1
Exhibit (8)(f)
February 14, 1997
Mercantile Bank National Association
One Mercantile Center
St. Louis, Missouri 63101
RE: Custody Fees for the ARCH Equity Index and ARCH
Bond Index Portfolios
-----------------------------------------------
Gentlemen:
This letter constitutes our agreement with respect to compensation to
be paid to Mercantile Bank National Association ("Mercantile") with respect to
the ARCH Equity Index Portfolio (comprised of Class P, Class P - Special Series
1 and Class P Special Series 2 shares) and the ARCH Bond Index Portfolio
(comprised of Class Q, Class Q - Special Series 1 and Class O - Special Series 2
shares) (each class a "Series") 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. 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 each Series as
follows:
o The ARCH Equity Index Portfolio - the greater of $6,000.00 or
$.30 for each $1,000.00 of the Series' average daily net
assets; and
o The ARCH Bond Index Portfolio - the greater of $6,000.00 or
$.30 for each $1,000.00 of the Series' average daily net
assets.
2. A transaction charge of $15.00 for each purchase, sale or delivery
of a security upon its maturity date, $50.00 for each interest collection or
claim item, $20.00 for each transaction involving GNMA, tax-free or other
non-depository registered items with monthly dividends or interest, $30.00 for
each purchase, sale or expiration of an option contract, $50.00 for each
2
Mercantile Bank National Association
February 14, 1997
Page Two
purchase, sale or expiration of a futures contract, and $15.00 for each
repurchase trade with an institution other than Mercantile;
3. Mercantile's incremental costs in providing foreign custody
services for foreign denominated and held securities; and
4. 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 Series.
The fee and expenses attributable to each Series shall be the
obligation of that Series 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 Series, 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.
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
-------------------------------
Xxxxx X. Xxxxxxx, President
ACCEPTED: MERCANTILE BANK
NATIONAL ASSOCIATION
By: /s/ XXXX X. XXXX
-------------------------------
Dated as of: February 14, 1997
