EXHIBIT 23(G)(1)
CUSTODIAN SERVICING AGREEMENT
CUSTODIAN SERVICING AGREEMENT
THIS AGREEMENT made as of December ___, 1999, between The Legacy Funds,
Inc., a Delaware Business Truss (hereinafter called the "Company"), and Firstar
Bank Milwaukee, N.A., a Wisconsin corporation (hereinafter called "Custodian").
WHEREAS, the Company is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each with
its own separate investment portfolio; and
WHEREAS, the Company desires that the securities and cash of The Legacy
Growth Fund and each additional series of the Company listed on Exhibit A
attached hereto (each, a "Fund"), as may be amended from time to time, shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
options, receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Company by the President and
any Vice President of the Company or such other persons who may be designated by
or pursuant to a resolution of the Board Trustees of the Company to give
instructions to the Custodian, such persons to sign singly or in such
combinations as may be designated in such resolution.
The term "instructions" shall mean an officers' certificate, and
"facsimile instructions" shall mean instructions delivered by facsimile
transmission.
The term "oral instructions" shall mean a request or direction delivered
orally by the President or any Vice President of the Company or such other
officers of the Company or such other persons who may be designated by or
pursuant to a resolution of the Board of Trustees of the Company to give oral
instructions to the Custodian, such persons to act singly or in such
combinations as may be designated in such resolution.
The term "authorized person" shall mean the President or any Vice
President of the Company or such other offers of the Company or such other
persons who may be designated by or pursuant to a resolution of the Board of
Trustees of the Company to give officers' certificates, instructions or oral
instructions, as the case may be, acting singly or in such combinations as may
be designated in such resolution.
The word "Board" shall mean the Board of Trustees of the Company.
2. APPOINTMENT.
A. The Company hereby appoints the Custodian to provide custodian services
to the Legacy Growth Fund and for each additional series of the Company listed
on Exhibit A attached hereto (each a "Fund") 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 in
consideration of the compensation provided for herein.
B. The Custodian shall receive and keep safe the securities, investments,
cash and other assets of the Fund in accordance with this Agreement.
C. In performing its duties hereunder, the Custodian will comply with all
applicable requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and the applicable rules and regulations thereunder and any
laws, rules and regulations of governmental authorities having jurisdiction and
will act in conformity with the instructions and directions of the Board of
Trustees of the Company and such other authorized persons of the Company as may
be designated for such purpose by the Board of Trustees.
3. NAMES, TITLES, AND SIGNATURES OF THE COMPANY'S OFFICERS
An officer of the Company will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates and
instructions described in Section 1 hereof, together with any changes which may
occur from time to time.
4. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts in the
name of the Company, subject only to draft or order by Custodian acting pursuant
to the terms of this Agreement. Custodian shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Company. Custodian shall make payments of cash to, or for the
account of, the Company from such cash only:
(a) for the purchase of securities for the portfolio of the Fund
upon the delivery of such securities to Custodian, registered
in the name of the Company or of the nominee of Custodian
referred to in Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of beneficial
interest of the Fund upon delivery thereof to Custodian, or
upon proper instructions from the Company;
(c) for the payment of interest, dividends, distributions, taxes,
investment adviser's fees or operating expenses (including,
without limitation thereto, fees for legal, accounting,
auditing and custodian services, expenses for printing and
postage and payments under any Rule 12b-1 plan);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund
held by or to be delivered to Custodian; or
(e) for other proper corporate purposes in accordance with a
resolution of the Board of Trustees of the Company or an
officers' certificate.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the Company issues
appropriate oral or facsimile instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two business days
thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Company.
C. Custodian shall make federal funds available to the Company as of
specified times agreed upon from time to time by the Company and the Custodian,
which times shall not be in excess of the times required under banking
regulations, in the amount of checks received in payment for shares of the Fund
which are deposited into the Fund's account.
D. If so directed by the Company, Custodian will invest any and all
available cash in overnight cash-equivalent investments as specified by the
investment manager.
5. SEGREGATED ACCOUNTS
The Custodian shall hold in a separate account, and physically segregate
at all times from those of the Custodian and any other persons, all securities,
investments, cash and other assets received by it from or for the account of the
Fund. All such securities, investments, cash and assets shall be held for the
benefit of the Fund and shall be delivered or disposed of by the Custodian only
for the account of, and in accordance with, the instructions of the Company
pursuant to the terms of this Agreement.
6. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities of
the Company held by it pursuant to this Agreement. Custodian agrees to release,
transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefor;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone or
other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of beneficial interest
of the Fund upon delivery thereof to Custodian;
(i) upon receipt of payment in connection with any repurchase agreement
related to securities held hereunder;
(j) for delivery in connection with any loans of securities made by the
Fund, but only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Company, which may be in
the form of cash;
(k) for delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, but only against
receipt of amounts borrowed;
(l) for delivery in accordance with the provisions of any agreement
between the Company and a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and a member of The
National Association of Securities Dealers, Inc., 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 connections with transactions by the Fund;
(m) for release of securities to designated brokers under covered call
options; provided, however, that such securities shall be released
only upon payment to the Custodian of monies for the premium due and
a receipt for the securities which are to be held in escrow and upon
expiration of the option the Custodian will receive from brokers the
securities previously deposited; or
(n) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b), (d),
(e), (f), and (g), securities or cash receivable in exchange therefor shall be
deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of each item of this Section 5 (other than item (n)) and, in respect of
item (n), upon receipt of an officers' certificate specifying the securities to
be delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made, provided, however,
that an officers' certificate need not precede any such transfer, exchange or
delivery of a money market instrument, or any other security with same or
next-day settlement, if an authorized person or persons of the Company issue
appropriate oral or facsimile instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two business days
thereafter.
In no event may any member of the Company's Board of Trustees or any
officer, employee or agent of the Company withdraw any securities.
7. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Company, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Company, all necessary ownership certificates required by the Internal
Revenue Code of 1986, as amended (the "Code") or the Income Tax Regulations (the
"Regulations") of the United States Treasury Department (the "Treasury
Department") or under the laws of any state now or hereafter in effect,
inserting the Company's name on such certificates as the owner of the securities
covered thereby, to the extent it may lawfully do so.
8. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian shall
register all securities, except such as are in bearer form, in the name of a
registered nominee of Custodian as defined in the Code and any Regulations of
the Treasury Department issued thereunder or in any provision of any subsequent
federal tax law exempting such transaction from liability for stock transfer
taxes, and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or regulations or under the laws of
any state. Such nominee shall hold only assets belonging to customers of the
Custodian and shall not hold any assets in which the Custodian has any
beneficial interest. All securities held by Custodian hereunder shall be at all
times identified in its records as being held in an account or accounts of
Custodian containing only the assets of the Company.
The Company shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Company and which may from time to time be
registered in the name of the Company.
9. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall execute in blank and deliver, or cause to be so executed and
delivered, to the Company promptly all notices, proxies and proxy soliciting
materials with respect to such securities, such proxies to be executed by the
registered holder of such securities (if registered otherwise than in the name
of the Company), but without indicating the manner in which such proxies are to
be voted. The Custodian shall transmit or cause to be transmitted promptly to
the Company all other written information (including, without limitation,
information concerning calls and maturities of securities, the availability and
expiration of rights and notices of exercise of call and put options written by
the Fund) received by the Custodian from issuers of the securities and other
investments held hereunder and, in the case of tender or exchange offers, all
written information received from the party (or its agent) making the tender or
exchange offer.
10. TRANSFER TAX AND OTHER DISBURSEMENTS
The Company shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection with
securities delivered to it or by it under this Agreement as may be required
under the provisions of the Code and any Regulations of the Treasury Department
issued thereunder, or under the laws of any state, to exempt from taxation any
exempt transfers and/or deliveries of any such securities.
11. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to this
Agreement such compensation as may from time to time be agreed upon in writing
between the two parties. Until modified in writing, such compensation shall be
as set forth in Exhibit A attached hereto. Such fees shall become effective and
begin to accrue upon the first public offering and sale of the shares of the
Fund.
Custodian shall not be liable for any action taken for a proper corporate
purpose in good faith upon any certificate provided to the custodian by a duly
authorized officer or agent of the Company or a certified copy of any resolution
of the Board, and may rely on the genuineness of any such document which it may
in good faith believe to have been validly executed.
The Company agrees to indemnify and hold harmless Custodian and its
nominee from all taxes (other than income and similar taxes), charges, expenses,
assessments, claims and liabilities (including reasonable counsel fees) incurred
or assessed against it or by its nominee in connection with the performance of
this Agreement, except such as may arise from its or its nominee's own bad
faith, negligent action, negligent failure to act or willful misconduct or
refusal or failure to comply with the terms of this Agreement. Custodian is
authorized to charge any account of the Fund for such items. In the event of any
advance of cash for any purpose made by Custodian resulting from orders or
instructions of the Company, or in the event that Custodian or its nominee shall
incur or be assessed any taxes (other than income and similar taxes), charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own bad
faith, negligent action, negligent failure to act or willful misconduct or
refusal or failure to comply with the terms of this Agreement, any property at
any time held for the account of the Company shall be security therefor.
Custodian agrees to indemnify and hold harmless the Company, each
controlling person of the Company and their respective directors, trustees and
officers (each a "Firstar Indemnitee") from all charges, expenses, assessments,
claims, demands, losses, expenses and liabilities (whether with or without basis
in fact or law) of any and every nature (including reasonable attorneys' fees)
which such Firstar Indemnitee may sustain or incur or which may be asserted
against such Firstar Indemnitee by any person as a result of the bad faith,
negligence or willful misconduct of the Custodian (or any nominee of the
Custodian or any subcustodian) or any refusal or failure of the Custodian (or
any such nominee or subcustodian) to comply with the terms of this Agreement in
connection with the performance of the Custodian's duties under this Agreement.
The trustees and shareholders of the Company shall not be personally liable for
any of the obligations of the Fund or the Company under this Agreement or in
connection with any matter arising under or in connection with this Agreement.
12. SUBCUSTODIANS
Custodian is hereby authorized to engage at its own expense another bank
or trust company as a subcustodian for all or any part of the Company's assets,
so long as any such bank or trust company is itself qualified to act as a
custodian under the 1940 Act and the rules and regulations thereunder and
provided further that, if the Custodian utilizes the services of a subcustodian,
the Custodian shall remain fully liable and responsible for any losses caused to
the Company by the subcustodian as fully as if the Custodian was directly
responsible for any such losses under the terms of this Agreement. Such
subcustodian shall agree to comply with the relevant provisions of the 1940 Act
and other applicable rules and regulations. No subcustodian shall be employed
without prior written notice to the Company.
Such a subcustodian may be a foreign subcustodian in accordance with Rule
17f-5 under the 1940 Act, provided that the assets held by such foreign
subcustodian shall be limited to "foreign securities" (as defined in Rule 17f-5
under the 0000 Xxx) and cash and cash equivalents in such amounts as the
Custodian or the Company may determine to be reasonably necessary to effect the
Fund's foreign securities transactions.
Notwithstanding anything contained herein, if the Company requires the
Custodian to engage specific subcustodians for the safekeeping and/or clearing
of assets, the Company agrees to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such subcustodian in regard to the Company's assets, except as
may arise from Custodian's own bad faith, negligent action, negligent failure to
act or willful misconduct.
13. REPORTS BY CUSTODIAN
Custodian shall furnish the Company periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Company.
Custodian shall furnish to the Company, at the end of every month, a list of the
portfolio securities for the Fund showing the aggregate cost and adjusted
average cost of each issue and the market value thereof at the end of such month
and stating the cash account of the Fund. The books and records of Custodian
pertaining to its actions under this Agreement shall be open to inspection and
audit at reasonable times by officers of, and by auditors employed by, the
Company.
14. 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 Company
all records and other information relative to the Company and prior, present or
potential shareholders of the Company (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 after prior
notification to and approval in writing by the Company, 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, after
being requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
15. DATA NECESSARY TO PERFORM SERVICES
The Custodian shall provide to the Company's transfer agent, fund
accountant, administrator, investment adviser and distributor such information
and data produced or maintained by it under this Agreement as may be necessary
for such other persons to perform their duties and obligations under their
respective agreements with the Company and in such form as may be required by
such persons.
16. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in effect for
successive two year periods.
17. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Company, or by Custodian, on
ninety (90) days notice prior to the other party, given in writing and sent by
registered mail or overnight courier to:
Firstar Bank Milwaukee, N.A.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: [_______________]
or to the Company at:
The Legacy Funds, Inc.
00 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: President
as the case may be, or such other address of a party as may be specified by such
party by written notice hereunder. Upon any termination of this Agreement,
pending appointment of a successor to Custodian or a vote of the shareholders of
the Fund to dissolve or to function without a custodian of its cash, securities
and other property, Custodian shall not deliver cash, securities or other
property of the Fund to the Company, but may deliver them to a bank or trust
company of its own selection that meets the requirements of the 1940 Act as a
Custodian for the Company to be held under terms similar to those of this
Agreement, provided, however, that Custodian shall not be required to make any
such delivery or payment until full payment shall have been made by the Company
of all liabilities constituting a charge on or against the properties then held
by Custodian or on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs and expenses, subject to
the provisions of Section 10 of this Agreement.
18. NOTICES
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered to the addresses
set forth or provided for in Section 16.
19. ASSIGNMENT
This Agreement may not be assigned by the Custodian, nor may the Custodian
delegate its duties hereunder, without the prior written consent of the Company
approved by a resolution of its Board of Trustees, and any assignment not in
compliance with this Section shall be void. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
20. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Company approves by resolution the
use of such central securities clearing agency or securities depository. With
respect to securities of the Fund which are maintained in any such clearing
agency or securities depository, the records of the Custodian shall identify by
book entry or otherwise those securities belonging to the Fund. Any securities
deposited with any such clearing agency or securities depository shall at all
times be segregated from any assets controlled by the Custodian in other than a
fiduciary or custodian capacity. All books and records maintained by the
Custodian which relate to the Fund's participation in any such clearing agency
or securities depository shall at all times during regular business hours be
open to the inspection of authorized persons of the Company, including without
limitation its independent public accountants.
21. RECORDS
Custodian shall keep records relating to its services to be performed
hereunder, in the form and manner, and for such period, as it may deem advisable
and is agreeable to the Company but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Section 31 of
the 1940 Act and the rules thereunder. Custodian agrees that all such records
prepared or maintained by the Custodian relating to the services performed by
Custodian hereunder are the property of the Company and will be preserved,
maintained, and made available in accordance with such section and rules of the
1940 Act and will be promptly surrendered to the Company on and in accordance
with its request.
22. AMENDMENT; WAIVER
This Agreement may not be amended or changed except by a written
instrument signed by the parties hereto. No omission or delay on the part of
either party in requiring the due and punctual fulfillment by the other party of
any of its obligations hereunder shall constitute a waiver by the omitting or
delaying party of any of its rights to require such due and punctual fulfillment
of any obligation hereunder, whether similar or otherwise, or a waiver of any
remedy it may have hereunder or otherwise.
23. REPORTS BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide to the Company, at such times as the Company
may reasonably request, reports by the independent certified public accountants
of the Custodian on the accounting system, internal accounting control and
procedures for safeguarding securities, relating to the securities services
provided by the Custodian under this Agreement. Such reports shall be of
sufficient scope and in sufficient detail as may reasonably be required by the
Company, and shall provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such inadequacies,
shall so state.
24. GOVERNING LAW
This Agreement shall be governed by Wisconsin law. However, nothing herein
shall be construed in a manner inconsistent with the 1940 Act or any rule or
regulation promulgated by the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer in one or more counterparts as of the day
and year first written above.
THE LEGACY FUNDS, INC. FIRSTAR BANK MILWAUKEE, N.A.
By:_________________________________ By:_________________________________
Print:______________________________ Print:______________________________
Title:______________________________ Title:______________________________
Date:_______________________________ Date:_______________________________
Attest:_____________________________ Attest:_____________________________
CUSTODY SERVICES
ANNUAL FEE SCHEDULE - DOMESTIC FUNDS
EXHIBIT A
Separate Series of The Legacy Funds, Inc.
NAME OF SERIES DATE ADDED
Legacy Growth Fund December ___, 1999
Annual fee based upon market value
1 basis point (.0001) on assets of the fund
Minimum annual fee per fund - $3,000
Investment transactions (purchase, sale, exchange, tender, redemption, maturity,
receipt, delivery):
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$25.00 per mutual fund trade
$75.00 per Euroclear
$ 8.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
Variable Amount Demand Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
Extraordinary expenses: Based on time and complexity involved.
Plus out-of-pocket expenses. Charged to the account, including but not
limited to:
$10.00 per variation margin transaction
$10.00 per Fed wire deposit or withdrawal Plus out-of-pocket expenses.
Foreign securities custody services quoted separately.
Fees and out-of-pocket expenses are billed to the Fund monthly, based upon
market value at the beginning of the month.
