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Exhibit 8
CUSTODY AGREEMENT
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Agreement made as of the 24th day of August, 1987, between The Gradison
Custodian Trust (the "Trust", a business trust organized under the laws of Ohio
and having its office at The 000 Xxxxxxxx, Xxxxxxxxxx, Xxxx 00000 acting for and
on behalf of Gradison Government Income Fund (the "Fund"), which Is operated and
maintained by the Trust for the benefit of the holders of shares of the Fund,
and The First National Bank of Cincinnati (the "Custodian"), a national banking
association having its principal office and place of business at First National
Bank Center, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, which Agreement
provides, for the furnishing of custodian services to the Fund.
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth the
Trust, on behalf of the Fund, and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
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Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the
Chairman, President, Secretary, Treasurer, and the Senior Vice
President, or any other person, whether or not any such person is an
officer or employee of the Trust, duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written
Instructions on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be
received by the Custodian from time to time, subject in each case to
any
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limitations on the authority of such person as set forth in Appendix A
or any such Certificate.
2. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal
agency securities, its successor or successors and its nominee or
nominees, provided the Custodian has received a certified copy of a
resolution of Board of Trustees of the Trust specifically approving
deposits in the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be
given to the Custodian which is signed on behalf of the Fund by an
officer of the Trust and is actually received by the Custodian.
4. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person or clearing agency authorized to act
as a depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, provided that the Custodian has received
a certified copy of a resolution of the Board of Trustees of the Trust
specifically approving such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer
agent active, from time to time, in such capacity pursuant to a written
Agreement with the Fund, changes in which the Trust shall immediately report
to the Custodian in writing.
6. "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and/or
Interest by the government of the United States or agencies or
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instrumentalities thereof, commercial paper, obligations (including
certificates of deposit, bankers' acceptances, repurchase and reverse
repurchase agreements with respect to the same) and bank time deposits
of domestic banks that are members of Federal Deposit Insurance
Corporation, and short--term corporate obligations where the purchase
and sale of such securities normally require settlement in federal
funds or their equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the Chairman, the President,
the Secretary, the Treasurer and Senior Vice President of the Trust as
listed in the Certificate annexed hereto as Appendix B or such other
Certificate as may be received by the Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions actually received
by the Custodian from an Authorized Person (or from a person which the
Custodian reasonably believes in good faith to be an Authorized Person)
and confirmed by Written Instructions from Authorized Persons in such
manner so that such Written Instructions are received by the Custodian
on the next business day.
9. "Prospectus" shall mean the Trust's currently effective prospectus
and Statement of Additional Information, as filed with and declared effective by
the Securities and Exchange Commission.
10. "Security or Securities" shall mean Money Market Securities, common
or preferred stocks, options, bonds, debentures, corporate debt
securities, 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 interest therein, or any property or
assets.
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11. "Written Instructions" shall mean communications actually received
by the Custodian from one Authorized Person or from one person which
the Custodian reasonably believes in good faith to be an Authorized
Person in writing or by telex or any other such system whereby the
receiver of such communications is able to verify by codes or otherwise
with a reasonable degree of certainty the authenticity of the senders
of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
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1. The Trust, acting for and on behalf of the Fund, hereby constitutes
and appoints the Custodian as custodian of all the Securities and monies at any
time owned by the Fund during the period of this Agreement (the "Fund Assets").
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE TRUST
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1. The Trust hereby agrees to furnish to the Custodian the following
documents:
1. A copy of its Agreement and Declaration of Trust (the
"Declaration of Trust") certified by its Secretary.
2. A copy of its By--Laws certified by its Secretary.
3. A copy of the resolution of its Board of Trustees
appointing the Custodian certified by its Secretary.
4. A copy of the most recent Prospectus of the Trust.
5. A Certificate of the President and Secretary setting forth
the names and signatures of the present officers of the Trust.
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ARTICLE IV
CUSTODY OF CASH AND SECURITIES
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1. The Trust will deliver or cause to be delivered to the Custodian all
Fund Assets owned by it, including cash received for the issuance of its shares,
at any time during the period of this Agreement. The Custodian will not be
responsible for such Fund Assets until actually received by it. Upon such
receipt, the Custodian shall hold in safekeeping and physically segregate at all
times from the property of any other persons, firms or corporations all Fund
Assets received by it from or for the account of the Fund. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where such credits
have been previously made and monies are not finally collected within 90 days of
the making of such credits. The Custodian is hereby authorized by the Trust,
acting on behalf of the Fund, to actually deposit any Fund Assets in the
Book-Entry System or in a Depository, provided, however, that the Custodian
shall always be accountable to the Trust for the Fund Assets so deposited. Fund
Assets deposited in the Book-Entry System or the Depository will be represented
in accounts which include only assets held by the Custodian for customers,
including but not limited to accounts in which the Custodian acts in a fiduciary
or representative capacity.
2. The Custodian shall credit to a separate account or accounts in the
name of the Fund all monies received by it for the account of the Fund, and
shall disburse the same only:
(a) In payment for Securities purchased for the Account of the
Fund, as provided in Article V;
(b) In payment of dividends or distributions, as provided in
Article VI hereof;
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(c) In payment of original issue or other taxes, as provided
in Article VII hereof;
(d) In payment for shares of the Fund redeemed by it, as
provided in Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting
forth the name and address of the person to whom the payment is to be made) the
amount of such payment and the purpose for which payment is to be made(the
Custodian not being required to question such direction) or (ii) if reserve
requirements are established for the Fund by law or by valid regulation,
directing the Custodian to deposit a specified amount of collected funds in the
form of U.S. dollars at a specified Federal Reserve Bank and stating the purpose
of such deposit; or
(f) In reimbursement of the expenses and liabilities of the
Custodian, as provided in Article IX hereof.
3. Promptly after the close of business on each day the Custodian shall furnish
the Trust with a detailed statement of monies held for the Fund under this
Agreement and with confirmations and a summary of all transfers to or from the
account of the Fund during said day. Where Securities are transferred to the
account of the Fund without physical delivery, the Custodian shall also identify
as belonging to the Fund a quantity of Securities in a fungible bulk of
Securities registered in the name of the Custodian (or its nominee) or shown on
the Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian shall furnish
the Trust with a detailed statement of the Securities held for the Fund under
this Agreement.
4. All Securities held for the Fund, which are issued or issuable only in bearer
form, except such Securities as are held in the Book-Entry
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System, shall be held by the Custodian in that form; all other Securities held
for the Fund may be registered in the name of the Fund, in the name of any duly
appointed registered nominee of the Custodian as the Custodian may from time to
time determine, or in the name of the Book-Entry System or the Depository or
their successor or successors, or their nominee or nominees. The Trust agrees to
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 its
registered nominee or in the name of the Book-Entry System or the Depository,
any Securities which it may hold for the account of the Fund and which may from
time to time be registered in the name of the Fund. The Custodian shall hold all
such Securities which are not held in the Book-Entry System or the Depository
in a separate account or accounts in the name of the Fund physically segregated
at all times from those of any other fund maintained and operated by the Trust
and from those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate, the Custodian
shall with respect to all Securities held for the Fund in accordance with this
Agreement:
(a) Collect all income due or payable to the Fund with respect
to the Fund Assets;
(b) Present for payment and collect the amount payable upon
all Securities which may mature or be called, redeemed or retired, or otherwise
become payable;
(c) Surrender Securities in temporary form for definitive
Securities;
(d) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws or the laws or
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regulations of any other taxing authority, including any foreign taxing
authority, now or hereafter in effect; and
(e) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of the
Fund all rights and similar securities issued with respect to any Securities
held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian directly or
through the use of the Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be designated
in such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in exchange for
other Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any Securities held for the account of the Fund to
any protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Fund
and take such other steps as shall be stated in said Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund.
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7. The Custodian shall promptly deliver to the Trust all notices, proxy material
and executed but unvoted proxies pertaining to shareholder meetings of
Securities held by the Fund. The Custodian shall not vote or authorize the
voting of any Securities or give any consent, waiver or approval with respect
thereto unless so directed by a Certificate or Written Instruction.
8. The Custodian shall promptly deliver to the Trust all material received by
the Custodian and pertaining to Securities held by the Fund with respect to
tender or exchange offers, calls for redemption or purchase, expiration of
rights, names changes, stock splits and stock dividends, or any other activity
involving ownership rights in such Securities.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
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1. Promptly after each purchase of Securities by the Fund, the Trust
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate or Written Instructions,
and (ii) with respect to each purchase of Money Market Securities, Written
Instructions, a Certificate or Oral Instructions, specifying with respect to
each such purchase: (a) the name of the issuer and the title of the Securities,
(b) the principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase and (f) the name of the person from whom or the
broker through whom the purchase was made. The Custodian shall upon receipt of
Securities purchased by or for the Fund, pay out of the monies held for the
account of the Fund the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount
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payable as set forth in such Certificate, Written Instructions or Oral
Instructions.
2. Promptly after each sale of Securities by the Trust for the account of the
Fund, the Trust shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate or Written
Instructions, and (ii) with respect to each sale of Money Market Securities,
Written Instructions, a Certificate or Oral Instructions, specifying with
respect to each such sale: (a) the name of the issuer and the title of the
Security, (b) the principal amount sold, and accrued interest, if any, (c) the
date of sale, (d) the sale price per unit, (e) the total amount payable to the
Fund upon such sale and (f) the name of the broker through whom or the person to
whom the sale was made. The Custodian shall deliver the Securities upon receipt
of the total amount payable to the Fund upon such sale, provided that the same
conforms to the total amount payable as set forth in such Certificate, Written
Instructions or Oral Instructions. Subject to tie 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.
3. Promptly after the time as of which the Trust, on behalf of the
Fund, either -
(a) writes an option on Securities or writes a covered put
option in respect of a Security, or
(b) notifies the Custodian that its obligations in respect of
any put or call option, as described in the Trust's Prospectus, require that the
Fund deposit Securities or additional Securities with the Custodian, specifying
the type and value of Securities required to be so deposited, or
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(c) notifies the Custodian that its obligations in respect of
any other Security, as described in the Trust's Prospectus, require that the
Fund deposit Securities or additional Securities with the Custodian, specifying
the type and value of Securities required to be so deposited, the Custodian will
cause to be segregated or identified as deposited, pursuant to the Fund's
obligations as set forth in the Prospectus, Securities of such kinds and having
such aggregate values as are required to meet the Fund's obligations in respect
thereof.
The Trust will provide to the Custodian, as of the end of each trading
day, the market value of the Fund's option liability and the market value of its
portfolio of common stocks.
4. On contractual settlement date, the account of the Fund will be
charged for all purchases settling on that day, regardless of whether or not
delivery is made. On contractual settlement date, sale proceeds will likewise be
credited to the account of the Fund irrespective of delivery.
In the case of "sale fails,' the Custodian may request the assistance of the
Fund in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
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1. The Trust shall furnish to the Custodian a copy of the resolution of the
Board of Trustees, certified by the Secretary, either (i) setting forth the date
of the declaration of any dividend or distribution in respect of shares of the
Fund, the date of payment thereof, the record date as of which Fund shareholders
entitled to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date and the total amount to be paid by the
Dividend and Transfer Agent of the Fund on the
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payment date, or (ii) authorizing the declaration of dividends and distributions
in respect of shares of the Fund on a daily basis and authorizing the Custodian
to rely on Written Instructions or a Certificate setting forth the date of the
declaration of any such dividend or distribution, the date of payment thereof,
the record date as of which Fund shareholders entitled to payment shall be
determined, the amount payable per share to Fund shareholders of record as of
that date and the total amount to be paid by the Dividend and Transfer Agent on
the payment date.
2. Upon the payment date specified in such resolution, Written Instructions or
Certificate, a the case may be, the Custodian shall arrange for such payments to
be made by the Dividend and Transfer Agent out of monies held for the account of
the Fund.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
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1. The Custodian shall receive and credit to the account of the Fund
such payments for shares of the Fund issued or sold from time to time as are
received from the distributor for the Funds shares, from the Dividend and
Transfer Agent of the Fund, or from the Trust.
2. Upon receipt of Written Instructions from the Trust, on behalf of
the Fund, the Custodian shall arrange for payment of redemption proceeds to be
made by the Dividend and Transfer Agent out of the monies held for the account
of the Fund in the total amount specified in the Written Instructions.
3. Notwithstanding the above provisions regarding the redemption of any
shares of the Fund, whenever shares of the Fund are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the Fund,
the Custodian, unless otherwise subsequently instructed by Written Instructions
shall, upon receipt of any Written Instructions from the Trust
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setting forth bat the redemption is in good form for redemption in accordance
with the check redemption procedure, honor the check presented as part of such
check redemption privilege out of the money held in the account of the Fund for
such purposes.
ARTICLE VIII
INDEBTEDNESS
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The Trust, on behalf of the Fund, will cause to be delivered to the
Custodian by a bank or broker (including the Custodian, if the borrowing is from
the Custodian), requiring Securities as collateral for such borrowings, a notice
or undertaking in the form currently employed by any such bank or broker setting
forth the amount which such bank or broker will loan to the Fund against
delivery of a stated amount of collateral. The Trust shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the name of the bank or broker, (b) the amount and terms of the borrowing, which
may be set forth by incorporating by reference an attached promissory note, duly
endorsed by the Trust, acting on behalf of the Fund, or other loan agreement, (c
the date and time, if known, on which the loan is to be entered into, (d) the
date on which the loan becomes due and payable, (e) the total amount payable to
the Fund on the borrowing date, (f) the market value of Securities
collateralizing the loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities and (g) a
statement that such loan is in conformance with the Investment Company Act of
1940 and the Trust's then current Prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank or broker
of the total amount of the loan payable provided that the same conforms to the
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total amount payable as set forth in the certificate. The Custodian may, at the
option of the lending bank or broker, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
bank or broker, by virtue of any promissory note or loan agreement. The
Custodian shall deliver in the manner directed by the Trust from time to time
such Securities as additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this paragraph. The Trust
shall cause all Securities released from collateral status to be returned
directly to the Custodian and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the Trust fails
to specify in a Certificate or Written Instructions the name of the issuer, the
title and number of shares or the principal amount of any particular Securities
to be delivered as collateral by the Custodian, the Custodian shall not be under
any obligation to deliver any Securities. The Custodian may require such
reasonable conditions with respect to such collateral and its dealings with
third-party lenders as it may deem appropriate.
ARTICLE IX
CONCERNING THE CUSTODIAN
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1. Except as otherwise provided herein, the Custodian shall not be
liable for any loss or damage, including counsel fees, resulting from its action
or omission to act or otherwise, except for any such loss or damage arising out
of its own negligence or willful misconduct. The Trust, on behalf of the Fund
and only from Fund Assets (or insurance purchased by the Trust with respect to
its liabilities on behalf of the Fund hereunder), shall defend, indemnify and
hold harmless the Custodian and its directors, officers, employees and agents
with respect to any loss, claim, liability or
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cost (including reasonable attorneys' fees) arising or alleged to arise from or
relating to the Trust's duties with respect to the Fund hereunder or any other
action or inaction of the Trust or its Trustees, officers, employees or agents
as to the Fund, except such as may arise from the negligent action, omission or
willful misconduct of the Custodian, its directors, officers, employees or
agents. The Custodian shall defend, indemnify and hold harmless the Trust and
its Trustees, officers, employees or agents with respect to any loss, claim,
liability or cost (including reasonable attorneys' fees) arising or alleged or
arise from or relating to the Custodian's duties with respect to the Fund
hereunder or any other action or inaction of the Custodian or its directors,
officers, employees, agents, nominees or Sub-Custodians as to the Fund, except
such as may arise from the negligent action, omission or willful misconduct of
the Trust, its Trustees, officers, employees or agents. The Custodian may, with
respect to questions of law apply for and obtain the advice and opinion of
counsel to the Trust at the expense of the Fund, or of its own counsel at its
own expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with the advice or opinion of counsel
to the Trust, and shall be similarly protected with respect to anything done or
omitted by it in good faith in conformity with advice or opinion of its counsel,
unless counsel to the Fund shall, within a reasonable time after being notified
of legal advice received by the Custodian, have a differing Interpretation of
such question of law. The Custodian shall be liable to the Trust for any
proximate loss or damage resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence, misfeasance or misconduct on the
part of the Custodian or any of Its employees, agents, nominees or
Sub-Custodians but not for any special, Incidental, consequential, or punitive
damages; provided,
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however, that nothing contained herein shall preclude recovery by the Trust, on
behalf of the Fund, of principal and interest to the date of recovery on
Securities incorrectly omitted from the Fund's account or penalties imposed on
the Trust, in connection with the Fund, for any failures to deliver Securities.
In any case in which one party hereto may be asked to indemnify the other or
hold the other harmless, the party from whom indemnification is sought (the
"Indemnifying Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party's) will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall make over the complete defense of the claim and the
other party shall sustain no further legal or other expenses in such situation
for which indemnification has been sought under this paragraph, except the
expenses of any additional counsel retained by such Indemnified Party. In no
case shall any party claiming the right to indemnification confess any claim or
make any compromise in any case in which the other party has been asked to
indemnify such party (unless such confession or compromise is made with such
other party's prior written consent).
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The obligations of the parties hereto under this paragraph shall survive the
termination of this Agreement.
2. Without limiting the generality of the foregoing, the Custodian,
acting in the capacity of Custodian hereunder, shall be under no obligation to
inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by
or for the account of the Fund, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the
account of the Fund, or the propriety of the amount for which the same are sold;
(c) The legality of the issue or sale of any shares of the
Fund, or the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Fund,
or the propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend
by the Trust in respect of shares of the Fund;
(f) The legality of any borrowing by the Trust, on behalf of
the Fund, using Securities as collateral;
(g) The sufficiency of any deposit made pursuant to a
Certificate described in clause (ii) of paragraph 2(e) of Article IV herein; or
(h) The genuineness of any Certificate, Written Instructions
or other writing herein described.
3. The Custodian shall not be liable for any money or collected funds
in U.S. dollars deposited in a Federal Reserve Bank in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of Article IV herein, nor
be liable for or considered to be the Custodian of any money,
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whether or not represented by any check, draft, or other instrument for the
payment of money, received by it on behalf of the Fund until the Custodian
actually receives and collects such money directly or by the final crediting of
the account representing the Fund's interest at the Book-Entry System or
Depository.
4. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Dividend and
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Fund of any amount paid
by the Custodian to the Dividend and Transfer Agent of the Fund in accordance
with this Agreement.
5. Income due or payable to the Fund with respect to Fund Assets will
be credited to the account of the Fund as follows:
(a) Dividends will be credited on the first business day following
payable date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities issued
or guaranteed as to principal and/or interest by the government of the United
States or agencies or instrumentalities thereof (excluding securities Issued by
the Government National Mortgage Association) will be credited on payable date
irrespective of collection.
(c) Interest on fixed rate corporate debt securities will be credited
on the first business day following payable date irrespective of collection.
(d) Interest on variable and floating rate debt securities and debt
securities issued by the Government National Mortgage Association will be
credited upon the Custodian's receipt of funds.
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(e) Proceeds from options will be credited upon the Custodian's receipt
of funds.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall
not be under any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in default, or
if payment is refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action or, at the Custodian's option, prepayment.
7. The Custodian may appoint one or more financial or banking
institutions, approved by the Board of Trustees of the Trust, as Depository or
Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited
to, banking institutions located in foreign countries, of Securities and monies
at any time owned by the Fund, upon terms and conditions approved in a
Certificate. Current Depository(s) and Sub-Custodian(s) are noted in Appendix
C. The Custodian shall not be relieved of any obligation or liability under this
Agreement in connection with the appointment or activities of such Depositories
or Sub-Custodians.
8. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it for the account of
the Fund are such as properly may be held by the Fund under the provisions of
the Declaration of Trust and the Fund By-Laws.
9. The Custodian shall treat all records and other information relating
to the Trust, the Fund and the Fund Assets as confidential and shall not
disclose any such records or information to any other person unless (a)
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the Trust shall have consented thereto in writing or (b) such disclosure is
compelled by law.
10. The Custodian shall be entitled to receive and the Trust agrees to
pay to the Custodian, for the Fund's account from Fund Assets only, such
compensation as shall be determined pursuant to Appendix D attached hereto, or
as shall be determined pursuant to amendments to such Appendix approved by the
Custodian and the Trust, on behalf of the Fund. The Custodian shall be entitled
to charge against any money held by it for the account of the Fund the amount of
any loss, damage, liability or expense, including counsel fees, for which it
shall be entitled to reimbursement under the provisions of this Agreement as
determined by agreement of the Custodian and the Trust or by the final order of
any court or arbitrator having jurisdiction and as to which all rights of appeal
shall have expired. The expenses which the Custodian may charge against the
account of the Fund include, but are not limited to, the expenses of
Sub-Custodians incurred in settling transactions involving the purchase and sale
of Securities of the Fund.
11. The Custodian shall be entitled to rely upon any Certificate. The
Custodian shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to Article IV or V
hereof. The Trust agrees to forward to the Custodian Written Instructions from
Authorized Persons confirming Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Trust agrees that the fact
that such confirming instructions are not received by the Custodian shall in no
way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the
21
Trust. The Trust agrees that the Custodian shall incur no liability to the Fund
in acting upon Oral Instructions given to the Custodian hereunder concerning
such transactions.
12. The Custodian will (a) set up and maintain proper books of account
and complete records of all transactions in the accounts maintained by the
Custodian hereunder and (b) preserve for the periods prescribed by applicable
Federal statute or regulation all records required to be so preserved. The books
and records of the Custodian shall be open to inspection and audit at reasonable
times and with prior notice by Officers and auditors employed by the Trust
13. The Custodian and its Sub-Custodians shall promptly send to the
Trust, for the account of the Fund, any report received on the systems of
internal accounting control of the Book-Entry System or the Depository and with
such reports on their own systems of internal accounting control as the Trust
may reasonably request from time to time.
14. The Custodian performs only the services of a custodian and shall
have no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund. The Custodian is not a selling
agent for shares of the Fund and performance of its duties as a custodial agent
shall not be deemed to be a recommendation to the Custodian's depositors or
others of shares of the Fund as an investment.
ARTICLE X
TERMINATION
-----------
1. Either of the parties hereto may terminate this Agreement for any
reason by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than ninety (90) days after the date
of giving of such notice. If such notice Is given by the Trust, on
22
behalf of the Fund, it shall be accompanied by a copy of a resolution of the
Board of Trustees of the Trust, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating a successor
custodian or custodians, each of which shall be a bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits. In
the event such notice is given by the Custodian, the Trust shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of its
Board of Trustees, certified by the Secretary, designating a successor custodian
or custodians to act on behalf of the Fund. In the absence of such designation
by the Trust, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $2,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it ha; received a
notice of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and monies then owned by the
Fund and held by it as Custodian. Upon termination of this Agreement, the Trust
shall pay to the Custodian on behalf of the Fund such compensation as may be due
as of the date of such termination. The Trust agrees on behalf of the Fund that
the Custodian shall be reimbursed for its reasonable costs in connection with
the termination of this Agreement.
2. If a successor custodian is not designated by the Trust, on behalf
of the Fund, or by the Custodian in accordance with the preceding paragraph, or
the designated successor cannot or will not serve, the Trust shall upon the
delivery by the Custodian to the Trust of all Securities (other than Securities
held in the Book-Entry System which cannot be delivered to the Trust) and
monies then owned by the Fund, other than monies
23
deposited with a Federal Reserve Bank pursuant to a Certificate described in
clause (ii) of paragraph 2(e) of Article IV, be deemed to be the custodian for
the Fund, and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect to
Securities held in the Book-Entry System which cannot be delivered to the Trust
to hold such Securities hereunder in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
1. Appendix A sets forth the names and the signatures of all present
Authorized Persons. The Trust agrees to furnish to the Custodian, on behalf of
the Fund, a new Appendix A in form similar to the attached Appendix A, if any
present Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the present
Authorized Persons as set forth in the last delivered Appendix A.
2. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer, Trustee,
past, present or future as such, of the Trust or of any predecessor or
successor, either directly or through the Trust or any such predecessor or
successor, whether by virtue of any constitution, statute or rule of law or
equity, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
thereunder are enforceable solely against Fund Assets, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, Trustees of the Trust or of any
24
predecessor or successor, or any of them, as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by
the Trust have been made by the Trustees of the Trust, acting as such Trustees
for and on behalf of the Fund, pursuant to the authority vested in them under
the laws of the State of Ohio, the Declaration of Trust and the By-Laws of the
Trust. This Agreement has been executed by Officers of the Trust as officers,
and not individually, and the obligations contained herein are not binding upon
any of the Trustees, Officers, agents or holders of shares, personally, out bind
only the Trust and then only to the extent of Fund Assets.
4. Such provisions of the Prospectus of the Trust and any other
documents (including advertising material) specifically mentioning the Custodian
shall be reviewed with the Custodian by the Trust.
5. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at First
National Bank Center, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, attention
Corporate Trust Services Department, or at such other place as the Custodian may
from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Trust shall be sufficiently given when
delivered to the Trust or on the second following the time such notice is
deposited in the U.S. mail postage prepaid and addressed to the Trust at its
25
office at The 000 Xxxxxxxx, Xxxxxxxxxx, Xxxx 00000, or at such other place as
the Trust may from time to time designate in writing.
7. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of Trustees
of the Trust.
8. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Trust or by the Custodian, and no
attempted assignment by the Trust or the Custodian shall be effective without
the written consent of the other party hereto.
9. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
10. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
ATTEST:
/s/Xxxxxx X. Xxxxxx By: Xxxxxx X. Xxxxxx
Chairman
Gradison Custodian Trust
ATTEST: The First National Bank of Cincinnati
By:
--------------------------------
26
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
Chairman: Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
President: Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
Treasurer: Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
Secretary: Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
Senior Vice President: Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
Adviser Employees: Xxxxxxx Xxxx /s/ Xxxxxxx Xxxx
00
XXXXXXXX X
Officers
--------
Chairman: Xxxxxx X. Xxxxxx
President: Xxxxx X. Xxxxx
Treasurer: Xxxxxx Xxxxxx
Secretary: Xxxxxx Xxxxxx
Senior Vice President: Xxxx X. Xxxxxx
Adviser Employees: Xxxxxxx Xxxx
28
APPENDIX C
As required by Article IX, Paragraph 7, it is hereby noted that the
following Depository(s) and Sub-Custodian(s) are employed currently by The
First National Bank of Cincinnati for securities processing and control...
The Bank of New York
Wall Street Trust Division
P.0. Box 000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, XX 00000
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Manufacturers Hanover Trust Company
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
...and have been approved by the Board of Trustees of the Trust.
29
APPENDIX D
Fee quotation for Gradison Custodian Trust, Gradison Government Income Fund
Base Fee: $300.00 per month
Annual Charge on Average
Net Asset Value of: $150.00 per $1 million
GNMA Book Entry
---------------
Transaction Fee: $40.00/transaction
Collection Fee: $25.00 income
$25.00 principal
Maintenance Fee: $5.00/issue/month
Income for Book Entry GNMA's will be credited on
Treasuries and GNMA Non-Book Entry
----------------------------------
Transaction Fee: $15.00/transaction
Options:
Transaction Fee: $30.00 to open
$20.00 to close, exercise
or upon expiration
