Exhibit (8)
Custody Agreement between
Rydex Series Trust and Star Bank, N.A.
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CUSTODY AGREEMENT
Agreement made as of the 30th day of November , 1993, between
Rydex Series Trust (the Trust ), a business trust organized under the laws
of Delaware and having its office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000 acting for and on behalf of all mutual fund
portfolios as are currently authorized and issued by the Trust or may be
authorized and issued by the Trust subsequent to the date of this Agreement
(the Fund ), which is operated and maintained by the Trust for the benefit
of the holders of shares of the Funds, and Star Bank, N.A. (The
Custodian ), a national banking association having its principal office
and place of business at Star Bank Center, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000, which Agreement provides for the furnishing of custodian
services to the Funds.
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth
the Trust, on behalf of the Funds, and the Custodian 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. Authorized Person shall be deemed to include the Chairman,
President, Secretary, and the Vice President, or any other person, whether
or not any such person is an officer or employee of the Trust, duly
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authorized by the Board of Trustees of the Trust to give Oral Instructions
on behalf of the Funds and listed in the Certificate annexed hereto as
Appendix A or such other Certificate as may be received by the Custodian
from time to time, subject in each case to any limitations on the authority
of such person as set forth in Appendix A or any such Certificate.
2. Book-Entry System shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees, provided the Custodian
has received a certified copy of a resolution of Board of Trustees of the
Trust specifically approving deposits in the Book-Entry System.
3. Certificate shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given
to the Custodian which is signed on behalf of the Funds by an Officer of
the Trust and is actually received by the Custodian.
4. Depository shall mean The Depository Trust Company ( DTC ), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term Depository
shall further mean and include any other person or clearing agency
authorized to act as a depository under the Investment Company Act of 1940,
its successor or successors and its nominee or nominees, provided that the
Custodian has received a certified copy of a resolution of the Board of
Trustees of the Trust specifically approving such other person or clearing
agency as a depository.
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5. Dividend and Transfer Agent shall mean the dividend and
transfer agent active, from time to time, in such capacity pursuant to a
written agreement with the Fund, changes in which the Trust shall
immediately report to the Custodian in writing.
6. Money Market Security shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and/or
i n t erest by the government of the United States or agencies or
i n s trumentalities thereof, commercial paper, obligations (including
certificates of deposit, bankers acceptances, repurchase and reverse
repurchase agreements with respect to the same) and bank time deposits of
domestic banks that are members of Federal Deposit Insurance Trust, and
short-term corporate obligations where the purchase and sale of such
securities normally require settlement in federal funds or their equivalent
on the same day as such purchase or sale.
7. Officers shall be deemed to include the Chairman, the
President, the Secretary, and Vice President of the Trust listed in the
Certificate annexed hereto as Appendix A or such other Certificate as may
be received by the Custodian from time to time.
8. Oral Instructions shall mean oral instructions actually
received by the Custodian from an Authorized Person (or from a person which
the Custodian reasonably believes in good faith to be an Authorized Person)
and confirmed by Written Instructions from Authorized Persons in such
manner so that such Written Instructions are received by the Custodian on
the next business day.
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9. Prospectus or Prospectuses shall mean the Funds currently
effective prospectus and statements of additional information, as filed
with and declared effective by the Securities and Exchange Commission.
10. Security or Securities shall mean Money Market Securities,
common or preferred stocks, options, futures, gold, silver, bonds,
d e b e ntures, corporate debt securities, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interest therein, or any
property or assets.
11. Written Instructions shall mean communication actually
received by the Custodian from one Authorized Person or from one person
which the Custodian reasonably believes in good faith to be an Authorized
Person in writing, telex or any other data transmission system whereby the
receiver of such communication is able to verify by codes or otherwise with
a reasonable degree of certainty the authenticity of the senders of such
communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Trust, acting for and on behalf of the Funds, hereby
constitutes and appoints the Custodian as custodian of all the Securities
and monies at any time owned by the Funds during the period of this
Agreement ( Fund Assets ).
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2. The Custodian hereby accepts appointments as such Custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE TRUST
The trust hereby agrees to furnish to the Custodian the following
documents:
1. A copy of its Declaration of Trust (the Declaration of Trust )
certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. A copy of the resolution of its Board of Trustees appointing
the Custodian certified by its Secretary.
4. A copy of the most recent Prospectuses of the Trust.
5. A Certificate of the President and Secretary setting forth the
names and signatures of the present Officers of the Trust.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
1. The Trust will deliver or cause to be delivered to the
Custodian all Fund Assets, including cash received for the issuance of its
shares, at any time during the period of this Agreement. The Custodian
will not be responsible for such Fund Assets until actually received by it.
Upon such receipt, the Custodian shall hold in safekeeping and physically
segregate at all times from the property of any other persons, firms or
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corporations all Fund Assets received by it from or for the account of the
Funds. Any credits from third parties that are made to the Funds account
by the Custodian may be reversed if the monies for them are not finally
collected within 90 days from the day the credits are made. The Custodian
is hereby authorized by the Trust, acting on behalf of the Funds, to
actually deposit any Fund Assets in the Book-Entry System or in a
D e pository, provided, however, that the Custodian shall always be
accountable to the Trust for the Fund Assets so deposited. Funds Assets
deposited in the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including but not limited to accounts in which the Custodian acts in a
fiduciary or representative capacity.
2. The Custodian shall credit to a separate account or accounts in
the name of each respective Fund all monies received by it for the account
of such Fund, and shall disburse the same only:
(a) In payment for Securities purchased for the account of such
Fund, as provided in Article V;
(b) In payment of dividends or distributions, as provided in
Article VI hereof;
(c) In payment of original issue or other taxes, as provided in
Article VII hereof;
(d) In payment for shares of such Fund redeemed by it, as provided
in Article VII hereof;
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(e) Pursuant to Certificates (i) directing payment and setting
forth the name and address of the person to whom the payment is
to be made, the amount of such payment and the purpose for
which payment is to be made (the Custodian not being required
to question such direction) or (ii) if reserve requirements are
established for the Fund by law or by valid regulation,
directing the Custodian to deposit a specified amount of
collected funds in the form of U.S. dollars at a specified
Federal Reserve bank and stating the purpose of such deposit;
or
(f) In reimbursement of the expenses and liabilities of the
Custodian, as provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the funds are
open and valuing their portfolios, the Custodian shall furnish the Trust
with a detailed statement of monies held for the Fund under this Agreement
and with confirmations and a summary of all transfers to or from the
account of the Funds during said day. Where Securities are transferred to
the account of the Fund without physical delivery, the Custodian shall also
identify as belonging to the Funds a quantity of Securities in a fungible
bulk of Securities registered in the name of the Custodian (or its nominee)
or shown on the Custodian s account on the books of the Book-Entry System
or the Depository. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities held
for the Funds under this Agreement.
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4. All Securities held for the Funds, which are issued or issuable
only in bearer form, except such Securities as are held in the Book-Entry
System, shall be held by the Custodian in that form; all other Securities
held for the Funds may be registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Trust agrees to 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 its registered nominee or in the
name of the Book-Entry System or the Depository, any Securities which it
may hold for the account of the Funds and which may from time to time be
registered in the name of the Funds. The Custodian shall hold all such
Securities which are not held in the Book-Entry System by the Depository or
a Sub-Custodian in a separate account or accounts in the name of the Funds
segregated at all times from those of any other fund maintained and
operated by the Trust and from those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate,
the Custodian shall with respect to all Securities held for the Funds in
accordance with this Agreement:
(a) Collect all income due or payable to the Funds with respect to
each Fund s Assets;
(b) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, or retired,
or otherwise become payable;
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(c) S u r r e nder Securities in temporary form to definitive
Securities;
(d) E x e c u te, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws or
the laws or regulations of any other taxing authority,
including any foreign taxing authority, now or hereafter in
effect; and
(e) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for
the account of the Funds all rights and similar securities
issued with respect to any Securities held by the Custodian
hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian
directly or through the use of the Book-Entry System or the Depository
shall:
(a) Execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any
other instruments whereby the authority or the Fund as owner of
any Securities may be exercised;
(b) Deliver any Securities held for the Funds in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation
or recapitalization of any corporation, or the exercise of any
conversion privilege;
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(c) Deliver any Securities held for the account of the Funds to any
protective committee, reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and received and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Funds and
take such other steps as shall be stated in said Certificate to
be for the purpose of effectuating any duly authorized plan of
l i quidation, reorganization, merger, consolidation or
recapitalization of the Funds.
7. The Custodian shall promptly deliver to the Trust all notices,
proxy material and executed but unvoted proxies pertaining to shareholder
meetings of Securities held by the Funds. The Custodian shall not vote or
authorize the voting of any Securities or give any consent, waiver or
approval with respect thereto unless so directed by a Certificate or
Written Instruction.
8. The Custodian shall promptly deliver to the Trust all material
received by the Custodian and pertaining to Securities held by the Funds
with respect to tender or exchange offers, calls for redemption or
purchase, expiration of rights, name changes, stock splits and stock
dividends, or any other activity involving ownership rights in such
Securities.
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ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase of Securities by the Funds, the
Trust shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate or Written
Instructions, and (ii) with respect to each purchase of Money Market
Securities, Written Instructions, a Certificate or Oral Instructions,
specifying with respect to each purchase: (a) The name of the issuer and
the title of the Securities, (b) the principal amount purchased and accrued
interest, if any, (c) the date of purchase and settlement, (d) the purchase
price per unit, (e) the total amount payable upon such purchase and (f) the
name of the person from whom or the broker through whom the purchase was
made. The Custodian shall upon receipt of Securities purchased by or for
the Funds, pay out of the monies held for the account of the Funds the
total amount payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the total amount
payable as set forth in such Certificate, Written Instructions or Oral
Instructions.
2. Promptly after each sale of Securities by the Trust for the
account of the Fund, the Trust shall deliver to the Custodian (i) with
respect to each sale of Securities which are not Money Market Securities, a
Certificate or Written Instructions, and (ii) with respect to each sale of
Money Market Securities, Written Instructions, a Certificate or Oral
Instructions, specifying with respect to each such sale: (a) the name of
the issuer and the title of the Security, (b) the principal amount sold,
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and accrued interest, if any, (c) the date of sale, (d) the sale price per
unit, (e) the total amount payable to the Funds upon such sale and (f) the
name of the broker through whom or the person to whom the sale was made.
The Custodian shall deliver the Securities upon receipt of the total amount
payable to the Funds upon such sale, provided that the same conforms to the
total amount payable as set forth in such Certificate, Written Instructions
or Oral Instructions. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
3. Promptly after the time as of which the Trust, on behalf of a
Fund, either -
(a) writes an option on Securities or writes a covered put option
in respect of a Security, or
(b) notifies the Custodian that its obligations in respect of any
put or call option, as described in the Trust s Prospectus,
r e quire that the Fund deposit Securities or additional
Securities with the Custodian, specifying the type and value of
Securities required to be so deposited, or
(c) notifies the Custodian that its obligations in respect of any
other Security, as described in each Fund s respective
Prospectus, require that the Fund deposit Securities or
additional Securities with the Custodian, specifying the type
and value of Securities required to be so deposited, the
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Custodian will cause to be segregated or identified as
deposited, pursuant to the Fund s obligations as set forth in
such Prospectus, Securities of such kinds and having such
aggregate values as are required to meet the Fund s obligations
in respect thereof. The Trust will provide to the Custodian,
as of the end of each trading day, the market value of each
Fund s option liability if any and the market value of its
portfolio of common stocks.
4. On contractual settlement date, the account of each respective
Fund will be charged for all purchases settling on that day, regardless of
whether or not delivery is made. On contractual settlement date, sale
proceeds will likewise be credited to the account of such Fund irrespective
of delivery.
In the case of sale fails , the Custodian may request the assistance
of the Funds in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Trust shall furnish to the Custodian a copy of the
resolution of the Board of Trustees, certified by the Secretary, either (i)
setting forth the date of the declaration of any dividend or distribution
in respect of shares of the Funds, the date of payment thereof, the record
date as of which Funds shareholders entitled to payment shall be
determined, the amount payable per share to Funds shareholders of record as
of that date and the total amount to be paid by the Dividend and Transfer
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Agent of the Funds on the payment date, or (ii) authorizing the declaration
of dividends and distributions in respect of shares of the Funds on a daily
basis and authorizing the Custodian to rely on Written Instructions or a
Certificate setting forth the date of the declaration of any such dividend
or distribution, the date of payment thereof, the record date as of which
Funds shareholders entitled to payment shall be determined, the amount
payable per share to Funds shareholders of record as of that date and the
total amount to be paid by the Dividend and Transfer Agent on the payment
date.
2. Upon the payment date specified in such resolution, Written
Instructions or Certificate, as the case may be, the Custodian shall
arrange for such payments to be made by the Dividend and Transfer Agent out
of monies held for the account of the Funds.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
1. The Custodian shall receive and credit to the account of each
Fund such payments for shares of such Fund issued or sold from time to time
as are received from the distributor for the Fund s shares, from the
Dividend and Transfer Agent of the Fund, or from the Trust.
2. Upon receipt of Written Instructions, the Custodian shall
arrange for payment of redemption proceeds to be made by the Dividend and
Transfer Agent out of the monies held for the account of the respective
Fund in the total amount specified in the Written Instructions.
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3. Notwithstanding the above provisions regarding the redemption
of any shares of the Fund, whenever shares of the Funds are redeemed
pursuant to any check redemption privilege which may from time to time be
offered by the Funds, the Custodian, unless otherwise subsequently
instructed by Written Instructions shall, upon receipt of any Written
Instructions setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the
check presented as part of such check redemption privilege out of the money
held in the account of the Funds for such purposes.
ARTICLE VIII
INDEBTEDNESS
In connection with any borrowings, the Trust on behalf of the Funds,
will cause to be delivered to the Custodian by a bank or broker (including
the Custodian, if the borrowing is from the Custodian), requiring
Securities as collateral for such borrowings, a notice or undertaking in
the form currently employed by any such bank or broker setting forth the
amount which such bank or broker will loan to the Funds against delivery of
a stated amount of collateral. The trust shall promptly deliver to the
Custodian a Certificate specifying with respect to each such borrowing: (a)
the name of the bank or broker; (b) the amount and terms of the borrowing,
which may be set forth by incorporating by reference an attached promissory
note, duly endorsed by the Trust, acting on behalf of the Fund, or other
loan agreement; (c) the date and time, if known, on which is to be entered
into; (d) the date on which the loan becomes due and payable; (e) the total
amount payable to the Fund on the borrowing date; (f) the market value of
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Securities collateralizing the loan, including the name of the issuer, the
title and the number of shares or the principal amount of any particular
Securities; and (g) a statement that such loan is in conformance with the
Investment Company Act of 1940 and the Fund s then current Prospectus. The
Custodian shall deliver on the borrowing date specified in a Certificate
the specified collateral and the executed promissory note, if any, against
delivery by the lending bank or broker of the total amount of the loan
payable provided that the same conforms to the total amount payable as set
forth in the Certificate. The Custodian may, at the option of the lending
bank or broker, keep such collateral in its possession, but such collateral
shall be subject to all rights therein given the lending bank or broker, by
virtue of any promissory note or loan agreement. The Custodian shall
deliver in the manner directed by the Trust from time to time such
Securities as additional collateral as may be specified in a Certificate to
collateralized further any transaction described in this paragraph. The
Trust shall cause all Securities released from collateral status to be
returned directly to the Custodian and the Custodian shall receive from
time to time such return of collateral as may be tendered to it. In the
event that the Trust fails to specify in a Certificate or Written
Instructions the name of the issuer, the title and number of shares or the
principal amount of any particular Securities to be delivered as collateral
by the Custodian, the Custodian shall not be under any obligation to
deliver any Securities. The Custodian may require such reasonable
conditions with respect to such collateral and its dealings with third-
party lenders as it may deem appropriate.
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ARTICLE IX
CONCERNING THE CUSTODIAN
1. Except as otherwise provided herein, the Custodian shall not be
liable for any loss or damage, including counsel fees, resulting from its
action or omission to act or otherwise, except for any such loss or damage
arising out of its negligence or willful misconduct. The Trust, on behalf
of the Funds and only from Fund Assets (or insurance purchased by the Trust
with respect to its liabilities on behalf of the Funds hereunder), shall
defend, indemnify and hold harmless the Custodian and its Trustees,
Officers, Employees and Agents with respect to any loss, claim, liability
or cost (including reasonable attorneys fees) arising or alleged to arise
from or relating to the Trust s duties with respect to the Funds hereunder
or any other action or inaction of the Trust or its Trustees, Officers,
Employees or Agents as to the Funds, except such as may arise from the
negligent action, omission or willful misconduct of the Custodian, its
Trustees, Officers, Employees or Agents. The Custodian shall defend,
indemnify and hold harmless the Trust and its Trustees, Officers, Employees
or Agents with respect to any loss, claim, liability or cost (including
reasonable attorneys fees) arising or alleged to arise from or relating to
the Custodian s duties with respect to the Funds hereunder or any other
action or inaction of the Custodian or its Trustees, Officers, Employees,
Agents, nominees or Sub-Custodians as to the Funds, except such as may
arise from the negligent action, omission or willful misconduct of the
Trust, its Trustees, Officers, Employees or Agents. The Custodian may,
with respect to questions of law apply for and obtain the advice and
opinion of counsel to the Trust at the expense of the Funds, or of its own
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counsel at its own expense, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with the advice
or opinion of counsel to the Trust, and shall be similarly protected with
respect to anything done or omitted by it in good faith in conformity with
advice or opinion of its counsel, unless counsel to the Funds shall, within
a reasonable time after being notified of legal advice received by the
Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising
by reason of any negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees, agents, nominees or Sub-Custodians but
not for any special, incidental, consequential, or punitive damages;
provided, however, that nothing contained herein shall preclude recovery by
the Trust, on behalf of the Funds, of principal and of interest to the date
of recovery on, Securities incorrectly omitted from the Fund s account or
penalties imposed on the Trust, in connection with the Funds, for any
failures to deliver Securities.
In any case in which one party hereto may be asked to indemnify the
other or hold the other harmless, the party from whom indemnification is
sought (the Indemnifying Party ) shall be advised of all pertinent facts
concerning the situation in question, and the party claiming a right to
indemnification (the Indemnified Party ) will use reasonable care to
identify and notify the Indemnifying Party promptly concerning any
situation which presents or appears to present a claim for indemnification
against the Indemnifying Party. The Indemnifying Party shall have the
option to defend the Indemnified Party against any claim which may be the
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subject of the indemnification, and in the event the Indemnifying Party so
elects, such defense shall be conducted by counsel chosen by the
Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall take over the complete defense of the claim and
the Indemnifying Party shall sustain no further legal or other expenses in
such situation for which indemnification has been sought under this
paragraph, except the expenses of any additional counsel retained by the
Indemnified Party. In no case shall any party claiming the right to
indemnification confess any claim or make any compromise in any case in
which the other party has been asked to indemnify such party (unless such
confession or compromise is made with such other party s prior written
consent).
The obligations of the parties hereto under this paragraph shall
survive the termination of this Agreement.
2. W i t hout limiting the generality of the foregoing, the
Custodian, acting in the capacity of Custodian hereunder, shall be under no
obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by or for
the account of the Funds, the legality of the purchase thereof,
or the propriety of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the
account of the Funds, or the propriety of the amount for which
the same are sold;
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(c) The legality of the issue or sale of any shares of the Funds,
or the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Funds, or
the propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by
the Trust in respect of shares of the Funds;
(f) The legality of any borrowing by the Trust on behalf of the
Funds using Securities as collateral;
(g) The sufficiency of any deposit made pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV
hereof.
3. The Custodian shall not be liable for any money or collected
funds in U.S. dollars deposited in a Federal Reserve Bank in accordance
with a Certificate described in clause (ii) of paragraph 2(e) of Article IV
hereof, nor be liable for or considered to be the Custodian of any money,
whether or not represented by any check, draft, or other instrument for the
payment of money, received by it on behalf of the Funds until the Custodian
actually receives and collects such money directly or by the final
crediting of the account representing the Fund s interest at the Book-Entry
System or Depository.
4. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Funds from the
Dividend and Transfer Agent of the Funds nor to take any action to effect
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payment or distribution by the Dividend and Transfer Agent of the Funds of
any amount paid by the Custodian to the Dividend and Transfer Agent of the
Funds in accordance with this Agreement.
5. Income due or payable to the Funds with respect to Funds Assets
will be credited to the account of the Funds as follows:
(a) Dividends will be credited on the first business day following
payable date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities
issued or guaranteed as to principal and/or interest by the
g o v ernment of the United States or agencies or
instrumentalities thereof (excluding securities issued by the
Government National Mortgage Association) will be credited on
payable date irrespective of collection.
(c) Interest on fixed rate corporate debt securities will be
credited on the first business day following payable date
irrespective of collection.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian
shall not be under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such amount is
payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action
by a Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action
or, at the Custodian s option, prepayment.
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7. The Custodian may appoint one or more financial or banking
institutions, as Depository or Depositories or as Sub-Custodian or Sub-
Custodians, including, but not limited to, banking institutions located in
foreign countries, of Securities and monies at any time owned by the Fund,
upon terms and conditions approved in a Certificate. Current Depository(s)
and Sub-Custodian(s) are noted in Appendix B. The Custodian shall not be
relieved of any obligation or liability under this Agreement in connection
with the appointment or activities of such Depositories or Sub-Custodians.
8. The Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for
the account of the Funds are such as properly may be held by the Funds
under the provisions of the Declarations of Trust and the Trust s By-Laws.
9. The Custodian shall treat all records and other information
relating to the Trust, the Funds and the Funds Assets as confidential and
shall not disclose any such records or information to any other person
unless (a) the Trust shall have consented thereto in writing or (b) such
disclosure is compelled by law.
10. The Custodian shall be entitled to receive and the Trust agrees
to pay to the Custodian, for the Fund s account from Fund Assets only, such
compensation as shall be determined pursuant to Appendix C attached hereto,
or as shall be determined pursuant to amendments to such Appendix approved
by the Custodian and the Trust, on behalf of the Funds. The Custodian
shall be entitled to charge against any money held by it for the accounts
of the Funds the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to reimbursement
22
under the provisions of this Agreement as determined by agreement of the
Custodian and the Trust or by the final order of any court or arbitrator
having jurisdiction and as to which all rights of appeal shall have
expired. The expenses which the Custodian may charge against the accounts
of the Funds include, but are not limited to, the expenses of Sub-
Custodians incurred in settling transactions involving the purchase and
sale of Securities of the Fund.
11. The Custodian shall be entitled to rely upon any Certificate if
such reliance is made in good faith. The Custodian shall be entitled to
rely upon any Oral Instructions and any Written Instructions actually
received by the Custodian pursuant to Article IV or V hereof. The Trust
agrees to forward to the Custodian Written Instructions from Authorized
Persons confirming Oral Instructions in such manner so that such Written
Instructions are received by the Custodian, whether by hand delivery, telex
or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Trust agrees that the
fact that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or enforceability
of the transactions hereby authorized by the Trust. The Trust agrees that
the Custodian shall incur no liability to the Funds in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions.
12. The Custodian will (a) set up and maintain proper books of
account and complete records of all transactions in the accounts maintained
by the Custodian hereunder in such manner as will meet the obligations of
the Funds under the Investment Company Act of 1940, with particular
23
attention to Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and
(b) preserve for the periods prescribed by applicable Federal statute or
regulation all records required to be so preserved. The books and records
of the Custodian shall be open to inspection and audit at reasonable times
and with prior notice by Officers and auditors employed by the Trust.
13. The Custodian and its Sub-Custodians shall promptly send to the
Trust, for the account of the Funds, any report received on the systems of
internal accounting control of the Book-Entry System or the Depository and
with such reports on their own systems of internal accounting control as
the Trust may reasonably request from time to time.
14. The Custodian performs only the services of a custodian and
shall have no responsibility for the management, investment or reinvestment
of the Securities from time to time owned by the Funds. The Custodian is
not a selling agent for shares of the Funds and performance of its duties
as a custodial agent shall not be deemed to be a recommendation to the
Custodian s depositors or others of shares of the Funds as an investment.
ARTICLE X
TERMINATION
1. Either of the parties hereto may terminate this Agreement for
any reason by giving to the other party a notice in writing specifying the
date of such termination, which shall be not less than ninety (90) days
after the date of giving of such notice. If such notice is given by the
Trust, on behalf of the Fund, it shall be accompanied by a copy of a
resolution of the Board of Trustees of the Trust, certified by the
24
Secretary or any Assistant Secretary, electing to terminate this Agreement
and designating a successor custodian or custodians, each of which shall be
a bank or trust company having not less than $2,000,000 aggregate capital,
surplus and undivided profits. In the event such notice is given by the
Custodian, the Trust shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of its Board of Trustees, certified by
the Secretary, designating a successor custodian or custodians to act on
behalf of the Funds. In the absence of such designation by the Trust, the
Custodian may designate a successor custodian which shall be a bank or
trust company having not less than $2,000,000 aggregate capital, surplus
and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received
a notice of acceptance by the successor custodian, shall deliver, on that
date, directly to the successor custodian all Securities and monies then
owned by the Funds and held by it as Custodian. Upon termination of this
Agreement the Trust shall pay to the Custodian on behalf of the Funds such
compensation as may be due as of the date of such termination. The Trust
agrees on behalf of the Funds that the Custodian shall be reimbursed for
its reasonable costs in connection with the termination of this Agreement.
2. If a successor custodian is not designated by the Trust, on
behalf of the Funds, or by the Custodian in accordance with the preceding
paragraph, or the designated successor cannot or will not serve, the Trust
shall upon the delivery by the Custodian to the Trust of all Securities
(other than Securities held in the Book-Entry System which cannot be
delivered to the Trust) and monies then owned by the Funds, other than
monies deposited with a Federal Reserve Bank pursuant to a Certificate
25
described in clause (ii) of paragraph 2(e) of Article IV, be deemed to be
the custodian for the Funds, and the Custodian shall thereby be relieved of
all duties and responsibilities pursuant to this Agreement other than the
duty with respect to Securities held in the Book-Entry System which cannot
be delivered to the Trust to hold such Securities hereunder in accordance
with this Agreement.
ARTICLE XI
MISCELLANEOUS
1. Appendix A sets forth the names and the signatures of all
Authorized Persons. The Trust agrees to furnish to the Custodian, on
behalf of the Funds, a new Appendix A in form similar to the attached
Appendix A, if any present Authorized Person ceases to be an Authorized
Person or if any other additional Authorized Persons are elected or
appointed. Until such new Appendix A shall be received, the Custodian
shall be fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized Persons as
set forth in the last delivered Appendix A.
2. No recourse under any obligation of this Agreement or for any
claim based thereon shall be had against any organizer, shareholder,
Officer, Trustee, past, present or future as such, of the Trust or of any
such predecessor or successor, whether by virtue of any constitution,
statute or rule of law or equity, or by the enforcement of any assessment
of penalty or otherwise; it being expressly agreed and understood that this
Agreement and the obligations thereunder are enforceable solely against
Fund Assets, and that no such personal liability whatever shall attach to,
26
or is or shall be incurred by, the organizers, shareholders, Officers,
Trustees of the Trust or of any predecessor or successor, or any of them as
such, because of the obligations contained in this Agreement or implied
therefrom and that any and all such liability is hereby expressly waived
and released by the Custodian as a condition of, and as a consideration
for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made
by the Trust have been made by the Trustees of the Trust, acting as such
Trustees for and on behalf of the Funds, pursuant to the authority vested
in them under the laws of the State of Delaware, the Declaration of Trust
and the By-Laws of the Trust. This Agreement has been executed by Officers
of the Trust as Officers, and not individually, and the obligations
contained herein are not binding upon any of the Trustees, Officers, Agents
or holders of shares, personally, but bind only the Trust and then only to
the extent of Fund Assets.
4. Such provisions of the Prospectuses of the Funds and any other
documents (including advertising material) specifically mentioning the
Custodian (other than merely by name and address) shall be reviewed with
the Custodian by the Trust.
5. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to
it at its offices at Star Bank Center, 000 Xxxxxx Xxxxxx, X.X. 0000,
00
Xxxxxxxxxx, Xxxx 00000, attention: Mutual Fund Custody Department, or at
such other place as the Custodian may from time to time designate in
writing.
6. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust shall be sufficiently
given when delivered to the Trust or on the second business day following
the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Trust at its office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000 or at such other place as the Trust may from time
to time designate in writing.
7. This Agreement with the exception of Appendices A & B may not
be amended or modified in any manner except by a written agreement executed
by both parties with the same formality as this Agreement, and authorized
and approved by a resolution of the Board of Trustees of the Trust.
8. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust or by the
Custodian, and no attempted assignment by the Trust or the Custodian shall
be effective without the written consent of the other party hereto.
9. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective Officers, thereunto duly authorized as of
the day and year first above written.
ATTEST: Rydex Series Trust
Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
ATTEST: Star Bank, N.A.
_______________________ By:/s/ Xxxxxxxx X. Xxxxxx
29
APPENDIX A
Authorized Persons Specimen Signatures
Chairman:
Xxxxxx X. Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx, Xx.
President:
Xxxxxx X. Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx, Xx.
Secretary:
Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
Vice President:
Xxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
Adviser Employees:
Xxxxx Xxxxx Apple /s/ Xxxxx Xxxxx Apple
Xxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
PAGE
APPENDIX B
T h e following Depository(s) and Sub-Custodian(s) are employed
currently by Star Bank, N.A. for securities processing and control...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
PAGE
SCHEDULE C
STAR BANK, N.A.
CUSTODY TRANSACTION FEE SCHEDULE
Star Bank, N.A. as Custodian, will receive monthly compensation for
services according to the terms of the following schedule:
I. Portfolio Transaction Fees:
a) For each repurchase agreement trans-
action $7.00
b) For each portfolio transaction processed
through DTC or Federal Reserve 11.00
c) For each portfolio transaction processed
through our New York custodian 25.00
d) For each GNMA/Amortized Security
Purchase 25.00
e) For each GNMA Prin/Int Paydowns,
GNMA Sales 8.00
f) For each option/future contract written,
exercise 25.00
g) For each Cedel/Euroclear transaction 100.00
h) For each Disbursement (Fund expenses
only) 5.00
A transaction is a purchase/sale of a security, free
receipt/free delivery (excludes initial conversion),
maturity, tender or exchange.
PAGE
II. Monthly Base Fee - Per Fund: $400.00
III. Out-of-Pocket Expenses
Star Bank shall be reimbursed for all out-of-pocket
expenses including, but not limited to postage,
insurance and long distance telephone charges.
IV. XXX Documents
Per shareholder/year to hold each XXX
document 8.00
V. Earnings Credits
On a monthly basis any earnings credits generated
from uninvested custody balances will be first
applied against any cash management service fees and
then to custody transaction fees (as referenced in
item #1 above). Earnings credits are based on the
average yield of the 91-day U.S. Treasury Xxxx for
the preceding thirteen weeks less the 10% reserve.
PAGE
