CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of June,
2007, by and between PMFM INVESTMENT TRUST, a Delaware statutory trust (the
"Trust"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America with its
principal place of business at Cincinnati, Ohio (the "Custodian").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Custodian is a bank having the qualifications prescribed
in Section 26(a)(1) of the 1940 Act; and
WHEREAS, the Trust desires to retain the Custodian to act as custodian
of the cash and securities of each series of the Trust listed on Exhibit C
hereto (as amended from time to time) (each a "Fund" and collectively, the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings set forth below unless the context otherwise requires:
1.1 "Authorized Person" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund
and named in Exhibit A hereto or in such resolutions of the
Board of Trustees, certified by an Officer, as may be received
by the Custodian from time to time.
1.2 "Board of Trustees" shall mean the trustees from time to time
serving under the Trust's declaration of trust, as amended
from time to time.
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 Trust computes the net asset value of Shares of
the Fund.
1.5 "Eligible Securities Depository" shall mean a system for the
central handling of securities as that term is defined in Rule
17f-4 and 17f-7 under the 1940 Act.
1.6 "Fund Custody Account" shall mean any of the accounts in the
name of the Trust, which is provided for in Section 3.2 below.
1.7 "IRS" shall mean the Internal Revenue Service.
1.8 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.9 "Officer" shall mean the Chairman, President, any Vice
President, the Chief Compliance Officer, any Assistant Vice
President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Trust.
1.10 "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
Trust shall cause all Oral Instructions to be confirmed by
Written Instructions prior to the end of the next Business
Day. 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 Trust. If Oral Instructions vary
from the Written Instructions that purport to confirm them,
the Custodian shall notify the Trust of such variance but such
Oral Instructions will govern unless the Custodian has not yet
acted.
1.11 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.12 "SEC" shall mean the Securities and Exchange Commission.
1.13 "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 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 or its agents have the facilities to
clear and service.
1.14 "Securities Depository" shall mean The Depository Trust
Company and any other clearing agency registered with the SEC
under Section 17A of the Securities Exchange Act of 1934, as
amended (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.
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1.15 "Shares" shall mean, with respect to a Fund, the units of
beneficial interest issued by the Trust on account of the
Fund.
1.16 "Sub-Custodian" shall mean and include (i) any branch of a
"U.S. bank," as that term is defined in Rule 17f-5 under the
1940 Act, and (ii) any "eligible foreign custodian," as that
term is defined in Rule 17f-5 under the 1940 Act, having a
contract with the Custodian which the Custodian has determined
will provide reasonable care of assets of the Fund based on
the standards specified in Section 3.3 below. Such contract
shall be in writing and shall include provisions that provide:
(i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be
adequately protected against the risk of loss of assets held
in accordance with such contract; (ii) that the Fund's assets
will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the Sub-Custodian or its
creditors except a claim of payment for their safe custody or
administration, in the case of cash deposits, liens or rights
in favor of creditors of the Sub-Custodian arising under
bankruptcy, insolvency, or similar laws; (iii) that beneficial
ownership for the Fund's assets will be freely transferable
without the payment of money or value other than for safe
custody or administration; (iv) that adequate records will be
maintained identifying the assets as belonging to the Fund or
as being held by a third party for the benefit of the Fund;
(v) that the Trust's independent public accountants will be
given access to those records or confirmation of the contents
of those records; and (vi) that the Fund will receive periodic
reports with respect to the safekeeping of the Fund's assets,
including, but not limited to, notification of any transfer to
or from a Fund's account or a third party account containing
assets held for the benefit of the Fund. Such contract may
contain, in lieu of any or all of the provisions specified in
(i)-(vi) above, such other provisions that the Custodian
determines will provide, in their entirety, the same or a
greater level of care and protection for Trust assets as the
specified provisions.
1.17 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized
Person or, (ii) communications by telex or electronic
communication or any other such system from one or more
persons reasonably believed by the Custodian to be Authorized
Persons.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby appoints the Custodian as
custodian of all Securities and cash owned by or in the
possession of the Fund at any time during the period of this
Agreement, on the terms and conditions set forth in this
Agreement, and the Custodian hereby accepts such appointment
and agrees to perform the services and duties set forth in
this Agreement. The services and duties of the Custodian shall
be confined to those matters expressly set forth herein, and
no implied duties are assumed by or may be asserted against
the Custodian hereunder.
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2.2 Documents to be Furnished. The following documents, including
any amendments thereto, will be provided contemporaneously
with the execution of the Agreement to the Custodian by the
Trust:
(a) A copy of the Trust's declaration of trust, certified by
the Secretary;
(b) A copy of the Trust's bylaws, certified by the
Secretary;
(c) A copy of the resolution of the Board of Trustees of the
Trust appointing the Custodian, certified by the
Secretary;
(d) A copy of the current prospectus of the Fund (the
"Prospectus");
(e) A certification of the Chairman or the President and the
Secretary of the Trust setting forth the names and
signatures of the current Officers of the Trust and
other Authorized Persons; and
(f) An executed authorization required by the Shareholder
Communications Act of 1985, attached hereto as Exhibit
E.
2.3 Notice of Appointment of Transfer Agent. The Trust agrees to
notify the Custodian in writing of the appointment,
termination or change in appointment of any transfer agent of
the Fund.
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 (other than Securities
maintained in a Securities Depository, Eligible Securities
Depository or Book-Entry System) shall be physically
segregated from other Securities and non-cash property in the
possession of the Custodian (including the Securities and
non-cash property of the other series of the Trust) and shall
be identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall
open and maintain in its trust department a custody account in
the name of the Trust coupled with the name of the 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 such Fund which are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodian to establish and maintain arrangements
with (i) Eligible Securities Depositories or (ii)
members of the Sub-Custodian's network to hold
Securities and cash of the Fund and to carry out such
other provisions of this Agreement as it may determine;
provided, however, that the appointment of any such
agents and maintenance of any Securities and cash of the
Fund shall be at the Custodian's expense and shall not
relieve the Custodian of any of its obligations or
liabilities under this Agreement. The Custodian shall be
liable for the actions of any Sub-Custodians (regardless
of whether assets are maintained in the custody of a
Sub-Custodian, a member of its network
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or an Eligible Securities Depository) appointed by it as
if such actions had been done by the Custodian.
(b) The agreement between the Custodian and each
Sub-Custodian acting hereunder shall be in a written
contract containing the required provisions set forth in
Rule 17f-5(c)(2) under the 1940 Act.
(c) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Trustees
of the placement of the Securities and cash of the Fund
with a Sub-Custodian and of any material changes in the
Fund's custody arrangements. Such reports shall include
an analysis of the custody risks associated with
maintaining assets with any Eligible Securities
Depositories.
(d) The Custodian shall promptly take such steps as may be
required to withdraw assets of the Fund from any
Sub-Custodian arrangement that has ceased to meet the
requirements of Rule 17f-5 or Rule 17f-7 under the 1940
Act, as applicable.
(e) With respect to its responsibilities under this Section
3.3, the Custodian hereby warrants to the Trust that it
agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the
safekeeping of property of the Fund. The Custodian
further warrants that the Fund's assets will be subject
to reasonable care if maintained with a Sub-Custodian,
after considering all factors relevant to the
safekeeping of such assets, including, without
limitation: (i) the Sub-Custodian's practices,
procedures, and internal controls for certificated
securities (if applicable), its method of keeping
custodial records, and its security and data protection
practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care
for Fund assets; (iii) the Sub-Custodian's general
reputation and standing and, in the case of a Securities
Depository, the Securities Depository's operating
history and number of participants; and (iv) whether the
Fund will have jurisdiction over and be able to enforce
judgments against the Sub-Custodian, such as by virtue
of the existence of any offices of the Sub-Custodian in
the United States or the Sub-Custodian's consent to
service of process in the United States.
(f) The Custodian shall establish a system and ensure that
each Sub-Custodian engaged from time to time to hold
assets of the Fund has established a system to monitor
(i) the appropriateness of maintaining the Fund's assets
with a Sub-Custodian or members of a Sub-Custodian's
network; (ii) the performance of the contract governing
the Fund's and the Custodian's arrangements with such
Sub-Custodian or members of a Sub-Custodian's network;
and (iii) the custody risks of maintaining assets with
an Eligible Securities Depository.
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(g) The Custodian shall use reasonable commercial efforts to
collect all income and other payments with respect to
foreign Securities to which the Fund shall be entitled
and shall credit such income, as collected, to the
Trust. In the event that extraordinary measures are
required to collect such income, the Trust and Custodian
shall consult as to the measures and as to the
compensation and expenses of the Custodian relating to
such measures.
3.4 Delivery of Assets to Custodian. The Trust shall deliver, or
cause to be delivered, to the Custodian all of the Fund's
Securities, cash and other investment assets, including (i)
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 (ii) all cash
received by the Fund for the issuance 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 Fund in a
Securities Depository or in a Book-Entry System, subject to
the following provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all
Securities eligible for deposit therein and shall 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 with respect to Securities
of the Fund maintained in a Book-Entry System or
Securities Depository shall, by book-entry, 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
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records of the Custodian to reflect such transfer and
payment for the account of the Fund.
(e) The Custodian shall provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry
System or Securities Depository in which Securities of
the Fund are kept) on the internal accounting controls
and procedures for safeguarding Securities deposited in
such Book-Entry System or Securities Depository.
(f) Notwithstanding anything to the contrary in this
Agreement, the Custodian shall be liable to the Trust
for any loss or damage to the Fund resulting from (i)
the use of a Book-Entry System or Securities Depository
by reason of any negligence or willful misconduct on the
part of the Custodian or any Sub-Custodian, or (ii)
failure of the Custodian or any Sub-Custodian to enforce
effectively such rights as it may have against a
Book-Entry System or Securities Depository. At its
election, the Trust 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 from any loss or damage to the Fund arising from
the use of such Book-Entry System or Securities
Depository, if and to the extent that the Fund has not
been made whole for any such loss or damage.
(g) With respect to its responsibilities under this Section
3.5 and pursuant to Rule 17f-4 under the 1940 Act, the
Custodian hereby warrants to the Trust that it agrees to
(i) exercise due care in accordance with reasonable
commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter
maintain such assets, (ii) provide, promptly upon
request by the Trust, such reports as are available
concerning the Custodian's internal accounting controls
and financial strength, and (iii) require any
Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty
as a securities intermediary to obtain and thereafter
maintain assets corresponding to the security
entitlements of its entitlement holders.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt
of Proper Instructions, the Custodian shall disburse moneys
from the Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance 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) of such Securities registered as
provided in Section 3.9 below or 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 any
Sub-Custodian) of such receipts as are
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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 any Sub-Custodian) of evidence of title
thereto in favor of the Fund 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 Trust and a bank which is a member of the Federal
Reserve System or between the Trust 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 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 Fund, including, but not limited to, the following
payments for the account of the Fund: interest; taxes;
administration, investment advisory, accounting,
auditing, transfer agent, custodian, director and legal
fees; and other operating expenses of the 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 Trust, 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
Fund;
(g) For transfer in accordance with the provisions of any
agreement among the Trust, 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 Fund;
(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 purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an
Officer, specifying the amount and purpose of such
payment, declaring
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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 Account. Upon receipt
of Proper Instructions, the Custodian shall release and
deliver, or cause the Sub-Custodian to release and deliver,
Securities from the Fund Custody Account but only in the
following cases:
(a) Upon the sale of Securities for the account of the 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 the
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 Fund, the Custodian or any
Sub-Custodian, or 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 the 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 the 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 the Fund, but only against receipt of such collateral
as the Trust shall have specified to the Custodian in
Proper Instructions;
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(j) For delivery as security in connection with any
borrowings by the Fund requiring a pledge of assets by
the Trust, 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 Trust;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, 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
Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust, 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 Fund; or
(n) For any other proper corporate purpose, but only upon
receipt, in addition to Proper Instructions, of a copy
of a resolution of the Board of Trustees, 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 Trust, the Custodian shall with respect to
all Securities held for the Fund:
(a) Subject to Section 9.4 below, collect on a timely basis
all income and other payments to which the Fund is
entitled either by law or pursuant to custom in the
securities business;
(b) Present for payment and, subject to Section 9.4 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 Fund, 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
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submit, as directed by the Trust, reports to the IRS and
the Trust at such time, in such manner and containing
such information as is prescribed by the IRS;
(f) Hold for the 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 the sale, exchange, substitution,
purchase, transfer and other dealings with Securities
and other assets of the Fund.
3.9 Registration and Transfer of Securities. All Securities held
for the 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 if
eligible therefor. All other Securities held for the Fund may
be registered in the name of the Fund, the Custodian, a
Sub-Custodian or any nominee thereof, or in the name of a
Book-Entry System, Securities Depository or any nominee of
either thereof. The records of the Custodian with respect to
foreign securities of the Fund that are maintained with a
Sub-Custodian in an account that is identified as belonging to
the Custodian for the benefit of its customers shall identify
those securities as belonging to the Fund. The Trust 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 referred to
above or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of the Fund.
3.10 Records.
(a) The Custodian shall maintain complete and accurate
records with respect to Securities, cash or other
property held for the Fund, 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 receivable; and
(iii) canceled checks and bank records related thereto.
The Custodian shall keep such other books and records of
the Fund as the Trust shall reasonably request, or as
may be required by the 1940 Act, including, but not
limited to, Section 31 of the 1940 Act 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
Trust and in compliance with the rules and regulations
of the SEC, (ii) be the property of the Trust and at all
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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 Trust
and employees or agents of the SEC, and (iii) if
required to be maintained by Rule 31a-1 under the 1940
Act, be preserved for the periods prescribed in Rules
31a-1 and 31a-2 under the 1940 Act.
3.11 Fund Reports by Custodian. The Custodian shall furnish the
Trust with a daily activity statement and a summary of all
transfers to or from each Fund Custody Account on the day
following such transfers. At least monthly, the Custodian
shall furnish the Trust with a detailed statement of the
Securities and moneys held by the Custodian and the
Sub-Custodians for the Fund under this Agreement.
3.12 Other Reports by Custodian. As the Trust may reasonably
request from time to time, the Custodian shall provide the
Trust with reports on the internal accounting controls and
procedures for safeguarding Securities which are employed by
the Custodian or any Sub-Custodian.
3.13 Proxies and Other Materials. The Custodian shall cause all
proxies relating to Securities which are not registered in the
name of the 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 promptly deliver
to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities. With respect to the
foreign Securities, the Custodian will use reasonable
commercial efforts to facilitate the exercise of voting and
other shareholder rights, subject to the laws, regulations and
practical constraints that may exist in the country where such
securities are issued. The Trust acknowledges that local
conditions, including lack of regulation, onerous procedural
obligations, lack of notice and other factors may have the
effect of severely limiting the ability of the Trust to
exercise shareholder rights.
3.14 Information on Corporate Actions. The Custodian shall promptly
deliver to the Trust all information received by the Custodian
and pertaining to Securities being held by the Fund with
respect to optional tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Exhibit B. If
the Trust desires to take action with respect to any tender
offer, exchange offer or other similar transaction, the Trust
shall notify the Custodian at least five Business Days prior
to the date on which the Custodian is to take such action. The
Trust will provide or cause to be provided to the Custodian
all relevant information for any Security which has unique
put/option provisions at least five 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 Fund, Written Instructions shall be
delivered to the Custodian, specifying (i) the name of
12
the issuer or writer of such Securities, and the title or
other description thereof, (ii) the number of shares,
principal amount (and accrued interest, if any) or other units
purchased, (iii) the date of purchase and settlement, (iv) the
purchase price per unit, (v) the total amount payable upon
such purchase, and (vi) the name of the person to whom such
amount is payable. The Custodian shall upon receipt of such
Securities purchased by the Fund pay out of the moneys held
for the account of the 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 the Fund, if
in the Fund 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 the Fund is made by the Custodian
in advance of receipt of the Securities purchased and in the
absence of specified Written Instructions to so pay in
advance, the Custodian shall be liable to the Fund for such
payment.
4.3 Sale of Securities. Promptly upon each sale of Securities by
the Fund, Written Instructions shall be delivered to the
Custodian, specifying (i) the name of the issuer or writer of
such Securities, and the title or other description thereof,
(ii) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (iii) the date of sale
and settlement, (iv) the sale price per unit, (v) the total
amount payable upon such sale, and (vi) the person to whom
such Securities are to be delivered. Upon receipt of the total
amount payable to the Fund 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 Fund 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
for the foregoing.
4.5 Payment for Securities Sold. In its sole discretion and from
time to time, the Custodian may credit the Fund 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 Fund, and
(iii) income from cash, Securities or other assets of the
Fund. Any such credit shall be conditional upon actual receipt
by Custodian of final payment and may be reversed if final
payment is not
13
actually received in full. The Custodian may, in its sole
discretion and from time to time, permit the Fund to use funds
so credited to the Fund 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 Fund 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 Trust to facilitate the settlement of a Fund's
transactions in the Fund Custody Account. Any such advance
shall be repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt
of Proper Instructions specifying that the funds are required
to redeem Shares of the Fund, the Custodian shall wire each
amount specified in such Proper Instructions to or through
such bank or broker-dealer as the Trust may designate.
5.2 No Duty Regarding Paying Banks. Once the Custodian has wired
amounts to a bank or broker-dealer pursuant to Section 5.1
above, the Custodian shall not be under any obligation to
effect any further payment or distribution by such bank or
broker-dealer.
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 the 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 Trust, 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 Fund;
(b) for purposes of segregating cash or Securities in
connection with securities options purchased or written
by the Fund, or financial futures contracts (or options
thereon) purchased or sold by the Fund, or short sales
by the Fund;
(c) which constitute collateral for loans of Securities made
by the Fund;
14
(d) for purposes of compliance by the Fund with requirements
under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in
connection with short sales, 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 Trustees,
certified by an Officer, setting forth the purpose or
purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
COMPENSATION OF CUSTODIAN
7.1 Compensation. The Custodian shall be compensated for providing
the services set forth in this Agreement in accordance with
the fee schedule set forth on Exhibit D hereto (as amended
from time to time). The Custodian shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication
charges, postage and delivery charges, and reproduction
charges) as are reasonably incurred by the Custodian in
performing its duties hereunder. The Trust shall pay all such
fees and reimbursable expenses within 30 calendar days
following receipt of the billing notice, except for any fee or
expense subject to a good faith dispute. The Trust shall
notify the Custodian in writing within 30 calendar days
following receipt of each invoice if the Trust is disputing
any amounts in good faith. The Trust shall pay such disputed
amounts within 10 calendar days of the day on which the
parties agree to the amount to be paid. With the exception of
any fee or expense the Trust is disputing in good faith as set
forth above, unpaid invoices shall accrue a finance charge of
1 1/2% per month after the due date. Notwithstanding anything
to the contrary, amounts owed by the Trust to the Custodian
shall only be paid out of the assets and property of the
particular Fund involved.
7.2 Overdrafts. The Trust is responsible for maintaining an
appropriate level of short term cash investments to
accommodate cash outflows. The Trust may obtain a formal line
of credit for potential overdrafts of its custody account. In
the event of an overdraft or in the event the line of credit
is insufficient to cover an overdraft, the overdraft amount or
the overdraft amount that exceeds the line of credit will be
charged in accordance with the fee schedule set forth on
Exhibit D hereto (as amended from time to time).
15
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Trust. The Trust hereby
represents and warrants to the Custodian, which
representations and warranties shall be deemed to be
continuing throughout the term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to
carry on its business as now conducted, to enter into
this Agreement and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Trust in accordance with all requisite
action and constitutes a valid and legally binding
obligation of the Trust, enforceable in accordance with
its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general
application affecting the rights and remedies of
creditors and secured parties; and
(c) It is conducting its business in compliance in all
material respects with all applicable laws and
regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its
business as now conducted; there is no statute, rule,
regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding
it or affecting its property which would prohibit its
execution or performance of this Agreement.
8.2 Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to the Trust, which
representations and warranties shall be deemed to be
continuing throughout the term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to
carry on its business as now conducted, to enter into
this Agreement and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Custodian in accordance with all
requisite action and constitutes a valid and legally
binding obligation of the Custodian, enforceable in
accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of
creditors and secured parties;
(c) It is conducting its business in compliance in all
material respects with all applicable laws and
regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its
business as now conducted; there is no statute, rule,
regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding
it or affecting its
16
property which would prohibit its execution or
performance of this Agreement; and
(d) It will maintain a disaster recovery plan and procedures
including provisions for emergency use of electronic
data processing equipment, which is reasonable in light
of the services to be provided ("Disaster Recovery
Plan"), and it will, at no additional expense to the
Trust, take reasonable steps to minimize service
interruptions in the event of a disaster.
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 Standard of Care. The Custodian shall exercise reasonable care
in the performance of its duties under this Agreement. The
Custodian shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in
connection with its duties under this Agreement, except a loss
arising out of or relating to the Custodian's (or a
Sub-Custodian's) refusal or failure to comply with the terms
of this Agreement (or any sub-custody agreement) or from its
(or a Sub-Custodian's) bad faith, negligence or willful
misconduct in the performance of its duties under this
Agreement (or any sub-custody agreement). The Custodian shall
be entitled to rely on and may act upon advice of Counsel to
the Trust 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 Trust of any
action taken or omitted by the Custodian pursuant to advice of
Counsel to the Trust.
9.2 Actual Collection Required. The Custodian shall not be liable
for, or considered to be the custodian of, any cash belonging
to the Fund 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.
9.3 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.
9.4 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 Fund if such Securities are in default or payment
is not made after due demand or presentation.
9.5 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 any Written Instructions
actually received by it pursuant to this Agreement.
17
9.6 Cooperation. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by
the Trust to keep the books of account of the Fund and/or
compute the value of the assets of the Fund. The Custodian
shall take all such reasonable actions as the Trust may from
time to time request to enable the Trust to obtain, from year
to year, favorable opinions from the Trust's independent
accountants with respect to the Custodian's activities
hereunder in connection with (i) the preparation of the
Trust's reports on Form N-1A, Form N-CSR and Form N-SAR and
any other reports required by the SEC, and (ii) the
fulfillment by the Trust of any other requirements of the SEC.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by Trust. The Trust shall indemnify and hold
harmless the Custodian, any Sub-Custodian and any nominee
thereof (each, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all claims,
demands, losses, expenses and liabilities of any and every
nature (including reasonable attorneys' fees) that an
Indemnified Party may sustain or incur or that may be asserted
against an Indemnified Party by any person arising directly or
indirectly (i) from the fact that Securities are registered in
the name of any such nominee, (ii) from any action taken or
omitted to be taken by the Custodian or such Sub-Custodian (a)
at the request or direction of or in reliance on the advice of
the Trust, or (b) upon Proper Instructions, or (iii) from the
performance of its obligations under this Agreement or any
sub-custody agreement, provided that neither the Custodian nor
any such Sub-Custodian shall be indemnified and held harmless
from and against any such claim, demand, loss, expense or
liability arising out of or relating to its refusal or failure
to comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful
misconduct in the performance of its duties under this
Agreement (or any sub-custody agreement). This indemnity shall
be a continuing obligation of the Trust, its successors and
assigns, notwithstanding the termination of this Agreement. As
used in this paragraph, the terms "Custodian" and
"Sub-Custodian" shall include their respective directors,
officers and employees.
10.2 Indemnification by Custodian. The Custodian shall indemnify
and hold harmless the Trust from and against any and all
claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys' fees) that the
Trust may sustain or incur or that may be asserted against the
Trust by any person arising out of any action taken or omitted
to be taken by an Indemnified Party as a result of the
Indemnified Party's refusal or failure to comply with the
terms of this Agreement (or any sub-custody agreement), or
from its bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement (or any
sub-custody agreement). This indemnity shall be a continuing
obligation of the Custodian, its successors and assigns,
notwithstanding the termination of this Agreement. As used in
this paragraph, the term "Trust" shall include the Trust's
trustees, officers and employees.
18
10.3 Security. If the Custodian advances cash or Securities to the
Fund for any purpose, either at the Trust's request or as
otherwise contemplated in this Agreement, or in the event that
the Custodian or its nominee incurs, in connection with its
performance under this Agreement, any claim, demand, loss,
expense or liability (including reasonable attorneys' fees)
(except such as may arise from its or its nominee's bad faith,
negligence or willful misconduct), then, in any such event,
any property at any time held for the account of the Fund
shall be security therefor, and should the Fund fail promptly
to repay or indemnify the Custodian, the Custodian shall be
entitled to utilize available cash of such Fund and to dispose
of other assets of such Fund to the extent necessary to obtain
reimbursement or indemnification.
10.4 Miscellaneous.
(a) Neither party to this Agreement shall be liable to the
other party for consequential, special or punitive
damages under any provision of this Agreement.
(b) The indemnity provisions of this Article shall
indefinitely survive the termination and/or assignment
of this Agreement.
(c) In order that the indemnification provisions contained
in this Article shall apply, it is understood that if in
any case the indemnitor may be asked to indemnify or
hold the indemnitee harmless, the indemnitor shall be
fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable
care to notify the indemnitor promptly concerning any
situation that presents or appears likely to present the
probability of a claim for indemnification. The
indemnitor shall have the option to defend the
indemnitee against any claim that may be the subject of
this indemnification. In the event that the indemnitor
so elects, it will so notify the indemnitee and
thereupon the indemnitor shall take over complete
defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses
for which it shall seek indemnification under this
section. The indemnitee shall in no case confess any
claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee
except with the indemnitor's prior written consent.
ARTICLE XI
FORCE MAJEURE
Neither the Custodian nor the Trust 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; acts of terrorism; 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,
19
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 in the event of a failure or delay, the Custodian (i) shall not
discriminate against the Fund in favor of any other customer of the Custodian in
making computer time and personnel available to input or process the
transactions contemplated by this Agreement, and (ii) shall use its best efforts
to ameliorate the effects of any such failure or delay. The Custodian will be
liable for any failure or delay in performance of its obligations under this
Agreement or any loss whatsoever arising out of the Custodian's failure to (i)
adopt a Disaster Recovery Plan (as defined in Article VIII above); or (ii)
reasonably implement and adhere to such Disaster Recovery Plan.
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers,
and employees to treat confidentially and as proprietary information of the
Trust, all records and other information relative to the Trust and prior,
present, or potential shareholders of the Trust (and clients of said
shareholders), and not to use such records and information for any purpose other
than the performance of its responsibilities and duties hereunder, except (i)
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Custodian
may be exposed to civil or criminal contempt proceedings for failure to comply,
(ii) when requested to divulge such information by duly constituted authorities,
or (iii) when so requested by the Trust. Records and other information which
have become known to the public through no wrongful act of the Custodian or any
of its employees, agents or representatives, and information that was already in
the possession of the Custodian prior to receipt thereof from the Trust or its
agent, shall not be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by
the Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified
from time to time. In this regard, the Custodian shall have in place and
maintain physical, electronic and procedural safeguards reasonably designed to
protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the Trust
and its shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 Effective Period. This Agreement shall become effective as of
the date first written above and will continue in full force
and effect until terminated as hereinafter provided.
13.2 Termination. This Agreement may be terminated by either party
upon giving 90 days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties.
Notwithstanding the foregoing, this Agreement may be
terminated by any party upon the breach of the other party of
any material term of this Agreement if such breach is not
cured within 15 days of notice of such breach to the breaching
party. In addition, the Trust may, at any time,
20
immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by
regulatory authorities or upon the happening of a like event
at the direction of an appropriate regulatory agency or court
of competent jurisdiction.
13.3 Appointment of Successor Custodian. If a successor custodian
shall have been appointed by the Board of Trustees, the
Custodian shall, upon receipt of a notice of acceptance by the
successor custodian, on such specified date of termination (i)
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 Fund and
held by the Custodian as custodian, and (ii) transfer any
Securities held in a Book-Entry System or Securities
Depository to an account of or for the benefit of the Fund at
the successor custodian, provided that the Trust shall have
paid to the Custodian all fees, expenses and other amounts to
the payment or reimbursement of which it shall then be
entitled. In addition, the Custodian shall, at the expense of
the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or
maintained by the Custodian under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from
the form in which the Custodian has maintained the same, the
Trust shall pay any expenses associated with transferring the
data to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for
assistance from the Custodian's personnel in the establishment
of books, records, and other data by such successor. Upon such
delivery and transfer, the Custodian shall be relieved of all
obligations under this Agreement.
13.4 Failure to Appoint Successor Custodian. If a successor
custodian is not designated by the Trust on or before the date
of termination of this Agreement, then the Custodian shall
have the right to deliver to a bank or trust company of its
own selection, which bank or trust company (i) is a "bank" as
defined in the 1940 Act, and (ii) has aggregate capital,
surplus and undivided profits as shown on its most recent
published report of not less than $25 million, all Securities,
cash and other property held by Custodian under this Agreement
and to transfer to an account of or for the Fund at such bank
or trust company all Securities of the Fund 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. In
addition, under these circumstances, all books, records and
other data of the Trust shall be returned to the Trust.
ARTICLE XIV
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust, as from time to time amended. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has been
signed and
21
delivered by an authorized officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the above-mentioned Agreement and
Declaration of Trust.
ARTICLE XV
MISCELLANEOUS
15.1 Compliance with Laws. The Trust has and retains primary
responsibility for all compliance matters relating to the
Fund, including but not limited to compliance with the 1940
Act, the Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act
of 2002, the USA Patriot Act of 2002 and the policies and
limitations of the Fund relating to its portfolio investments
as set forth in its Prospectus and statement of additional
information. The Custodian's services hereunder shall not
relieve the Trust of its responsibilities for assuring such
compliance or the Board of Trustee's oversight responsibility
with respect thereto.
15.2 Amendment. This Agreement may not be amended or modified in
any manner except by written agreement executed by the
Custodian and the Trust.
15.3 Assignment. This Agreement shall extend to and be binding upon
the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Trust without the written consent of the
Custodian, or by the Custodian without the written consent of
the Trust.
15.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio,
without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Ohio, or any of the
provisions herein, conflict with the applicable provisions of
the 1940 Act, the latter shall control, and nothing herein
shall be construed in a manner inconsistent with the 1940 Act
or any rule or order of the SEC thereunder.
15.5 No Agency Relationship. Nothing herein contained shall be
deemed to authorize or empower either party to act as agent
for the other party to this Agreement, or to conduct business
in the name, or for the account, of the other party to this
Agreement.
15.6 Services Not Exclusive. Nothing in this Agreement shall limit
or restrict the Custodian from providing services to other
parties that are similar or identical to some or all of the
services provided hereunder.
15.7 Invalidity. Any provision of this Agreement which may be
determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
22
render unenforceable such provision in any other jurisdiction.
In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent
of the parties.
15.8 Notices. Any notice required or permitted to be given by
either party to the other shall be in writing and shall be
deemed to have been given on the date delivered personally or
by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile
transmission to the other party's address set forth below:
Notice to the Custodian shall be sent to:
U.S Bank, N.A.
0000 X. Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
and notice to the Trust shall be sent to:
PFFM Investment Trust
c/o Ultimus Fund Solutions, LLC
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
15.9 Multiple Originals. This Agreement may be executed on two or
more counterparts, each of which when so executed shall be
deemed an original, but such counterparts shall together
constitute but one and the same instrument.
15.10 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.
15.11 References to Custodian. The Trust 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 for the Fund and such other printed
matter as merely identifies Custodian as custodian for the
Fund. The Trust 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.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
PMFM INVESTMENT TRUST U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
--------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx X. XxXxx
------------------------------- -------------------------------
Title: President Title: Vice President
------------------------------ ------------------------------
24
A-1
EXHIBIT A
AUTHORIZED PERSONS - PMFM INVESTMENT TRUST
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
AUTHORIZED PERSONS SPECIMEN SIGNATURES
President: Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Vice President: Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------------
Treasurer: Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Secretary: Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
------------------------------------
Assistant Vice President: Xxxxx X. Xxxx /s/ Xxxxx X. Xxxx
------------------------------------
Assistant Treasurer: Xxxx X. Xxxxx /s/ Xxxx X. Xxxxx
------------------------------------
Assistant Treasurer: Xxxxxxx X. Bridge /s/ Xxxxxxx X. Bridge
------------------------------------
Assistant Secretary: Xxxx X. Xxxxx /s/ Xxxx X. Xxxxx
------------------------------------
OTHER:
Xxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxxxx
------------------------------------
Xxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Will XxXxxxx /s/ Will XxXxxxx
------------------------------------
A-1
AUTHORIZED PERSONS SPECIMEN SIGNATURES
Xxxx XxXxxxx /s/ Xxxx XxXxxxx
------------------------------------
Xxxx X. Bridge /s/ Xxxx X. Bridge
------------------------------------
Xxxx Xxxxxxx /s/ Xxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxx /s/ Xxxxx Xxxxx
------------------------------------
Xxxxxx Xxxx /s/ Xxxxxx Xxxx
------------------------------------
Xxxxx Xxxxxxxxxxx /s/ Xxxxx Xxxxxxxxxxx
------------------------------------
Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
------------------------------------
Xxx Xxxxx /s/ Xxx Xxxxx
------------------------------------
2
EXHIBIT B
U.S. BANK INSTITUTIONAL CUSTODY SERVICES
STANDARDS OF SERVICE GUIDE
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of
New York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received
three (3) business days prior to any payment or settlement in order for the
USBank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
The information contained in this Standards of
Service Guide is subject to change. Should any
changes be made USBank will provide you with an
updated copy of its Standards of Service Guide.
B-1
U.S. BANK TRADE SETTLEMENT INSTRUCTIONS
TRANSACTION TYPE DELIVERY INSTRUCTIONS
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional #
if applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account # (your U.S. Bank Trust account number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as ABA#: 000000000
collateral for repurchase agreements Routing Symbol: 1040 Special
For Account # (your U. S. Bank Trust account number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in XX Xxx 0000
Xxxxxxxxx, Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e.,
pair off, repo, tri-party
BBI or OBI For further credit to account: (trust
acct. #, contact name & phone number)
B-2
USBANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will
be made on the immediately following business day.
B-3
USBANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO USBANK POSTING
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies,
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be sold.
EXHIBIT C
FUND NAMES
Separate Series of PMFM Investment Trust
Name of Series
--------------
PMFM CORE ADVANTAGE PORTFOLIO TRUST
PMFM MANAGED PORTFOLIO TRUST
PMFM TACTICAL PRESERVATION PORTFOLIO TRUST
C-1
EXHIBIT D
FEE SCHEDULE - PMFM INVESTMENT TRUST
MAY, 2007
--------------------------------------------------------------------------------
DOMESTIC CUSTODY SERVICES
FEE SCHEDULE
--------------------------------------------------------------------------------
ANNUAL FEE BASED UPON MARKET VALUE PER FUND*
..70 basis point on average daily market value
Minimum annual fee per fund - $4,800
Plus portfolio transaction fees
- PORTFOLIO TRANSACTION FEES
$ 4.00 per book entry DTC transaction (self-affirmed)
$ 7.50 per book entry DTC transaction (USB-affirmed)
$ 4.00 per principal paydown
$ 7.00 per US Bank repurchase agreement transaction
$15.00 per option/future contract written, exercised or expired
$10.00 per book entry Federal Reserve transaction
$15.00 per mutual fund trade
$30.00 per physical security transaction
$50.00 per Cedel/Euroclear transaction
$ 5.00 per disbursement
$ 6.50 per Fed Wire
$150.00 per segregated account per year
o A transaction is a purchase/sale of a security, free receipt/free delivery,
maturity, tender or exchange.
o No charge for the initial conversion free receipt.
o Overdrafts - charged to the account at prime interest rate plus 2.
PLUS OUT-OF-POCKET EXPENSES - Including but not limited to expenses incurred in
the safekeeping, delivery and receipt of securities, shipping, transfer fees,
extraordinary expenses based upon complexity, and all other out-of-pocket
expenses.
EARNINGS CREDITS
On a monthly basis, any earnings credits generated from uninvested DDA balances
will be applied against any cash management service fees generated.
Fees are billed monthly.
* Subject to annual CPI increase, Milwaukee MSA.
--------------------------------------------------------------------------------
D-1
EXHIBIT E
SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION
PMFM INVESTMENT TRUST
The Shareholder Communications Act of 1985 requires banks and trust companies to
make an effort to permit direct communication between a company which issues
securities and the shareholder who votes those securities.
Unless you specifically require us to NOT release your name and address to
requesting companies, we are required by law to disclose your name and address.
Your "yes" or "no" to disclosure will apply to all securities U.S. Bank holds
for you now and in the future, unless you change your mind and notify us in
writing.
_X_ YES U.S. Bank is authorized to provide the Trust's name,
address and security position to requesting companies
whose stock is owned by the Trust.
___ NO U.S. Bank is NOT authorized to provide the Trust's name,
address and security position to requesting companies
whose stock is owned by the Trust.
PMFM INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Title: President
-------------------------------------
Date: 5/31/07
--------------------------------------
E-1
AMENDMENT TO THE
CUSTODY AGREEMENT
THIS AMENDMENT dated as of the 26th day of September, 2007, to the Custody
Agreement, dated as of June 1, 2007 (the "Custody Agreement"), is entered by and
between PMFM INVESTMENT TRUST, a Delaware statutory trust, (the "Trust") and
U.S. BANK, N.A., a national banking association (the "Custodian").
RECITALS
WHEREAS, the parties have entered into a Custody Agreement; and
WHEREAS, the parties desire to amend the funds and the fees; and
WHEREAS, Article XV, Section 15.2 of the Custody Agreement allows for its
amendment by a written instrument executed by both parties.
NOW, THEREFORE, the parties agree as follows:
Exhibit C and Exhibit D of the Custody Agreement are hereby superseded and
replaced with Exhibit C and Exhibit D attached hereto.
Except to the extent amended hereby, the Custody Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by a duly authorized officer on one or more counterparts as of the date
and year first written above.
PMFM INVESTMENT TRUST U.S. BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx X. XxXxx
Title: President Title: Vice President
1
EXHIBIT C
---------
TO THE
CUSTODY AGREEMENT
FUND NAMES
Separate Series of PMFM Investment Trust
Name of Series
--------------
PMFM CORE ADVANTAGE PORTFOLIO TRUST
PMFM MANAGED PORTFOLIO TRUST
2
EXHIBIT D
---------
TO THE
CUSTODY AGREEMENT
PMFM INVESTMENT TRUST
--------------------------------------------------------------------------------
DOMESTIC CUSTODY SERVICES
FEE SCHEDULE AT JUNE, 2007
--------------------------------------------------------------------------------
ANNUAL FEE BASED UPON MARKET VALUE PER FUND*
--------------------------------------------
..70 basis point on average daily market value
Minimum annual fee per fund - $4,800
Plus portfolio transaction fees
PORTFOLIO TRANSACTION FEES
$ 4.00 per book entry DTC transaction (self-affirmed)
$ 7.50 per book entry DTC transaction (USB-affirmed)
$ 4.00 per principal paydown
$ 5.50 per US Bank repurchase agreement transaction
$15.00 per option contract written, exercised or expired
$ 8.00 per Futures Contract
$10.00 per book entry Federal Reserve transaction
$30.00 per physical security transaction
$ 6.50 per Fed Wire
A transaction is a purchase/sale of a security, free receipt/free delivery,
maturity, tender or exchange.
o No charge for the initial conversion free receipt.
o Overdrafts - charged to the account at prime interest rate plus 2.
PLUS OUT-OF-POCKET EXPENSES - Including but not limited to expenses incurred in
the safekeeping, delivery and receipt of securities, shipping, transfer fees,
extraordinary expenses based upon complexity, and all other out-of-pocket
expenses.
Fees are billed monthly.
* Subject to annual CPI increase, Milwaukee MSA.
--------------------------------------------------------------------------------
3
