CUSTODY AGREEMENT
THIS MEMORANDUM OF AGREEMENT documents that ADVANCE CAPITAL I, INC.
CORNERSTONE STOCK FUND, as Principal
whose mailing address is Xxx Xxxxx Xxxxxx, Xxx 000, Xxxxxxxxxx, XX 00000
has deposited certain property with THE HUNTINGTON NATIONAL BANK, as
Custodian.
The Parties agree that the property in this Account, including property
which may be added later shall be administered as follows:
I. AUTHORITY OF THE CUSTODIAN
1. The Custodian is authorized to open and maintain a Custody Account
(the "Account") in the name of the Principal. The Custodian will
hold in the Account all stocks, bonds, securities and other property
which it receives for deposit into the Account.
2. The Custodian is authorized to hold stocks, bonds, certificates of
deposit and other securities or property in Principal's name, in
Custodian's name, or in the name of its nominee. The Custodian,
if it believes necessary, may use other agents and depositories
to hold any of the property in the Account.
3. The Custodian is authorized to collect and credit as income all
dividends, interest and other income on stocks, bonds, securities
and other property held in the Account.
4. The Custodian is authorized to credit as principal proceeds from
the sale or redemption of stocks, bonds, securities or other
property held in the Account.
5. The Custodian is authorized, upon instructions from Principal,
to place orders for the purchase and sale of stocks, bonds,
securities, repurchase options, conversion privileges, rights,
warrants or stock subscriptions and other property for the
Account. The Custodian may charge the costs and expenses of
such transactions to this Account, or any other account Principal
may have with Custodian.
6. The Custodian shall notify Principal when it receives actual
written notice of any calls for redemption or retirement,
subscription or conversion rights, exchange offers, tenders,
interest rate changes or similar matters relating to any
securities or other property which is now or was held in
the Account.
7. The Custodian may elect to credit the Account with interest or
dividend payments in anticipation of receiving such payments
from another agent. The Custodian is hereby authorized to
reverse any such credit if it does not receive the funds it
anticipated within a reasonable period of time.
8. Custodian shall have no responsibility to maintain separate
records for individual accounts of which Principal is
fiduciary and for which securities or property have been
deposited with or collected by Custodian. It is understood
that such records shall be maintained by Principal.
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II. INVESTMENT SERVICE
1. It is Principal's obligation to manage the investments in this
Account. The Custodian is under no duty to supervise or make
any reviews or recommendations with respect to the sale or other
disposition of any securities or other property at any time held
in this Account, except as provided in paragraph II. 3. below.
2. a. The Principal may employ Investment Counsel. After Custodian
has been notified in writing of the employment of Investment
Counsel it shall act in accordance with the instructions of
the Investment Counsel. The Custodian will only act on
Investment Counsel's instructions for the retention, purchase,
sale, exchange or other disposition of the assets held in the
Account. If the Custodian is not employed as the Investment
Counsel, Custodian is not authorized to deliver any assets of
the Account to Investment Counsel.
b. The Custodian shall not be liable for the acts of Investment
Counsel or Investment Counsel's agents. The Custodian shall
not be liable for any losses resulting from Investment
Counsel's directions or absence of directions.
c. The Custodian shall not be required to seek or obtain the
approval or direction of any person other than Principal or
Investment Counsel with respect to disposition of property
held in the Account except as otherwise provided in this
agreement. The Custodian shall not be required to advise
Principal of any direction received from Investment Counsel
before following the direction.
d. The Principal hereby designates
Advance Capital Management, Inc.
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(Name)
whose address is
Xxx Xxxxx Xxxxxx, Xxx 000, Xxxxxxxxxx, XX 00000
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as Investment Counsel for the property held in this Account.
(I) The Investment Counsel shall have full authority over
the investment of the property held in this Account, until
Custodian is notified in writing by Principal that such
authority has been revoked.
(II) The Investment Counsel shall place the buy and sell
orders with brokers or other persons through whom such
transactions will be accomplished. The Custodian's sole
duty and responsibility shall be to accept, pay for, and
deliver against payment any property of any nature as
directed in writing by Investment Counsel. The Investment
Counsel shall execute the letter of agreement attached as
Exhibit A, or such other similar agreement as shall be
acceptable to the Custodian.
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(iii) The Custodian shall not be required to accept delivery
and pay for any security purchased to the extent there are
insufficient funds in the Account to pay for such purchase.
The Custodian shall not have any responsibility for delivery
of a security not held in the Account.
(iv) The Custodian shall have no duty to inquire into whether
any property acquired or disposed of by Investment Counsel is
a proper investment or disposition of such asset. The
Custodian shall not have any responsibility to determine
whether the price or terms of conditions of any such
transaction are correct.
3. The Principal hereby directs Custodian to invest on a daily basis
available collected cash that has been credited to the Account.
Such investments may include registered mutual funds for which the
Custodian or its affiliates provide investment advisory and other
services. The Principal agrees that Custodian may receive
reasonable additional compensation for providing these services.
III. RELATIONS TO THIRD PARTIES
1. Every party dealing with Custodian shall be protected in relying
solely upon the representations of Custodian and shall not be
required to ascertain whether the approval or direction of
Principal has been obtained.
2. Unless Principal directs otherwise, Custodian shall have no duty
to disclose Principal's name, address and securities positions to
issuers of securities held in the Account, pursuant to SEC rules
implementing the Shareholder Communications Act.
3. All information and advice furnished under this Agreement by
either Party to the other, including their respective agents and
employees, shall be treated as confidential and shall not be
disclosed to third parties except as required by law.
IV. DUTIES OF THE CUSTODIAN
1. The Principal shall retain all voting rights pertaining to
securities in the Account. The Custodian shall forward to
Investment Counsel or, if none, to Principal, promptly upon
receipt, all proxies, proxy statements, notices of meetings or
similar proceedings affecting any securities or other property
at any time held in this Account. Any such proxy issued in the
name of Custodian or its nominee and so forwarded, shall be duly
signed, but otherwise unmarked, by Custodian or its nominee. The
Custodian shall be under no duty or obligation to make any
recommendation regarding the manner of voting of any such proxy,
or to determine whether and how such proxy is voted.
2. The Custodian will act on mergers, exchanges, tenders, warrants,
or legal proceedings only as instructed by Principal.
3. The Custodian shall have no duty to notify Principal of any rights,
duties, limitations, conditions or other information set forth in
any security (including mandatory or optional put, call and similar
provisions).
4. The Custodian shall forward to Principal information or mailings as
it deems appropriate or as directed in writing by Principal.
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5. Unless instructed to the contrary by Principal, Custodian shall
process security transactions through its trading facility or any
other trading facility it so chooses.
6. The Custodian shall at all times hold all funds and property in
the Account subject to the written instructions of Principal.
7. The Custodian shall provide at least annually to the Principal and
Investment Counsel, if any, periodic statements of account to
include receipts, disbursements and assets held.
8. The Custodian is required by Federal Law to furnish to Principal,
without any additional cost written notification of any security
transaction in the Account. The notification must be sent within
five (5) business days from the date of the transaction or from
the date of receipt by Custodian of the broker/dealer confirmation.
The Principal may elect as an alternative to receive transaction
information as part of its periodic statements of account, as set
forth in 7, above.
X a. Do not send notification of each individual transaction.
Transaction information will be consolidated on the periodic
report.
b. Send notification of each individual transaction.
V. RELATIONS BETWEEN PRINCIPAL AND CUSTODIAN
1. All written communications from Custodian to Principal shall be
sent by ordinary mail addressed to Principal at the last address
appearing on Custodian's records. Any written notice shall be
deemed received by the Principal three business days after the
day on which it is mailed to the Principal. In the event Custodian
determines that an emergency exists, it may use any other means of
communication it deems advisable.
2. The Custodian may rely upon instructions from the Principal
communicated by oral or electronic means, or in writing (including
telexes, telegrams, and facsimiles). The Principal agrees to
confirm in writing all oral instructions but failure to do so shall
not affect the Custodian's right to rely on those instructions. The
Principal further consents to the recording by Custodian of any
oral instructions given by the Principal or on the Principal's
behalf.
3. In the event the Principal is a fiduciary and shall for any reason
fail to complete the administration of its trust, all of the assets
then held by the Custodian shall be delivered by the Custodian
together with any accumulations of income less its just charges to
the duly appointed successor fiduciary.
4. Principal, if a fiduciary, represents and warrants to Custodian
that the instrument creating the fiduciary relationship does not
contain any limitations, prohibitions or restrictions regarding
investment of any funds. Further, Principal certifies that it is
legally empowered to enter into and perform this Agreement in such
capacity. Principal, in its individual capacity, hereby indemnifies
the Custodian and agrees to hold it harmless from any claim,
liability or expense resulting from any of the above statements
being incorrect.
5. Principal, if not a fiduciary, warrants that neither its Articles
of Incorporation, By-Laws, Regulations nor Partnership Agreement
contain any limitations or restrictions regarding investment of
any of its funds or the execution of this Agreement. It further
certifies that the actions of the person or persons on its
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behalf have been duly authorized. Principal has attached hereto
a valid copy of a Resolution of its Board of Directors or its
equivalent authorizing the appropriate officers, employees and
other Custodians of the same to act on its behalf in connection
with the Account.
6. The Custodian shall be bound by any judgement, order, injunction,
statute, governmental regulation, or writing of which it has
actual notice which legally limits, prohibits or restricts
transactions in the Account.
7. The custodian shall be compensated for its services rendered under
these instructions at the rates prescribed in its current schedule
of compensation subject to Custodian's right to change its schedule
upon prior written notice. The Custodian shall receive reasonable
additional compensation for any extraordinary services requested or
required. Such compensation shall be deductible by Custodian at
such times and from such sources as it may determine to be
appropriate. In addition, the Custodian shall be entitled to a
service charge as compensation for administrative costs resulting
from any overdraft occurring in the Account. Custodian's
compensation may be deducted from available cash or cash equivalents
held by the Account, unless Custodian and Principal make other
arrangements.
8. The Custodian shall be indemnified and held harmless by Principal
from and against all actions or causes of action, claims, demands,
liabilities, losses, damages, or expenses of whatsoever kind and
nature including, but not limited to, attorneys' fees, which it or
its nominee may at any time sustain or incur as a result of this
Agreement unless such cause or payment results from the Custodian's
gross negligence or willful misconduct. Included shall be acts of
the Investment Counsel, if any, and Custodian's failure to pay for
property purchased by the Investment Counsel by reason of
insufficiency of funds in the Account, and Custodian's failure to
deliver any property not held in the Account upon the direction of
the Investment Counsel. In connection therewith Custodian or its
nominee shall have a lien upon sufficient property held in this
Account, and upon any other deposit account of Principal, for its
compensation and expenses sustained or incurred as a result of this
Agreement.
9. If Custodian is acting as Settling Bank on behalf of principal for
the purpose of funds settlement with a securities clearing company
such as Depository Trust Company, Principal will obtain a Letter of
Credit on terms acceptable to Custodian and will deposit in the
Account such funds, securities or instruments as the Custodian may
require to secure payment of the Principal's settlement obligations.
If, at the end of any business day, the Custodian has a net debit
balance with any securities clearing company resulting from the
Principal's settlement obligations, and funds in the Account are
insufficient to pay the debit balance, the Custodian may, at its
discretion, debit any account which Principal maintains with the
Custodian or with any of its affiliates, or draw upon the Letter
of Credit, or both, in such amounts as are necessary to pay the
debit amount.
10. Except as otherwise set forth herein, Principal agrees that
Custodian shall have no responsibility for ascertaining or acting
upon any calls for redemption or retirement, subscription or
conversion rights, exchange offers, tenders, interest rate changes
or similar matters relating to any securities or other property
except at the instruction of the Principal. Custodian shall have
no responsibility for informing the Principal with respect to such
matters other than as set forth in Section I of this Agreement,
whether or not the Custodian has, or is deemed to have, knowledge
of any of these matters.
11. This Agreement may be modified, amended or supplemented at any
time by instrument in writing executed by all of the Parties
hereto. This Agreement may be terminated at any time by either
Party hereto upon written notice to the other Party.
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12. This Agreement shall be governed by the law of the State of Ohio.
The Custodian shall be under no obligation to determine whether or
not any instructions given to it are contrary to any provision of
law.
VI. BACKUP WITHHOLDING
Under the penalties of perjury, Principal certifies (by initialing the
following) that:
1. JCS a. The number shown at the end of this document is Principal's
--------correct Taxpayer Identification Number and
---
b. The Principal is not subject to backup withholding because
(I) Principal is exempt from backup withholding, or (ii)
Principal has not been notified by the Internal Revenue
Service (IRS) that Principal is subject to backup withholding
as a result of a failure to report all interest or dividends,
or (iii) the IRS has notified Principal that Principal is no
longer subject to backup withholding.
NOTE: If Principal is subject to backup withholding, paragraph VI.b.,
above is to be lined out.
Principal's Taxpayer Identification Number: 00-0000000
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IN WITNESS WHEREOF, the Parties hereto have subscribed their name to
duplicate originals this 24th day of July , 1998.
---- -------------- ----
The Huntington National Bank, (Custodian) Principal
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Title: Sr. Vice President Title: President
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EXHIBIT A
The Huntington National Bank
The Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
RE: Trading Confirmation
Account Number(s):
Dear Sir:
The undersigned has been appointed Investment Manager with respect to
assets of those accounts referenced above for which you act as Custodian.
Under the terms of the arrangement whereby you act as such Custodian, you
are required to act in accordance with our written instructions regarding
investment of such assets, unless a different method of instruction is
agreed upon by us.
We have agreed to use an institutional delivery system which will provide
us with electronic broker trade confirmations of securities and/or financial
transactions that we have entered into on behalf of those accounts referenced
above. After comparing our trade data with each confirmation, we shall affirm
to an institutional delivery system, as soon after receipt of the confirmation
as possible, but no later than trade date plus one (12 noon Eastern time on
trade date plus two for cancellations and corrections only), through an
acknowledgment procedure acceptable to an institutional delivery system,
all trades whose confirmations accurately reflect the trades which we have
entered into, such affirmations constituting our deliver and/or receive
instructions. Alternatively, we may choose to use the matching facilities
of an institutional delivery system, which will effect an automatic
comparison of our "institutional instructions" with the broker trade
confirmations. All trades whose confirmations accurately match the trades
we have entered into, as evidenced by our institutional instructions, or
fall within the tolerance parameters we have set in the institutional
delivery system's standing instructions database, shall be affirmed,
such matched affirmations constituting our delivery and/or receive
instructions. Upon receipt of our affirmations through the said
acknowledgment or matching procedures, an institutional delivery system
shall send deliver and/or receive instructions to you in form of an
affirmed or matched confirmation.
In the event an institutional delivery system broker trade confirmation
does not accurately reflect the transaction in question, we shall not
affirm, nor will the institutional delivery system match, the transaction
in question and the institutional delivery system shall not send you our
deliver and/or receive instructions.
Accordingly, this letter is to confirm our understanding and agreement
with you that you are authorized to act in accordance with, and shall
be entitled to rely on, and be protected in acting on those deliver
and/or receive instructions received by you as affirmed confirmation
or matched affirmed confirmations through an institutional delivery
system that contain one of the above-referenced bank account numbers
in the defined "agent internal account number" field, to the same
extent as if the information contained in such instructions was given
in written form, signed by us. In the event that an institutional
delivery system for any reason does not furnish you an affirmed or
matching affirmed confirmation, we shall provide you with instructions
in written form as to trades that said confirmation would otherwise
have contained. This letter will constitute written instructions to
you in accordance with the terms of the arrangements referenced in the
first paragraph above.
Investment Manager's Ad Hoc Agreement
Huntington National Bank
Page 2
This agreement shall not preclude our use of written instructions for
security transactions and/or other matters when we deem them necessary
or advisable. You are authorized to act in accordance with, and shall
be entitled to rely on, and be protected in acting on such written
instructions. However, in the event a broker trade confirmation is
affirmed or an institutional instruction is matched affirmed by the
institutional delivery system, said affirmation shall take precedent
over the written authorization received for that trade.
This agreement shall become effective with the transactions entered into
by us on (Trade Date).
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If the foregoing is acceptable to you, please execute and return a copy
of this letter agreement, upon which it will become effective. This
agreement may be canceled by either party upon written notice to the
other party.
Advance Capital Management, Inc.
Investment Manager
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx - President
