CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this 24th day of July, 2007,
by and between XXXXXXX XXXXX INVESTMENT TRUST, a Massachusetts business trust
(the "Trust"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of
America with its principal place of business at Cincinnati, Ohio (the
"Custodian").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
is authorized to issue shares of beneficial interest in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, the Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the 1940 Act; and
WHEREAS, the Trust desires to retain the Custodian to act as custodian of
the cash and securities of each series of the Trust listed on EXHIBIT C hereto
(as amended from time to time) (each a "Fund" and collectively, the "Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings set forth below unless the context otherwise requires:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and
named in EXHIBIT A hereto or in such resolutions of the Board of
Trustees, certified by an Officer, as may be received by the
Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the trustees from time to time
serving under the Trust's declaration of trust, as amended from time
to time.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in
Subpart B of 31 CFR Part 350, or in such book-entry regulations of
federal agencies as are substantially in the form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc., and any other day for which the
Trust computes the net asset value of Shares of the Fund.
1.5 "ELIGIBLE SECURITIES DEPOSITORY" shall mean a system for the central
handling of securities as that term is defined in Rule 17f-4 and
17f-7 under the 1940 Act.
1.6 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name of
the Trust, which is provided for in Section 3.2 below.
1.7 "IRS" shall mean the Internal Revenue Service.
1.8 "NASD" shall mean The National Association of Securities Dealers,
Inc.
1.9 "OFFICER" shall mean the Chairman, President, any Vice President,
the Chief Compliance Officer, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the Trust.
1.10 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i)
reasonably believed by the Custodian to have been given by an
Authorized Person, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business, and (iii) orally
confirmed by the Custodian. The Trust shall cause all Oral
Instructions to be confirmed by Written Instructions prior to the
end of the next Business Day. If such Written Instructions
confirming Oral Instructions are not received by the Custodian prior
to a transaction, it shall in no way affect the validity of the
transaction or the authorization thereof by the Trust. If Oral
Instructions vary from the Written Instructions that purport to
confirm them, the Custodian shall notify the Trust of such variance
but such Oral Instructions will govern unless the Custodian has not
yet acted.
1.11 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions.
1.12 "SEC" shall mean the Securities and Exchange Commission.
1.13 "SECURITIES" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed
securities or other obligations, and any certificates, receipts,
warrants or other instruments or documents representing rights to
receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or any similar
property or assets that the Custodian or its agents have the
facilities to clear and service.
1.14 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company and
any other clearing agency registered with the SEC under Section 17A
of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
which acts as a system for the central handling of Securities where
all Securities of any particular class or series of an issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of the Securities.
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1.15 "SHARES" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Trust on account of the Fund.
1.16 "SUB-CUSTODIAN" shall mean and include (i) any branch of a "U.S.
bank," as that term is defined in Rule 17f-5 under the 1940 Act, and
(ii) any "eligible foreign custodian," as that term is defined in
Rule 17f-5 under the 1940 Act, having a contract with the Custodian
which the Custodian has determined will provide reasonable care of
assets of the Fund based on the standards specified in Section 3.3
below. Such contract shall be in writing and shall include
provisions that provide: (i) for indemnification or insurance
arrangements (or any combination of the foregoing) such that the
Fund will be adequately protected against the risk of loss of assets
held in accordance with such contract; (ii) that the Fund's assets
will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of the Sub-Custodian or its creditors
except a claim of payment for their safe custody or administration,
in the case of cash deposits, liens or rights in favor of creditors
of the Sub-Custodian arising under bankruptcy, insolvency, or
similar laws; (iii) that beneficial ownership for the Fund's assets
will be freely transferable without the payment of money or value
other than for safe custody or administration; (iv) that adequate
records will be maintained identifying the assets as belonging to
the Fund or as being held by a third party for the benefit of the
Fund; (v) that the Trust's independent public accountants will be
given access to those records or confirmation of the contents of
those records; and (vi) that the Fund will receive periodic reports
with respect to the safekeeping of the Fund's assets, including, but
not limited to, notification of any transfer to or from a Fund's
account or a third party account containing assets held for the
benefit of the Fund. Such contract may contain, in lieu of any or
all of the provisions specified in (i)-(vi) above, such other
provisions that the Custodian determines will provide, in their
entirety, the same or a greater level of care and protection for
Trust assets as the specified provisions.
1.17 "WRITTEN INSTRUCTIONS" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized
Person or, (ii) communications by telex or electronic communication
or any other such system from one or more persons reasonably
believed by the Custodian to be Authorized Persons.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby appoints the Custodian as custodian of
all Securities and cash owned by or in the possession of the Fund at
any time during the period of this Agreement, on the terms and
conditions set forth in this Agreement, and the Custodian hereby
accepts such appointment and agrees to perform the services and
duties set forth in this Agreement. The services and duties of the
Custodian shall be confined to those matters expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Custodian hereunder.
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2.2 DOCUMENTS TO BE FURNISHED. The following documents, including any
amendments thereto, will be provided contemporaneously with the
execution of the Agreement to the Custodian by the Trust:
(a) A copy of the Trust's declaration of trust, certified by the
Secretary;
(b) A copy of the Trust's bylaws, certified by the Secretary;
(c) A copy of the resolution of the Board of Trustees of the Trust
appointing the Custodian, certified by the Secretary;
(d) A copy of the current prospectus of the Fund (the
"Prospectus");
(e) A certification of the Chairman or the President and the
Secretary of the Trust setting forth the names and signatures
of the current Officers of the Trust and other Authorized
Persons; and
(f) An executed authorization required by the Shareholder
Communications Act of 1985, attached hereto as EXHIBIT E.
2.3 NOTICE OF APPOINTMENT OF TRANSFER AGENT. The Trust agrees to notify
the Custodian in writing of the appointment, termination or change
in appointment of any transfer agent of the Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of the Fund (other than Securities
maintained in a Securities Depository, Eligible Securities
Depository or Book-Entry System) shall be physically segregated from
other Securities and non-cash property in the possession of the
Custodian (including the Securities and non-cash property of the
other series of the Trust) and shall be identified as subject to
this Agreement.
3.2 FUND CUSTODY ACCOUNTS. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of
the Trust coupled with the name of the Fund, subject only to draft
or order of the Custodian, in which the Custodian shall enter and
carry all Securities, cash and other assets of such Fund which are
delivered to it.
3.3 APPOINTMENT OF AGENTS.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodian to establish and maintain arrangements with (i)
Eligible Securities Depositories or (ii) members of the
Sub-Custodian's network to hold Securities and cash of the
Fund and to carry out such other provisions of this Agreement
as it may determine; provided, however, that the appointment
of any such agents and maintenance of any Securities and cash
of the Fund shall be at the Custodian's expense and shall not
relieve the Custodian of any of its obligations or liabilities
under this Agreement. The Custodian shall be liable for the
actions of any Sub-Custodians (regardless of whether assets
are maintained in the custody of a Sub-Custodian, a member of
its network
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or an Eligible Securities Depository) appointed by it as if
such actions had been done by the Custodian.
(b) The agreement between the Custodian and each Sub-Custodian
acting hereunder shall be in a written contract containing the
required provisions set forth in Rule 17f-5(c)(2) under the
1940 Act.
(c) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Trustees of the
placement of the Securities and cash of the Fund with a
Sub-Custodian and of any material changes in the Fund's
custody arrangements. Such reports shall include an analysis
of the custody risks associated with maintaining assets with
any Eligible Securities Depositories.
(d) The Custodian shall promptly take such steps as may be
required to withdraw assets of the Fund from any Sub-Custodian
arrangement that has ceased to meet the requirements of Rule
17f-5 or Rule 17f-7 under the 1940 Act, as applicable.
(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants to the Trust that it agrees to
exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of property
of the Fund. The Custodian further warrants that the Fund's
assets will be subject to reasonable care if maintained with a
Sub-Custodian, after considering all factors relevant to the
safekeeping of such assets, including, without limitation: (i)
the Sub-Custodian's practices, procedures, and internal
controls for certificated securities (if applicable), its
method of keeping custodial records, and its security and data
protection practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care for
Fund assets; (iii) the Sub-Custodian's general reputation and
standing and, in the case of a Securities Depository, the
Securities Depository's operating history and number of
participants; and (iv) whether the Fund will have jurisdiction
over and be able to enforce judgments against the
Sub-Custodian, such as by virtue of the existence of any
offices of the Sub-Custodian in the United States or the
Sub-Custodian's consent to service of process in the United
States.
(f) The Custodian shall establish a system and ensure that each
Sub-Custodian engaged from time to time to hold assets of the
Fund has established a system to monitor (i) the
appropriateness of maintaining the Fund's assets with a
Sub-Custodian or members of a Sub-Custodian's network; (ii)
the performance of the contract governing the Fund's and the
Custodian's arrangements with such Sub-Custodian or members of
a Sub-Custodian's network; and (iii) the custody risks of
maintaining assets with an Eligible Securities Depository.
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(g) The Custodian shall use reasonable commercial efforts to
collect all income and other payments with respect to foreign
Securities to which the Fund shall be entitled and shall
credit such income, as collected, to the Trust. In the event
that extraordinary measures are required to collect such
income, the Trust and Custodian shall consult as to the
measurers and as to the compensation and expenses of the
Custodian relating to such measures.
3.4 DELIVERY OF ASSETS TO CUSTODIAN. The Trust shall deliver, or cause
to be delivered, to the Custodian all of the Fund's Securities, cash
and other investment assets, including (i) all payments of income,
payments of principal and capital distributions received by the Fund
with respect to such Securities, cash or other assets owned by the
Fund at any time during the period of this Agreement, and (ii) all
cash received by the Fund for the issuance of Shares. The Custodian
shall not be responsible for such Securities, cash or other assets
until actually received by it.
3.5 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The Custodian may
deposit and/or maintain Securities of the Fund in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall make use of such
Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or
Securities Depository which includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for
customers.
(c) The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account
of the Fund. If Securities sold by the Fund are held in a
Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that payment
for such Securities has been transferred to the Depository
Account, and (ii) the making of an entry
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on the records of the Custodian to reflect such transfer and
payment for the account of the Fund.
(e) The Custodian shall provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry System or
Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be liable to the Trust for any loss or
damage to the Fund resulting from (i) the use of a Book-Entry
System or Securities Depository by reason of any negligence or
willful misconduct on the part of the Custodian or any
Sub-Custodian, or (ii) failure of the Custodian or any
Sub-Custodian to enforce effectively such rights as it may
have against a Book-Entry System or Securities Depository. At
its election, the Trust shall be subrogated to the rights of
the Custodian with respect to any claim against a Book-Entry
System or Securities Depository or any other person from any
loss or damage to the Fund arising from the use of such
Book-Entry System or Securities Depository, if and to the
extent that the Fund has not been made whole for any such loss
or damage.
(g) With respect to its responsibilities under this Section 3.5
and pursuant to Rule 17f-4 under the 1940 Act, the Custodian
hereby warrants to the Trust that it agrees to (i) exercise
due care in accordance with reasonable commercial standards in
discharging its duty as a securities intermediary to obtain
and thereafter maintain such assets, (ii) provide, promptly
upon request by the Trust, such reports as are available
concerning the Custodian's internal accounting controls and
financial strength, and (iii) require any Sub-Custodian to
exercise due care in accordance with reasonable commercial
standards in discharging its duty as a securities intermediary
to obtain and thereafter maintain assets corresponding to the
security entitlements of its entitlement holders.
3.6 DISBURSEMENT OF MONEYS FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the
Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities,
futures contracts and options on futures contracts), against
the delivery to the Custodian (or any Sub-Custodian) of such
Securities registered as provided in Section 3.9 below or in
proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set
forth in Section 3.5 above; (ii) in the case of options on
Securities, against delivery to the Custodian (or any
Sub-Custodian) of such receipts as are
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required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on
futures contracts, against delivery to the Custodian (or any
Sub-Custodian) of evidence of title thereto in favor of the
Fund or any nominee referred to in Section 3.9 below; and (iv)
in the case of repurchase or reverse repurchase agreements
entered into between the Trust and a bank which is a member of
the Federal Reserve System or between the Trust and a primary
dealer in U.S. Government securities, against delivery of the
purchased Securities either in certificate form or through an
entry crediting the Custodian's account at a Book-Entry System
or Securities Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of Securities owned by the
Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) For the payment of any expense or liability incurred by the
Fund, including, but not limited to, the following payments
for the account of the Fund: interest; taxes; administration,
investment advisory, accounting, auditing, transfer agent,
custodian, director and legal fees; and other operating
expenses of the Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated
as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Fund;
(g) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term
of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of
the Board of Trustees, certified by an Officer, specifying the
amount and purpose of such payment, declaring
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such purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is to be made.
3.7 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall release and deliver, or
cause the Sub-Custodian to release and deliver, Securities from the
Fund Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of the Fund but
only against receipt of payment therefor in cash, by certified
or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian, or any
nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other
evidence representing the same aggregate face amount or number
of units; provided that, in any such case, the new Securities
are to be delivered to the Custodian;
(e) To the broker selling the Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or
pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of the
Fund, but only against receipt of such collateral as the Trust
shall have specified to the Custodian in Proper Instructions;
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(j) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Trust, but only
against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution
of the Board of Trustees, certified by an Officer, specifying
the Securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom delivery of such Securities shall be made.
3.8 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all
Securities held for the Fund:
(a) Subject to Section 9.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled either
by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 9.4 below, collect
on a timely basis the amount payable upon all Securities which
may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or
the laws or regulations of any other taxing authority now or
hereafter in effect, and prepare and
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submit, as directed by the Trust, reports to the IRS and the
Trust at such time, in such manner and containing such
information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar Securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other assets
of the Fund.
3.9 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held for the
Fund that are issued or issuable only in bearer form shall be held
by the Custodian in that form, provided that any such Securities
shall be held in a Book-Entry System if eligible therefor. All other
Securities held for the Fund may be registered in the name of the
Fund, the Custodian, a Sub-Custodian or any nominee thereof, or in
the name of a Book-Entry System, Securities Depository or any
nominee of either thereof. The records of the Custodian with respect
to foreign securities of the Fund that are maintained with a
Sub-Custodian in an account that is identified as belonging to the
Custodian for the benefit of its customers shall identify those
securities as belonging to the Fund. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of
any of the nominees referred to above or in the name of a Book-Entry
System or Securities Depository, any Securities registered in the
name of the Fund.
3.10 RECORDS.
(a) The Custodian shall maintain complete and accurate records
with respect to Securities, cash or other property held for
the Fund, including (i) journals or other records of original
entry containing an itemized daily record in detail of all
receipts and deliveries of Securities and all receipts and
disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in
physical possession, (C) monies and Securities borrowed and
monies and Securities loaned (together with a record of the
collateral therefor and substitutions of such collateral), (D)
dividends and interest received, and (E) dividends receivable
and interest receivable; and (iii) canceled checks and bank
records related thereto. The Custodian shall keep such other
books and records of the Fund as the Trust shall reasonably
request, or as may be required by the 1940 Act, including, but
not limited to, Section 31 of the 1940 Act and Rule 31a-2
promulgated thereunder.
(b) All such books and records maintained by the Custodian shall
(i) be maintained in a form acceptable to the Trust and in
compliance with the rules and regulations of the SEC, (ii) be
the property of the Trust and at all
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times during the regular business hours of the Custodian be
made available upon request for inspection by duly authorized
officers, employees or agents of the Trust and employees or
agents of the SEC, and (iii) if required to be maintained by
Rule 31a-1 under the 1940 Act, be preserved for the periods
prescribed in Rules 31a-1 and 31a-2 under the 1940 Act.
3.11 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish the Trust
with a daily activity statement and a summary of all transfers to or
from each Fund Custody Account on the day following such transfers.
At least monthly, the Custodian shall furnish the Trust with a
detailed statement of the Securities and moneys held by the
Custodian and the Sub-Custodians for the Fund under this Agreement.
3.12 OTHER REPORTS BY CUSTODIAN. As the Trust may reasonably request from
time to time, the Custodian shall provide the Trust with reports on
the internal accounting controls and procedures for safeguarding
Securities which are employed by the Custodian or any Sub-Custodian.
3.13 PROXIES AND OTHER MATERIALS. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the
Fund to be promptly executed by the registered holder of such
Securities, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Trust such
proxies, all proxy soliciting materials and all notices relating to
such Securities. With respect to the foreign Securities, the
Custodian will use reasonable commercial efforts to facilitate the
exercise of voting and other shareholder rights, subject to the
laws, regulations and practical constraints that may exist in the
country where such securities are issued. The Trust acknowledges
that local conditions, including lack of regulation, onerous
procedural obligations, lack of notice and other factors may have
the effect of severely limiting the ability of the Trust to exercise
shareholder rights.
3.14 INFORMATION ON CORPORATE ACTIONS. The Custodian shall promptly
deliver to the Trust all information received by the Custodian and
pertaining to Securities being held by the Fund with respect to
optional tender or exchange offers, calls for redemption or
purchase, or expiration of rights as described in the Standards of
Service Guide attached as EXHIBIT B. If the Trust desires to take
action with respect to any tender offer, exchange offer or other
similar transaction, the Trust shall notify the Custodian at least
five Business Days prior to the date on which the Custodian is to
take such action. The Trust will provide or cause to be provided to
the Custodian all relevant information for any Security which has
unique put/option provisions at least five Business Days prior to
the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of Securities
for the Fund, Written Instructions shall be delivered to the
Custodian, specifying (i) the name of
12
the issuer or writer of such Securities, and the title or other
description thereof, (ii) the number of shares, principal amount
(and accrued interest, if any) or other units purchased, (iii) the
date of purchase and settlement, (iv) the purchase price per unit,
(v) the total amount payable upon such purchase, and (vi) the name
of the person to whom such amount is payable. The Custodian shall
upon receipt of such Securities purchased by the Fund pay out of the
moneys held for the account of the Fund the total amount specified
in such Written Instructions to the person named therein. The
Custodian shall not be under any obligation to pay out moneys to
cover the cost of a purchase of Securities for the Fund, if in the
Fund Custody Account there is insufficient cash available to the
Fund for which such purchase was made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
In any and every case where payment for the purchase of Securities
for the Fund is made by the Custodian in advance of receipt of the
Securities purchased and in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to
the Fund for such payment.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by the
Fund, Written Instructions shall be delivered to the Custodian,
specifying (i) the name of the issuer or writer of such Securities,
and the title or other description thereof, (ii) the number of
shares, principal amount (and accrued interest, if any), or other
units sold, (iii) the date of sale and settlement, (iv) the sale
price per unit, (v) the total amount payable upon such sale, and
(vi) the person to whom such Securities are to be delivered. Upon
receipt of the total amount payable to the Fund as specified in such
Written Instructions, the Custodian shall deliver such Securities to
the person specified in such Written Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in
Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3 above or
any other provision of this Agreement, the Custodian, when
instructed to deliver Securities against payment, shall be entitled,
if in accordance with generally accepted market practice, to deliver
such Securities prior to actual receipt of final payment therefor.
In any such case, the Fund shall bear the risk that final payment
for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person
to whom they were delivered, and the Custodian shall have no
liability for any for the foregoing.
4.5 PAYMENT FOR SECURITIES SOLD. In its sole discretion and from time to
time, the Custodian may credit the Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against
payment, (ii) proceeds from the redemption of Securities or other
assets of the Fund, and (iii) income from cash, Securities or other
assets of the Fund. Any such credit shall be conditional upon actual
receipt by Custodian of final payment and may be reversed if final
payment is not
13
actually received in full. The Custodian may, in its sole discretion
and from time to time, permit the Fund to use funds so credited to
the Fund Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the
Fund Custody Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to
facilitate the settlement of a Fund's transactions in the Fund
Custody Account. Any such advance shall be repayable immediately
upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 TRANSFER OF FUNDS. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt of
Proper Instructions specifying that the funds are required to redeem
Shares of the Fund, the Custodian shall wire each amount specified
in such Proper Instructions to or through such bank or broker-dealer
as the Trust may designate.
5.2 NO DUTY REGARDING PAYING BANKS. Once the Custodian has wired amounts
to a bank or broker-dealer pursuant to Section 5.1 above, the
Custodian shall not be under any obligation to effect any further
payment or distribution by such bank or broker-dealer.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account:
(a) in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the 1934 Act and
a member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the
rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund, or financial
futures contracts (or options thereon) purchased or sold by the
Fund, or short sales by the Fund;
(c) which constitute collateral for loans of Securities made by the
Fund;
14
(d) for purposes of compliance by the Fund with requirements under the
1940 Act for the maintenance of segregated accounts by registered
investment companies in connection with short sales, reverse
repurchase agreements and when-issued, delayed delivery and firm
commitment transactions; and
(e) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Trustees, certified by an Officer, setting forth the
purpose or purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
COMPENSATION OF CUSTODIAN
7.1 COMPENSATION. The Custodian shall be compensated for providing the
services set forth in this Agreement in accordance with the fee
schedule set forth on EXHIBIT D hereto (as amended from time to
time). The Custodian shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably
incurred by the Custodian in performing its duties hereunder. The
Trust shall pay all such fees and reimbursable expenses within 30
calendar days following receipt of the billing notice, except for
any fee or expense subject to a good faith dispute. The Trust shall
notify the Custodian in writing within 30 calendar days following
receipt of each invoice if the Trust is disputing any amounts in
good faith. The Trust shall pay such disputed amounts within 10
calendar days of the day on which the parties agree to the amount to
be paid. With the exception of any fee or expense the Trust is
disputing in good faith as set forth above, unpaid invoices shall
accrue a finance charge of 1 1/2% per month after the due date.
Notwithstanding anything to the contrary, amounts owed by the Trust
to the Custodian shall only be paid out of the assets and property
of the particular Fund involved.
7.2 OVERDRAFTS. The Trust is responsible for maintaining an appropriate
level of short term cash investments to accommodate cash outflows.
The Trust may obtain a formal line of credit for potential
overdrafts of its custody account. In the event of an overdraft or
in the event the line of credit is insufficient to cover an
overdraft, the overdraft amount or the overdraft amount that exceeds
the line of credit will be charged in accordance with the fee
schedule set forth on EXHIBIT D hereto (as amended from time to
time).
15
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust hereby
represents and warrants to the Custodian, which representations and
warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Trust in accordance with all requisite action
and constitutes a valid and legally binding obligation of the
Trust, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies
of creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
8.2 REPRESENTATIONS AND WARRANTIES OF THE CUSTODIAN. The Custodian
hereby represents and warrants to the Trust, which representations
and warranties shall be deemed to be continuing throughout the term
of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Custodian in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Custodian, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties;
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its
16
property which would prohibit its execution or performance of
this Agreement; and
(d) It will maintain a disaster recovery plan and procedures
including provisions for emergency use of electronic data
processing equipment, which is reasonable in light of the
services to be provided ("Disaster Recovery Plan"), and it
will, at no additional expense to the Trust, take reasonable
steps to minimize service interruptions in the event of a
disaster.
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 STANDARD OF CARE. The Custodian shall exercise reasonable care in
the performance of its duties under this Agreement. The Custodian
shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with its duties
under this Agreement, except a loss arising out of or relating to
the Custodian's (or a Sub-Custodian's) refusal or failure to comply
with the terms of this Agreement (or any sub-custody agreement) or
from its (or a Sub-Custodian's) bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement (or
any sub-custody agreement). The Custodian shall be entitled to rely
on and may act upon advice of Counsel to the Trust on all matters,
and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. The Custodian shall promptly notify
the Trust of any action taken or omitted by the Custodian pursuant
to advice of Counsel to the Trust.
9.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable for,
or considered to be the custodian of, any cash belonging to the Fund
or any money represented by a check, draft or other instrument for
the payment of money, until the Custodian or its agents actually
receive such cash or collect on such instrument.
9.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent that
it is in the exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any property
or evidence of title thereto received or delivered by it pursuant to
this Agreement.
9.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or
property due and payable with respect to Securities held for the
Fund if such Securities are in default or payment is not made after
due demand or presentation.
9.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in
writing received by it and reasonably believed by it to be genuine.
The Custodian shall be entitled to rely upon any Oral Instructions
and any Written Instructions actually received by it pursuant to
this Agreement.
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9.6 COOPERATION. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust to keep
the books of account of the Fund and/or compute the value of the
assets of the Fund. The Custodian shall take all such reasonable
actions as the Trust may from time to time request to enable the
Trust to obtain, from year to year, favorable opinions from the
Trust's independent accountants with respect to the Custodian's
activities hereunder in connection with (i) the preparation of the
Trust's reports on Form N-1A, Form N-CSR and Form N-SAR and any
other reports required by the SEC, and (ii) the fulfillment by the
Trust of any other requirements of the SEC.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold
harmless the Custodian, any Sub-Custodian and any nominee thereof
(each, an "Indemnified Party" and collectively, the "Indemnified
Parties") from and against any and all claims, demands, losses,
expenses and liabilities of any and every nature (including
reasonable attorneys' fees) that an Indemnified Party may sustain or
incur or that may be asserted against an Indemnified Party by any
person arising directly or indirectly (i) from the fact that
Securities are registered in the name of any such nominee, (ii) from
any action taken or omitted to be taken by the Custodian or such
Sub-Custodian (a) at the request or direction of or in reliance on
the advice of the Trust, or (b) upon Proper Instructions, or (iii)
from the performance of its obligations under this Agreement or any
sub-custody agreement, provided that neither the Custodian nor any
such Sub-Custodian shall be indemnified and held harmless from and
against any such claim, demand, loss, expense or liability arising
out of or relating to its refusal or failure to comply with the
terms of this Agreement (or any sub-custody agreement), or from its
bad faith, negligence or willful misconduct in the performance of
its duties under this Agreement (or any sub-custody agreement). This
indemnity shall be a continuing obligation of the Trust, its
successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the terms "Custodian" and
"Sub-Custodian" shall include their respective directors, officers
and employees.
10.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall indemnify and hold
harmless the Trust from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) that the Trust may sustain or incur or
that may be asserted against the Trust by any person arising out of
any action taken or omitted to be taken by an Indemnified Party as a
result of the Indemnified Party's refusal or failure to comply with
the terms of this Agreement (or any sub-custody agreement), or from
its bad faith, negligence or willful misconduct in the performance
of its duties under this Agreement (or any sub-custody agreement).
This indemnity shall be a continuing obligation of the Custodian,
its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "Trust" shall include
the Trust's trustees, officers and employees.
18
10.3 SECURITY. If the Custodian advances cash or Securities to the Fund
for any purpose, either at the Trust's request or as otherwise
contemplated in this Agreement, or in the event that the Custodian
or its nominee incurs, in connection with its performance under this
Agreement, any claim, demand, loss, expense or liability (including
reasonable attorneys' fees) (except such as may arise from its or
its nominee's bad faith, negligence or willful misconduct), then, in
any such event, any property at any time held for the account of the
Fund shall be security therefor, and should the Fund fail promptly
to repay or indemnify the Custodian, the Custodian shall be entitled
to utilize available cash of such Fund and to dispose of other
assets of such Fund to the extent necessary to obtain reimbursement
or indemnification.
10.4 MISCELLANEOUS.
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under any
provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
(c) In order that the indemnification provisions contained in this
Article shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised
of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning
any situation that presents or appears likely to present the
probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any
claim that may be the subject of this indemnification. In the
event that the indemnitor so elects, it will so notify the
indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked
to indemnify the indemnitee except with the indemnitor's prior
written consent.
ARTICLE XI
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; acts of terrorism; sabotage; strikes; epidemics;
riots; power failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation,
19
computer (hardware or software) or telephone communication service; accidents;
labor disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation; provided,
however, that in the event of a failure or delay, the Custodian (i) shall not
discriminate against the Fund in favor of any other customer of the Custodian in
making computer time and personnel available to input or process the
transactions contemplated by this Agreement, and (ii) shall use its best efforts
to ameliorate the effects of any such failure or delay. The Custodian will be
liable for any failure or delay in performance of its obligations under this
Agreement or any loss whatsoever arising out of the Custodian's failure to (i)
adopt a Disaster Recovery Plan (as defined in Article VIII above); or (ii)
reasonably implement and adhere to such Disaster Recovery Plan.
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Trust,
all records and other information relative to the Trust and prior, present, or
potential shareholders of the Trust (and clients of said shareholders), and not
to use such records and information for any purpose other than the performance
of its responsibilities and duties hereunder, except (i) after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to comply, (ii)
when requested to divulge such information by duly constituted authorities, or
(iii) when so requested by the Trust. Records and other information which have
become known to the public through no wrongful act of the Custodian or any of
its employees, agents or representatives, and information that was already in
the possession of the Custodian prior to receipt thereof from the Trust or its
agent, shall not be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by the
Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time. In this regard, the Custodian shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent unauthorized
access to or use of, records and information relating to the Trust and its
shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 EFFECTIVE PERIOD. This Agreement shall become effective as of the
date first written above and will continue in full force and effect
until terminated as hereinafter provided.
13.2 TERMINATION. This Agreement may be terminated by either party upon
giving 90 days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties.
Notwithstanding the foregoing, this Agreement may be terminated by
any party upon the breach of the other party of any material term of
this Agreement if such breach is not cured within 15 days of notice
of such breach to the breaching party. In addition, the Trust may,
at any time,
20
immediately terminate this Agreement in the event of the appointment
of a conservator or receiver for the Custodian by regulatory
authorities or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent
jurisdiction.
13.3 APPOINTMENT OF SUCCESSOR CUSTODIAN. If a successor custodian shall
have been appointed by the Board of Trustees, the Custodian shall,
upon receipt of a notice of acceptance by the successor custodian,
on such specified date of termination (i) deliver directly to the
successor custodian all Securities (other than Securities held in a
Book-Entry System or Securities Depository) and cash then owned by
the Fund and held by the Custodian as custodian, and (ii) transfer
any Securities held in a Book-Entry System or Securities Depository
to an account of or for the benefit of the Fund at the successor
custodian, provided that the Trust shall have paid to the Custodian
all fees, expenses and other amounts to the payment or reimbursement
of which it shall then be entitled. In addition, the Custodian
shall, at the expense of the Trust, transfer to such successor all
relevant books, records, correspondence, and other data established
or maintained by the Custodian under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from the
form in which the Custodian has maintained the same, the Trust shall
pay any expenses associated with transferring the data to such
form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from the
Custodian's personnel in the establishment of books, records, and
other data by such successor. Upon such delivery and transfer, the
Custodian shall be relieved of all obligations under this Agreement.
13.4 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian is
not designated by the Trust on or before the date of termination of
this Agreement, then the Custodian shall have the right to deliver
to a bank or trust company of its own selection, which bank or trust
company (i) is a "bank" as defined in the 1940 Act, and (ii) has
aggregate capital, surplus and undivided profits as shown on its
most recent published report of not less than $25 million, all
Securities, cash and other property held by Custodian under this
Agreement and to transfer to an account of or for the Fund at such
bank or trust company all Securities of the Fund held in a
Book-Entry System or Securities Depository. Upon such delivery and
transfer, such bank or trust company shall be the successor
custodian under this Agreement and the Custodian shall be relieved
of all obligations under this Agreement. In addition, under these
circumstances, all books, records and other data of the Trust shall
be returned to the Trust.
ARTICLE XIV
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust, as from time to time amended. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has been
signed and
21
delivered by an authorized officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the above-mentioned Agreement and
Declaration of Trust.
ARTICLE XV
MISCELLANEOUS
15.1 COMPLIANCE WITH LAWS. The Trust has and retains primary
responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with the 1940 Act, the
Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the
USA Patriot Act of 2002 and the policies and limitations of the Fund
relating to its portfolio investments as set forth in its Prospectus
and statement of additional information. The Custodian's services
hereunder shall not relieve the Trust of its responsibilities for
assuring such compliance or the Board of Trustee's oversight
responsibility with respect thereto.
15.2 AMENDMENT. This Agreement may not be amended or modified in any
manner except by written agreement executed by the Custodian and the
Trust.
15.3 ASSIGNMENT. This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
the Trust without the written consent of the Custodian, or by the
Custodian without the written consent of the Trust.
15.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to
conflicts of law principles. To the extent that the applicable laws
of the State of Ohio, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with
the 1940 Act or any rule or order of the SEC thereunder.
15.5 NO AGENCY RELATIONSHIP. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other
party to this Agreement, or to conduct business in the name, or for
the account, of the other party to this Agreement.
15.6 SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties that
are similar or identical to some or all of the services provided
hereunder.
15.7 INVALIDITY. Any provision of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
22
render unenforceable such provision in any other jurisdiction. In
such case, the parties shall in good faith modify or substitute such
provision consistent with the original intent of the parties.
15.8 NOTICES. Any notice required or permitted to be given by either
party to the other shall be in writing and shall be deemed to have
been given on the date delivered personally or by courier service,
or three days after sent by registered or certified mail, postage
prepaid, return receipt requested, or on the date sent and confirmed
received by facsimile transmission to the other party's address set
forth below:
Notice to the Custodian shall be sent to:
U.S Bank, N.A.
0000 X. Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
and notice to the Trust shall be sent to:
Xxxxxxx Xxxxx Investment Trust
c/o Ultimus Fund Solutions, LLC
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
15.9 MULTIPLE ORIGINALS. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an
original, but such counterparts shall together constitute but one
and the same instrument.
15.10 NO WAIVER. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate
as a waiver thereof. The exercise by either party hereto of any
right hereunder shall not preclude the exercise of any other right,
and the remedies provided herein are cumulative and not exclusive of
any remedies provided at law or in equity.
15.11 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in
the prospectus or statement of additional information for the Fund
and such other printed matter as merely identifies Custodian as
custodian for the Fund. The Trust shall submit printed matter
requiring approval to Custodian in draft form, allowing sufficient
time for review by Custodian and its counsel prior to any deadline
for printing.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
XXXXXXX XXXXX INVESTMENT TRUST U.S. BANK NATIONAL ASSOCIATION
By: /s/ X. Xxxxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
---------------------------------- -------------------------------------
Name: X. Xxxxxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxx
-------------------------------- -----------------------------------
Title: Chairman Title: Vice President
------------------------------- ----------------------------------
24
EXHIBIT A
---------
AUTHORIZED PERSONS - XXXXXXX XXXXX INVESTMENT TRUST
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
AUTHORIZED PERSONS Specimen Signatures
------------------ -------------------
President: Xxxx X. Xxxxx, XX /s/ Xxxx X. Xxxxx, XX
--------------------------------------
Vice President: Xxxxxxx X. Xxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Secretary: Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
--------------------------------------
Assistant Vice President: Xxxxx X. Xxxx /s/ Xxxxx X. Xxxx
--------------------------------------
Assistant Treasurer: Xxxx X. Xxxxx /s/ Xxxx X. Xxxxx
--------------------------------------
Assistant Treasurer: Xxxxxxx X. Bridge /s/ Xxxxxxx X. Bridge
--------------------------------------
Assistant Secretary: Xxxx X. Xxxxx /s/ Xxxx X. Xxxxx
--------------------------------------
OTHER:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
A-1
AUTHORIZED PERSONS Specimen Signatures
------------------ -------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
2
EXHIBIT B
---------
U.S. BANK INSTITUTIONAL CUSTODY SERVICES
STANDARDS OF SERVICE GUIDE
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a direct
member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of New
York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the WALL STREET JOURNAL.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received
three (3) business days prior to any payment or settlement in order for the
USBank standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide
is subject to change. Should any changes be made USBank will
provide you with an updated copy of its Standards of Service
Guide.
B-1
U.S. BANK TRADE SETTLEMENT INSTRUCTIONS
TRANSACTION TYPE DELIVERY INSTRUCTIONS
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional #
if applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account # (your U.S. Bank Trust account number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as ABA#: 000000000
collateral for repurchase agreements Routing Symbol: 1040 Special
For Account # (your U. S. Bank Trust account number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in Milwaukee, XX Xxx 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e.,
pair off, repo, tri-party
BBI or OBI For further credit to account: (trust
acct. #, contact name & phone number)
B-2
USBANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will
be made on the immediately following business day.
B-3
USBANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO USBANK POSTING
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to 5 business days prior to expiration Upon receipt
expiration date
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities None Upon receipt
Liquidations, Bankruptcies, received
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will
be sold.
B-4
EXHIBIT C
---------
FUND NAMES
Separate Series of Xxxxxxx Investment Trust
Name of Series
--------------
CHESAPEAKE FAMILY OF FUNDS
C-1
EXHIBIT D
---------
FEE SCHEDULE - XXXXXXX XXXXX INVESTMENT TRUST
--------------------------------------------------------------------------------
DOMESTIC CUSTODY SERVICES
FEE SCHEDULE at July, 2007
--------------------------------------------------------------------------------
ANNUAL FEE BASED UPON MARKET VALUE PER FUND*
70 basis point on average daily market value
Minimum annual fee per fund - $4,800
Plus portfolio transaction fees
- PORTFOLIO TRANSACTION FEES
$ 4.00 per book entry DTC transaction (self-affirmed)
$ 7.50 per book entry DTC transaction (USB-affirmed)
$ 4.00 per principal paydown
$ 7.00 per US Bank repurchase agreement transaction
$15.00 per option/future contract written, exercised or expired
$10.00 per book entry Federal Reserve transaction
$15.00 per mutual fund trade
$30.00 per physical security transaction
$ 6.50 per cash wire transfer
$ 5.50 - Fed Wire Charge on Repo Collateral in/out
o A transaction is a purchase/sale of a security, free receipt/free
delivery, maturity, tender or exchange.
o No charge for the initial conversion free receipt.
o Overdrafts - charged to the account at prime interest rate plus 2.
PLUS OUT-OF-POCKET EXPENSES - Including but not limited to expenses incurred in
the safekeeping, delivery and receipt of securities, shipping, transfer fees,
extraordinary expenses based upon complexity, and all other out-of-pocket
expenses.
EARNINGS CREDITS
On a monthly basis, any earnings credits generated from uninvested DDA balances
will be applied against any cash management service fees generated.
Fees are billed monthly.
* Subject to annual CPI increase, Milwaukee MSA.
--------------------------------------------------------------------------------
D-1
EXHIBIT E
---------
SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION
XXXXXXX XXXXX INVESTMENT TRUST
The Shareholder Communications Act of 1985 requires banks and trust companies to
make an effort to permit direct communication between a company which issues
securities and the shareholder who votes those securities.
Unless you specifically require us to NOT release your name and address to
requesting companies, we are required by law to disclose your name and address.
Your "yes" or "no" to disclosure will apply to all securities U.S. Bank holds
for you now and in the future, unless you change your mind and notify us in
writing.
__X__ YES U.S. Bank is authorized to provide the Trust's name, address
and security position to requesting companies whose stock is
owned by the Trust.
_____ NO U.S. Bank is NOT authorized to provide the Trust's name,
address and security position to requesting companies whose
stock is owned by the Trust.
XXXXXXX XXXXX INVESTMENT TRUST
By: /s/ X. Xxxxxxxxx Xxxxxxx
------------------------------
Title: X. Xxxxxxxxx Xxxxxxx
---------------------------
Date: 07/24/2007
----------------------------
E-1
