EXHIBIT J
CUSTODIAL AGREEMENT
Explanatory note: Standard Federal Bank, N.A. acts as Custodian as
successor to Michigan National Bank.
THIS CUSTODIAL AGREEMENT (hereinafter referred to as "Agreement") made
this 15th day of May, 19____, by and between NAIC Growth Fund, Inc. (hereinafter
referred to as "PRINCIPAL") and Michigan National Bank, a national banking
association (hereinafter referred to as "CUSTODIAN").
WITNESSETH
WHEREAS, the PRINCIPAL desires to appoint Michigan National Bank as the
CUSTODIAN with respect to certain property covered hereby; and
WHEREAS, the CUSTODIAN is willing to act in this capacity pursuant to
the terms and conditions stated herein;
NOW, THEREFORE, in consideration of the foregoing recitals, the parties
hereto agree as follows:
1. APPOINTMENT OF THE CUSTODIAN. The PRINCIPAL hereby appoints Michigan
National Bank as the CUSTODIAN with respect to certain property covered hereby,
and the CUSTODIAN accepts such appointment and agrees to act as such pursuant to
the terms and conditions of this Agreement.
2. DELIVERY OF PROPERTY. The PRINCIPAL has delivered to the CUSTODIAN
certain cash, securities, or other items of personal property. The PRINCIPAL may
deposit from time to time hereafter additional cash, securities, or other items
of personal property acceptable to the CUSTODIAN to be held under the terms of
this Agreement. The cash, securities, or other items of personal property at any
time on deposit with the CUSTODIAN under this Agreement shall be known as the
"Property."
3. POWERS AND DUTIES OF THE CUSTODIAN. The CUSTODIAN is hereby granted
and shall have and exercise the following powers and duties with respect to the
Property:
(a) The CUSTODIAN shall hold, deliver, buy, sell, disburse, or
otherwise dispose of, or take other action with respect to, the Property as the
PRINCIPAL, its agent, or any duly appointed investment manager, from time to
time, may instruct. The CUSTODIAN shall, under no circumstances, be responsible
for determining whether any instructions received from the PRINCIPAL'S agent or
from an investment manager are within the agent's authority or are otherwise
appropriate for the PRINCIPAL'S account.
(b) The CUSTODIAN shall hold the Property in its possession
using the same care in its physical custody as is observed with respect to
assets held by the CUSTODIAN in fiduciary capacities.
(c) The CUSTODIAN shall temporarily invest all cash portions
of the Property in money market mutual funds (which funds may be advised by the
CUSTODIAN or its affiliate) and shall redeem or sell such investment to pay for
any purchase, disbursements, or expenses authorized by the PRINCIPAL or
investment manager. The CUSTODIAN or its affiliate, upon instructions of the
PRINCIPAL or investment manager, may undertake to place and execute for the
PRINCIPAL'S account orders for the purchase of securities, provided that such
funds of the PRINCIPAL are either on deposit with the CUSTODIAN or made
available in advance for such purpose, and to place and execute orders for the
sale of securities held in the account provided that such securities are in
deliverable form. The CUSTODIAN is authorized to charge the account with the
cost of all securities purchased or received against payment and to credit the
account of the PRINCIPAL with the proceeds received for securities sold or
delivered against payment, balances to be held in the account. The CUSTODIAN is
not granted and does not claim under this Agreement any security interest in the
Property. Mutual fund shares are not deposits or obligations of, or sponsored,
endorsed, or guaranteed by, Michigan National Corporation or any of its
subsidiaries, including Michigan National Bank. Shares are not insured by the
Federal Deposit Insurance Corporation (FDIC) or any other state or federal
government agency. The purchase of mutual fund shares involves investment risk,
including possible loss of principal.
1
(d) The CUSTODIAN may utilize a general disbursement account
for distribution from the trust, without incurring any liability for payment of
interest thereon, notwithstanding the CUSTODIAN'S receipt of "float" involving
the distribution account.
(e) The acquisition or disposition of securities and other
property shall be made by the CUSTODIAN only upon instructions from the
PRINCIPAL or investment manager. The CUSTODIAN may accept directions,
instructions, and other forms of communication from the PRINCIPAL or investment
manager other than in writing unless previously instructed by the PRINCIPAL or
investment manager in writing not to so proceed.
(f) The CUSTODIAN shall sign all proxies to vote securities
held hereunder and deliver said proxies to the PRINCIPAL, or a duly appointed
investment manager. The CUSTODIAN shall have no authority or responsibility to
vote such proxies.
(g) The CUSTODIAN will try to collect all interest, dividends,
rent, and other payments becoming due on the investments and all principal
items, due on called or matured securities. If the CUSTODIAN receives any checks
that are payable to the PRINCIPAL, the CUSTODIAN may endorse them in the
PRINCIPAL'S name.
(h) As to any Property held pursuant to this Agreement, the
CUSTODIAN may hold and register the same in its own name, or in the name of a
nominee, or by electronic book entry, provided that the records of the CUSTODIAN
shall at all times account for the property belonging to the custodial account
of the PRINCIPAL.
(i) The CUSTODIAN may take such action through exercise, sale
or other disposition of such stock or bond subscription rights, allotments,
fractional shares, or other similar assets requiring prompt attention as are
received by the CUSTODIAN in connection with the Property held hereunder; and
may execute stock, bond, or other powers of assignment in the name of the
PRINCIPAL as the CUSTODIAN in its discretion and without obtaining the prior
authorization or specific approval of the PRINCIPAL, may deem for the best
interests of the PRINCIPAL in connection with any Property held hereunder.
(j) The CUSTODIAN shall be entitled to surrender promptly for
redemption any securities held in the account with respect to which notice of
redemption is published or received; to prepare, sign, and file either in its
name or in the name of the PRINCIPAL any proper certificate or other statement
with respect to the ownership of any said assets which may be required by law
upon receiving payment of any income or principal; to exchange temporary for
definitive securities; to exchange securities in recapitalizations and
reorganizations; and to deliver securities upon sale thereof.
(k) The responsibility of the CUSTODIAN is limited to its
obligations as set forth herein, and the CUSTODIAN shall have no further
obligation under this Agreement except to exercise good faith and ordinary care.
The CUSTODIAN shall make payments and distributions solely upon the written
instructions of the PRINCIPAL or its agents.
4. WITHDRAWAL AND DISTRIBUTION OF PROPERTY. The PRINCIPAL reserves the
absolute right to withdraw such portions of the Property as it may from time to
time elect. The CUSTODIAN shall make payments and distributions solely upon the
written instructions of the PRINCIPAL or its agents.
5. ACCOUNTS. The CUSTODIAN shall keep an account of all receipts and
disbursements and send a report to the PRINCIPAL at least annually. The account
shall be binding upon the PRINCIPAL unless a written objection is sent to the
CUSTODIAN within sixty (60) days after receipt. The furnishing of this report
shall constitute compliance with the transaction confirmation provisions of 12
CFR 12. The PRINCIPAL may receive, upon written request and at no additional
cost, timely confirmation of all transactions.
6. COMPENSATION OF THE CUSTODIAN. The CUSTODIAN shall charge the
account for its fees and its expenses, including any attorney fees incurred as a
result of serving as the CUSTODIAN under this Agreement.
2
Any fees and expenses not paid from the Property shall be paid by the PRINCIPAL.
The CUSTODIAN is not granted and does not claim under this Agreement any
security interest in the Property.
7. INDEMNIFICATION OF THE CUSTODIAN. The PRINCIPAL hereby agrees to
reimburse, indemnify, and hold harmless the CUSTODIAN from any against any and
all liability, loss, claim, damage, or expense, including attorney fees (except
for negligence or willful misconduct on the part of the CUSTODIAN), resulting
from the exercise by the CUSTODIAN of any authority or power granted to it
hereunder, or from claims of third parties, or from any taxes or other
governmental charges and any expenses related thereto, which may be imposed or
assessed with respect to the Property.
8. TERMINATION. This Agreement may be terminated at any time by either
the PRINCIPAL or the CUSTODIAN upon written notice to the other. Upon
termination, the CUSTODIAN shall prepare a final account, deduct its fees and
expenses from the Property held under this Agreement, and deliver the balance of
the Property to the PRINCIPAL.
9. NOTICES. All notices, instructions or other communications shall be
given to the parties hereto at the following addresses:
If to the CUSTODIAN:
If to the PRINCIPAL: NAIC Growth Fund, Inc.
000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
10. MISCELLANEOUS. This Agreement shall not be amended or altered
except by writing, signed by both parties. Where the context requires, the
masculine shall be read in the feminine or neuter and the singular in the
plural. No waiver by the CUSTODIAN of any provision of this Agreement shall
constitute a subsequent waiver of the same or any other provision. This
Agreement shall be binding on the parties hereto, their heirs, legal
representatives, successors, and assigns. This Agreement shall be governed by
the laws of the State of Michigan.
IN WITNESS WHEREOF, the PRINCIPAL and the CUSTODIAN have executed this
Agreement.
WITNESSES: PRINCIPAL:
By /s/ Xxxxxx X. X'Xxxx
------------------------------- --------------------------
Its: Chairman
------------------------------- ------------------------
Michigan National Bank ("CUSTODIAN")
a national banking association
---------------------------------
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Its: Dir. Institutional Trust
--------------------------------- --------------------------
3
