1
Exhibit 8(b)
CUSTODY AGREEMENT
-----------------
Agreement made as of the 29th day of April 1993, between The Gateway
Trust, (the "Trust"), a business trust organized under and pursuant to Chapter
1746 of the Ohio Revised Code and having its office at Building 000, Xxxx 00
XxxxxxXxxxxx, Xxxxxxx, Xxxx 00000 acting for and on behalf of The Gateway Small
Cap Index Fund (the "Fund"), which is operated and maintained by the Trust for
the benefit of the holders of shares of its Gateway Small Cap Index Fund and
Star Bank, N.A. (the "Custodian"), a national banking association having its
principal office and place of business at Star 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
-----------
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, Treasurer, Secretary and Assistant Treasurer and Assistant Secretary
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
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 Corporation
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.
2
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 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, the Assistant Treasurer, and Assistant Secretary of
the Trust listed in the Certificate annexed hereto as Appendix A 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 Fund'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.
11. "Written Instructions" shall mean communication 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 communication is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the senders of such communication.
3
ARTICLE II
APPOINTMENT OF CUSTODIAN
------------------------
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
--------------------------------------
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 set g forth the names and
signatures of the present officers of the Trust.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
------------------------------
1. The Trust will deliver or cause to be delivered to the Custodian all
Fund Assets, 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
Custodians 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
4
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;
(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 paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the fund is open and
valuing its portfolio. 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 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 by the Depository or
a Sub-Custodian in a separate
5
account or accounts in the name of the Fund 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
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.
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.
6
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, name 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
--------------------------------------------
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 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 Corporation 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 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.
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
7
(c) notifies the Custodian that its obligations in respect of any
other Security, as described in the Fund'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 win 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
-------------------------------------
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 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, as the case maybe, 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
-----------------------------------------
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 Fund's shares, from the Dividend and Transfer Agent
of the Fund, or from the Trust.
8
2. Upon receipt of Written Instructions, 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 setting forth that 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
------------
In connection with any borrowings, 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 a 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 Fund'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 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.
9
ARTICLE IX
CONCERNING THE CUSTODIAN
------------------------
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 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 Directors, 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 to 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
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-Custodian but not for any
special, incidental, consequential, or punitive damages; provided, however, that
nothing contained herein shall preclude recovery by the Trust, on behalf of the
Fund, of principal and of 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") 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 take over the complete defense of the claim and the
Indemnifying Party
10
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 the 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).
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 hereof,
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 hereof, nor
be liable for or considered to be the Custodian of any money, 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.
11
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.
(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, 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 B. 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 Articles of Incorporation and the Trust's 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) 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
12
determined pursuant to Appendix C 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 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 in such manner as will meet the obligations of the Fund
under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the
periods prescribed by applicable Federal statute or regulation an 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.
13
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 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 has 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 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 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
14
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 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, but bind
only the Trust and then only to the extent of Fund Assets.
4. Such provisions of the Prospectus of the Fund and any other documents
(including advertising material) specifically mentioning the Custodian (other
than merely by name and address) 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 Star
Bank Center, 000 Xxxxxx Xxxxxx, X. X. 0000, Xxxxxxxxxx, Xxxx 00000, attention
Trust Custody 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 business day following the time such
notice is deposited in the U.S. mail postage prepaid and addressed to the Trust
at its office at Building 000, Xxxx 00 XxxxxxXxxxxx, Xxxxxxx, Xxxx 00000, or at
such other place as the Trust may from time to time designate in writing.
7. This Agreement with the exception of Appendices A & B 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
15
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 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: The Gateway Trust, on behalf of
The Gateway Small Cap Index Fund
/s/ Xxxxx X. XxXxxxxxxx By: /s/ Xxxxxx X. Xxxx
ATTEST: Star Bank, N.A.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
Vice President & Trust Officer
16
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
Chairman: Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxx
President: Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
Secretary/ reasurer: Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
Adviser Employees: *Xxxx Xxxxxxxx /s/ Xxxx Xxxxxxxx
*Authority restricted; does not include: (i) authority to sign checks on Fund
accounts or make other withdrawals or distributions of Fund monies or (ii) such
other authority as may be withheld or limited by a Certificate or Written
Instructions signed by an Officer of the Trust and delivered to the Custodian.
00
XXXXXXXX X
The following Depository(s) and Sub-Custodian (s) are employed currently
by Star Bank, N.A. for securities processing and control...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
18
APPENDIX C
STAR BANK, N.A.
CUSTODY COMPENSATION SCHEDULE FOR
THE GATEWAY TRUST
Star Bank, N.A., as Custodian, will receive annual compensation for services
according to the terms of the following schedule:
1) Monthly Base Fee: $400.00 Per Fund
2) Portfolio Transaction Fees:
a) For each repurchase agreement transaction $ 7.00
b) For each portfolio transaction processed
through DTC or Federal Reserve 10.00
c) For each portfolio transaction processed
through PTC or our New York Custodian 20.00
d) For each foreign security transaction 50.00
e) For each option/future contract written,
exercised or expired 35.00
f) For each disbursement (Fund Expenses) 5.00
A transaction is a purchase/sale of a security, free
receipt/free delivery (excludes initial conversion), maturity,
tender or exchange.
3) Out-of-Pocket Expenses
The Custodian is to be reimbursed for all out-of-pocket expenses
including, but not limited to, postage, insurance, and long
distance telephone charges.
All Compensation is payable monthly.
