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Exhibit (g)(7)
February 12, 1999
Mercantile Trust Company National Association
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
RE: CUSTODY FEES FOR THE CONNING MONEY MARKET PORTFOLIO
Ladies and Gentlemen:
This letter constitutes our agreement with respect to
compensation to be paid to Mercantile Trust Company National Association
("Mercantile") with respect to the Conning Money Market Portfolio (the
"Portfolio") under the terms of the Custodian Agreement dated as of April 1,
1992 (the "Custodian Agreement") between The ARCH Fund, Inc. (the "Fund") and
Mercantile Bank National Association, as assigned to Mercantile Trust Company
National Association as of December 1, 1998. Pursuant to Paragraph 23 of the
Custodian Agreement, and in consideration of the services to be provided by you,
we will pay Mercantile the following:
1. An annual custody fee (exclusive of any transaction
charges), which shall be calculated daily and paid monthly (in arrears) for the
Portfolio as follows:
$.20 for each $1,000.00 of the Portfolio's average daily net
assets.
2. Mercantile's out-of-pocket expenses, including but not
limited to postage, telephone, telex, Federal Express and Federal Reserve wire
fees, on behalf of the Portfolio.
The fee and expenses attributable to the Portfolio shall be
the obligation of the Portfolio and not of any other portfolio of the Fund. The
fee for the period from the day of the year this agreement is entered into until
the end of that fiscal year of the Portfolio, or for any portion of a fiscal
year immediately prior to its termination, shall be pro-rated according to the
proportion which such period bears to the full annual period.
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Mercantile Trust Company National Association
February 12, 1999
Page 2
If the foregoing accurately sets forth our agreement and you
intend to be legally bound thereby, please execute a copy of this letter and
return it to us.
Very truly yours,
THE ARCH FUND, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
ACCEPTED: MERCANTILE TRUST COMPANY
NATIONAL ASSOCIATION
By: /s/ [signature illegible]
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Dated as of: February 12, 1999
