notice. If a
successor custodian shall have been appointed by the
Board of Directors, the Custodian shall, upon receipt
of a notice of acceptance by the successor custodian,
on such specified date of termination (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 the
Company 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 the Company at the successor custodian,
provided that the Company 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 obligations under
this Agreement. The Company 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 in the State of
Ohio or upon the happening of a like event at the
direction of an appropriate regulatory agency or court
of competent jurisdiction.
10.3 Failure to Appoint Successor Custodian. If a
successor custodian is not designated by the Company 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 trust company of its own
selection, which is (a) a "Bank" as defined in the 1940
Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published
report of not less than $25 million, and (c) is doing
business in New York, New York, all Securities, cash
and other property held by Custodian under this
Agreement and to transfer to an account of or for the
Company at such bank or trust company all Securities of
the Company held in a Book-Entry System or Securities
Depository. Upon such delivery and transfer, such bank
or trust company shall be the successor custodian under
this Agreement and the Custodian shall be relieved of
all obligations under this Agreement. If, after
reasonable inquiry, Custodian cannot find a successor
custodian as contemplated in this Section 10.3, then
Custodian shall have the right to deliver to the
Company all Securities and cash then owned by the
Company and to transfer any Securities held in a Book-
Entry System or Securities Depository to an account of
or for the Company. Thereafter, the Company shall be
deemed to be its own custodian and the Custodian shall
be relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as
agreed upon from time to time by the Company and the
Custodian. The fees and other charges in effect on the
date hereof and applicable to the Funds are set forth
in Exhibit C attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
The Company is a corporation organized under the
laws of the State of Maryland. The obligations of the
Company entered into in the name of the Company or on
behalf thereof by any of the Directors, officers,
employees or agents are made not individually, but in
such capacities, and are not binding upon any of the
Directors, officers, employees, agents or shareholders
of the Company or the Funds personally, but bind only
the assets of the Company, and all persons dealing with
any of the Funds of the Company must look solely to the
assets of the Company belonging to such Fund for the
enforcement of any claims against the Company.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands,
notices, instructions, and other communications to be
given hereunder shall be in writing and shall be sent
or delivered to the address set forth after its name
herein below:
To the Company:
Grand Prix Funds, Inc.
Xxxxxxx Executive Campus
00 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Custodian:
The Fifth Third Bank
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Area Manager-Trust Operations
Telephone: (000) 000-0000
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. Writing shall include
transmission by or through teletype, facsimile, central
processing unit connection, on-line terminal and
magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Ohio.
14.2 References to Custodian. The Company 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 or its registration statement for the
Company and such other printed matter as merely
identifies Custodian as custodian for the Company. The
Company shall submit printed matter requiring approval
to Custodian in draft form, allowing sufficient time
for review by Custodian and its counsel prior to any
deadline for printing.
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 shall
not be assignable by either party hereto without the
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, each of the parties hereto has
caused this Agreement to be executed and delivered in
its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year
first above written.
ATTEST: GRAND PRIX FUNDS, INC.
/s/Xxxxxxx Xxxxxxxxx By:/s/Xxxxxx Xxxxxxx
----------------------
Its:President
ATTEST: THE FIFTH THIRD BANK
_________________ By:/s/Xxxxx Xxxxxxx
----------------------
Its:Vice President
Dated: December 31, 1997
EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
GRAND PRIX FUNDS, INC. AND THE FIFTH THIRD BANK
December 31, 1997
Name of Fund Date
Grand Prix Fund 12/31/97
GRAND PRIX FUNDS,INC.
By:/s/ Xxxxxx Xxxxxxx
-----------------------
Its: President
THE FIFTH THIRD BANK
By:/s/ Xxxxx Xxxxxxx
-------------------------
Its: Vice President
Dated: December 31, 1997
EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
GRAND PRIX FUNDS, INC. AND THE FIFTH THIRD BANK
December 31, 1997
AUTHORIZED PERSONS
Set forth below are the names and specimen
signatures of the persons authorized by the Company to
Administer each Custody Account.
Name Signature
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
____________________________________ __________________________________
Xxxxxxx Xxxxxxxxx /s/ Xxxxxxx Xxxxxxxxx
____________________________________ __________________________________
Xxxx Xxxx Xxxxx /s/ Xxxx Xxxx Xxxxx
____________________________________ __________________________________
SIGNATURE RESOLUTION
RESOLVED, That all of the following officers of Grand
Prix Funds, Inc. any of them, namely the Chairman,
President, Vice President, Secretary and Treasurer, are
hereby authorized as signers for the conduct of
business for an on behalf of the Funds with THE FIFTH
THIRD BANK:
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
_____________________ CHAIRMAN ___________________
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
_____________________ PRESIDENT ___________________
_____________________ VICE PRESIDENT ___________________
_____________________ VICE PRESIDENT ____________________
_____________________ VICE PRESIDENT ____________________
_____________________ VICE PRESIDENT ____________________
Xxxx Xxxx Xxxxx /s/ Xxxx Xxxx Xxxxx
_____________________ TREASURER ____________________
Xxxxxxx Xxxxxxxxx /s/ Xxxxxxx Xxxxxxxxx
_____________________ SECRETARY ____________________
In addition, the following Assistant Treasurer is
authorized to sign on behalf of the Company for the
purpose of effecting securities transactions:
_____________________ ASSISTANT TREASURER _________________
The undersigned officers of Grand Prix Funds, Inc.
certify that the foregoing is within the parameters of
a Resolution adopted by Directors of the Company in a
meeting held December 10 ,1997, directing and authorizing
preparation of documents and to do everything necessary
to effect the Custody Agreement between GRAND PRIX FUNDS,
INC. and THE FIFTH THIRD BANK.
By:/s/ Xxxxxx Xxxxxxx
---------------------------
Its:President
By:/s/ Xxxxxxx Xxxxxxxxx
Its:Secretary
