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CUSTODIAN SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of January 1, 1998,
between Light Index Fund, Inc., a Maryland corporation (hereinafter called the
"Company"), and Firstar Trust Company, a corporation organized under the laws of
the State of Wisconsin (hereinafter called "Custodian").
WHEREAS, the Company is an open-end management investment company
which is registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Company is authorized to create separate series,
each with its own separate investment portfolio; and
WHEREAS, the Company desires that the securities and cash of the
Light Index Fund (the "Fund") and each additional series of the Company listed
on Exhibit A attached hereto, as may be amended from time to time, shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Company and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the Company by any
two of the President, a Vice President, the Secretary and the Treasurer of the
Company, or any other persons duly authorized to sign by the Board of Directors.
The word "Board" shall mean Board of Directors of the Light Index
Fund, Inc.
2. NAMES, TITLES, AND SIGNATURES OF THE COMPANY'S OFFICERS
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An officer of the Company will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Directors, together with any changes which may occur from time to time.
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3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or
accounts in the name of the Company, subject only to draft or order by Custodian
acting pursuant to the terms of this Agreement. Custodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Company. Custodian shall make payments of cash
to, or for the account of, the Company from such cash only:
(a) for the purchase of securities for the portfolio of the Fund
upon the delivery of such securities to Custodian, registered in the name of the
Company or of the nominee of Custodian referred to in Section 7 or in proper
form for transfer;
(b) for the purchase or redemption of shares of the common stock
of the Fund upon delivery thereof to Custodian, or upon proper instructions from
the Company;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without limitation thereto,
fees for legal, accounting, auditing and custodian services and expenses for
printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held by or to be
delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution
of the Board of Directors of the Company.
Before making any such payment, Custodian shall receive (and may
rely upon) an officers' certificate requesting such payment and stating that it
is for a purpose permitted under the terms of items (a), (b), (c), or (d) of
this Subsection A, and also, in respect of item (e), upon receipt of an
officers' certificate specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom such payment
is to be made, provided, however, that an officers' certificate need not precede
the disbursement of cash for the purpose of purchasing a money market
instrument, or any other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of the Company
issues appropriate oral or facsimile instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two business
days thereafter.
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B. Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by Custodian
for the account of the Company.
C. Custodian shall, upon receipt of proper instructions, make
federal funds available to the Company as of specified times agreed upon from
time to time by the Company and the Custodian in the amount of checks received
in payment for shares of the Fund which are deposited into the Fund's account.
D. If so directed by the Company, Custodian will invest any and
all available cash in overnight cash-equivalent investments as specified by
the investment manager.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall
establish and maintain a segregated account(s) for and on behalf of the Fund,
into which account(s) may be transferred cash and/or securities.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any
securities of the Company held by it pursuant to this Agreement. Custodian
agrees to transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund
upon receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities
alone or other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms
into other securities;
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(f) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock
of the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a),
(b), (d), (e), (f), and (g), securities or cash receivable in exchange therefor
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this
Section 5 and also, in respect of item (i), upon receipt of an officers'
certificate 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, provided, however, that an officers' certificate need
not precede any such transfer, exchange or delivery of a money market
instrument, or any other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of the Company
issues appropriate oral or facsimile instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two business
days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to
the contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Company, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Company, all necessary ownership certificates required by the Internal
Revenue Code of 1986, as amended (the "Code") or the Income Tax Regulations (the
"Regulations") of the United States Treasury Department (the "Treasury
Department") or under the
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laws of any state now or hereafter in effect, inserting the Company's name on
such certificates as the owner of the securities covered thereby, to the extent
it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate,
Custodian shall register all securities, except such as are in bearer form, in
the name of a registered nominee of Custodian as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder or in any
provision of any subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. All securities held by Custodian
hereunder shall be at all times identifiable in its records held in an account
or accounts of Custodian containing only the assets of the Company.
The Company shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of the Company and which may from
time to time be registered in the name of the Company.
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the Company
all notices, proxies and proxy soliciting materials with respect to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Company), but
without indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Company shall pay or reimburse Custodian from time to time
for any transfer taxes payable upon transfers of securities made hereunder, and
for all other necessary and proper disbursements and expenses made or incurred
by Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as may
be required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws of
any state, to exempt from taxation any exempt transfers and/or deliveries of any
such securities.
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10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Company agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including reasonable counsel fees) incurred or assessed against it
or by its nominee in connection with the performance of this Agreement, except
such as may arise from its or its nominee's own bad faith, negligent action,
negligent failure to act or willful misconduct. Custodian is authorized to
charge any account of the Fund for such items. In the event of any advance of
cash for any purpose made by Custodian resulting from orders or instructions of
the Company, or in the event that Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own bad faith, negligent action, negligent failure to act
or willful misconduct, any property at any time held for the account of the
Company shall be security therefor.
Custodian agrees to indemnify and hold harmless the Company from all charges,
expenses, assessments, and claims/liabilities (including reasonable counsel
fees) incurred or assessed against it in connection with the performance of this
Agreement, except such as may arise from the Fund's own bad faith, negligent
action, negligent failure to act, or willful misconduct.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust
company as a subcustodian for all or any part of the Company's assets, so long
as any such bank or trust company is itself qualified under the 1940 Act and the
rules and regulations thereunder and provided further that, if the Custodian
utilizes the services of a subcustodian, the Custodian shall remain fully liable
and responsible for any losses caused to the Company by the subcustodian as
fully as if the Custodian was directly responsible for any such losses under the
terms of this Agreement.
Notwithstanding anything contained herein, if the Company
requires the Custodian to engage specific subcustodians for the safekeeping
and/or clearing of assets, the Company agrees to indemnify and hold harmless
Custodian from all claims, expenses and liabilities incurred or assessed
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against it in connection with the use of such subcustodian in regard to the
Company's assets, except as may arise from Custodian's own bad faith, negligent
action, negligent failure to act or willful misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Company periodically as agreed upon
with a statement summarizing all transactions and entries for the account of
Company. Custodian shall furnish to the Company, at the end of every month, a
list of the portfolio securities for the Fund showing the aggregate cost of each
issue. The books and records of Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at reasonable times by officers
of, and by auditors employed by, the Company.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Company, or by Custodian,
on ninety (90) days notice, given in writing and sent by registered mail to:
Firstar Trust Company
Attn.: Mutual Fund Services
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or to the Company at:
Light Index Investment Company
Attn.: Xxxxx Xxxxxx
704 Court A
Xxxxxx, XX 00000
as the case may be. Upon any termination of this Agreement, pending appointment
of a successor to Custodian or a vote of the shareholders of the Fund to
dissolve or to function without a custodian of its cash, securities and other
property, Custodian shall not deliver cash, securities or other property of the
Fund to the Company, but may deliver them to a bank or trust company of its own
selection that meets the requirements of the 1940 Act as a Custodian for the
Company to be held under terms similar to those of this Agreement, provided,
however, that Custodian shall not be required to make
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any such delivery or payment until full payment shall have been made by the
Company of all liabilities constituting a charge on or against the properties
then held by Custodian or on or against Custodian, and until full payment shall
have been made to Custodian of all its fees, compensation, costs and expenses,
subject to the provisions of Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the
consent of the Company, authorized or approved by a resolution of its Board of
Directors.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use
by Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Directors of the Company approves by resolution
the use of such central securities clearing agency or securities depository.
15. RECORDS
Custodian shall keep records relating to its services to be
performed hereunder, in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Company but not inconsistent with the rules
and regulations of appropriate government authorities, in particular Section 31
of the 1940 Act and the rules thereunder. Custodian agrees that all such records
prepared or maintained by the Custodian relating to the services performed by
Custodian hereunder are the property of the Company and will be preserved,
maintained, and made available in accordance with such section and rules of the
1940 Act and will be promptly surrendered to the Company on and in accordance
with its request.
16. GOVERNING LAW
This Agreement shall be governed by Wisconsin law. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by a duly authorized officer or one or more counterparts as of
the day and year first written above.
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LIGHT INDEX FUND, INC. FIRSTAR TRUST COMPANY
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
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CUSTODY SERVICES
ANNUAL FEE SCHEDULE - DOMESTIC FUNDS
EXHIBIT A
Separate Series of Light Index Fund, Inc.
NAME OF SERIES ADDED AS OF
Light Index Fund January 1, 1998
Annual fee based upon market value
2 basis points per year
Minimum annual fee per fund - $3,000
Investment transactions (purchase, sale, exchange, tender, redemption, maturity,
receipt, delivery):
$10.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$25.00 per mutual fund trade
$75.00 per Euroclear
$ 8.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
$15.00 per variation margin
$15.00 per Fed wire deposit or withdrawal
Variable Amount Demand Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
Plus out-of-pocket expenses, and extraordinary expenses based upon complexity.
Fees and out-of-pocket expenses are billed to the fund monthly, based upon
market value at the beginning of the month.
