CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this 28th day of August,
2001, by and between the Zodiac Trust, a Delaware business trust (the "Trust")
and Firstar Bank, N.A., a national banking association (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 Trust desires to retain Firstar Bank, N.A. to act as Custodian
for each series of the Trust listed on Exhibit C hereto (as amended from time to
time) (each a "Portfolio", collectively the "Portfolios");
WHEREAS, the Trust desires that the Portfolio's Securities (defined below)
and cash be held and administered by the Custodian pursuant to this Agreement;
and
WHEREAS, the Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the 1940 Act;
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
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
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 Portfolio 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 from time to time amended.
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 Portfolio.
1.5 "Fund Custody Account" shall mean any of the accounts in the name of
the Trust, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.7 "Officer" shall mean the Chairman, President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Trust.
1.8 "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.
1.9 "Proper Instructions" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.
1.10 "Securities Depository" shall mean The Depository Trust Company and
(provided that Custodian shall have received a copy of a resolution of
the Board of Trustees, certified by an Officer, specifically approving
the use of such clearing agency as a depository for the Portfolio) any
other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and 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.
1.11 "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 has the facilities to clear and
to service.
1.12 "Shares" shall mean, with respect to a Portfolio, the units of
beneficial interest issued by the Trust on account of the Portfolio.
1.13 "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, (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 Portfolio based on the standards specified in Section 3.3 below.
Such contract shall include provisions that provide: (i) for
indemnification or insurance arrangements (or any combination of the
foregoing) such that the Portfolio will be adequately protected
against the risk of loss of assets held in accordance with such
contract; (ii) that the Portfolio'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 Portfolio'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 Portfolio or as being held
by a third party for the benefit of the Portfolio; (v) that the
Portfolio's independent public accountants will be given access to
those records or confirmation of the contents of those records; and
(vi) that the Portfolio will receive periodic reports with respect to
the safekeeping of the Portfolio's assets, including, but not limited
to, notification of any transfer to or from a Portfolio's account or a
third party account containing assets held for the benefit of the
Portfolio. Such contract may contain, in lieu of any or all of the
provisions specified above, such other provisions that the Custodian
determines will provide, in their entirety, the same or a greater
level of care and protection for Portfolio assets as the specified
provisions, in their entirety.
1.14 "Written Instructions" shall mean (i) written communications actually
received by the Custodian and signed by an Authorized Person, or (ii)
communications by telex or any other such system from one or more
persons reasonably believed by the Custodian to be Authorized Persons,
or (iii) communications between electro-mechanical or electronic
devices provided that the use of such devices and the procedures for
the use thereof shall have been approved by resolutions of the Board
of Trustees, a copy of which, certified by an Officer, shall have been
delivered to the Custodian.
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 Portfolio
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.
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 Declaration of Trust certified by the Secretary;
(b) A copy of the Bylaws of the Trust 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 then current Prospectus of the Portfolio; and
(e) A certification of the Chairman and Secretary of the Trust
setting forth the names and signatures of the current Officers of
the Trust and other Authorized Persons.
2.3 Notice of Appointment of Dividend and Transfer Agent. The Trust agrees
to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent of the
Portfolio.
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 Portfolio (other than Securities
maintained in a 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 Portfolio, 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 Portfolio, 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 Portfolio
which are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Portfolio 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
Portfolio shall be at the Custodian's expense and shall not
relieve the Custodian of any of its obligations or liabilities
under this Agreement.
(b) If, after the initial approval of Sub-Custodians by the Board of
Trustees in connection with this Agreement, the Custodian wishes
to appoint other Sub-Custodians to hold property of the
Portfolio, it will so notify the Trust and provide it with
information reasonably necessary to determine any such new
Sub-Custodian's eligibility under Rule 17f-5 under the 1940 Act,
including a copy of the proposed agreement with such
Sub-Custodian. The Trust shall at the meeting of the Board of
Trustees next following receipt of such notice and information
give a written approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule
17f-5(a)(1)(iii).
(d) 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 Portfolio with a particular
Sub-Custodian and of any material changes in the Portfolio's
arrangements. The Custodian shall promptly take such steps as may
be required to withdraw assets of the Portfolio from any
Sub-Custodian that has ceased to meet the requirements of Rule
17f-5 under the 1940 Act.
(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 Portfolio.
The Custodian further warrants that a Portfolio's assets will be
subject to reasonable care, based on the standards applicable to
custodians in the relevant market, if maintained with each
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), the method of
keeping custodial records, and the security and data protection
practices; (ii) whether the Sub-Custodian has the requisite
financial strength to provide reasonable care for Portfolio
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 Portfolio 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 to monitor the
appropriateness of maintaining the Portfolio's assets with a
particular Sub-Custodian and the contract governing the
Portfolio's arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Trust shall deliver, or cause to
be delivered, to the Custodian all of the Portfolio's Securities, cash
and other assets, including (a) all payments of income, payments of
principal and capital distributions received by the Portfolio with
respect to such Securities, cash or other assets owned by the
Portfolio at any time during the period of this Agreement, and (b) all
cash received by the Portfolio for the issuance, at any time during
such period, 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 Portfolio in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) Prior to a deposit of Securities of the Portfolio in any
Securities Depository or Book-Entry System, the Trust shall
deliver to the Custodian a resolution of the Board of Trustees,
certified by an Officer, authorizing and instructing the
Custodian on an on-going basis to deposit in such Securities
Depository or Book-Entry System all Securities eligible for
deposit therein and to 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 Portfolio 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
Portfolio maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Portfolio.
(d) If Securities purchased by the Portfolio 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 Portfolio. If
Securities sold by the Portfolio 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 on the records of the Custodian to reflect such
transfer and payment for the account of the Portfolio.
(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 Portfolio are kept) on the
internal accounting controls and procedures for safeguarding
Securities deposited in such Book-Entry System or Securities
Depository.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to
the Portfolio resulting (i) from the use of a Book-Entry System
or Securities Depository by reason of any negligence or willful
misconduct on the part of Custodian or any Sub-Custodian
appointed pursuant to Section 3.3 above or any of its or their
employees, or (ii) from failure of Custodian or any such
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 Portfolio arising from the use of such Book-Entry
System or Securities Depository, if and to the extent that the
Portfolio has not been made whole for any such loss or damage.
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 Portfolio 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 appointed pursuant to
Section 3.3 above) 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 such
Sub-Custodian) of such receipts as are 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 such Sub-Custodian) of evidence of
title thereto in favor of the Portfolio 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
Portfolio;
(c) For the payment of any dividends or capital gain distributions
declared by the Portfolio;
(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
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest; taxes;
administration, investment advisory, accounting, auditing,
transfer agent, custodian, director and legal fees; and other
operating expenses of the Portfolio; 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 Portfolio;
(g) For transfer in accordance with the provision 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 Portfolio;
(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 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
Securities from the Fund Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of the Portfolio 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 Portfolio; 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 Portfolio, the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above, or of 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 Securities, for examination in accordance
with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or 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 Portfolio;
(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
Portfolio, but only against receipt of such collateral as the
Trust shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any borrowings by the
Portfolio 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 Portfolio;
(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 Portfolio; 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 Portfolio:
(a) Subject to Section 7.4 below, collect on a timely basis all
income and other payments to which the Portfolio is entitled
either by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 7.4 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 Portfolio, 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 submit reports to the Internal Revenue
Service ("IRS") and to the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;
(f) Hold for the Portfolio, 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 Portfolio; 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 assets of the
Portfolio.
3.9 Registration and Transfer of Securities. All Securities held for the
Portfolio 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 Portfolio may be registered in the name of the
Portfolio, the Custodian, or any Sub-Custodian appointed pursuant to
Section 3.3 above, or in the name of any nominee of any of them, or in
the name of a Book-Entry System, Securities Depository or any nominee
of either thereof. 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 hereinabove referred to or in the name of a Book-Entry System
or Securities Depository, any Securities registered in the name of the
Portfolio.
3.10 Records.
(a) The Custodian shall maintain, for the Portfolio, complete and
accurate records with respect to Securities, cash or other
property held for the Portfolio, 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 Portfolio 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 rules and regulations of the Securities and Exchange
Commission, (ii) be the property of the Trust and at all 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 Securities and Exchange Commission, and (iii) if
required to be maintained by Rule 31a-1 under the 1940 Act, be
preserved for the periods prescribed in Rule 31a-2 under the 0000
Xxx.
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 and from time to time, 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 Portfolio under this
Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide the Trust with
such reports, as the Trust may reasonably request from time to time,
on the internal accounting controls and procedures for safeguarding
Securities, which are employed by the Custodian or any Sub-Custodian
appointed pursuant to Section 3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the
Portfolio, 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.
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 Portfolio 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 PORTFOLIO
4.1 Purchase of Securities. Promptly upon each purchase of Securities for
the Portfolio, Written Instructions shall be delivered to the
Custodian, specifying (a) the name of the issuer or writer of such
Securities, and the title or other description thereof, (b) the number
of shares, principal amount (and accrued interest, if any) or other
units purchased, (c) the date of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such
purchase, and (f) the name of the person to whom such amount is
payable. The Custodian shall upon receipt of such Securities purchased
by the Portfolio pay out of the moneys held for the account of the
Portfolio 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 Portfolio, if in the Fund Custody Account there is
insufficient cash available to the Portfolio 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 Portfolio is made by the Custodian in advance of receipt of the
Securities purchased but in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to
the Portfolio for such Securities to the same extent as if the
Securities had been received by the Custodian.
4.3 Sale of Securities. Promptly upon each sale of Securities by the
Portfolio, Written Instructions shall be delivered to the Custodian,
specifying (a) the name of the issuer or writer of such Securities,
and the title or other description thereof, (b) the number of shares,
principal amount (and accrued interest, if any), or other units sold,
(c) the date of sale and settlement, (d) the sale price per unit, (e)
the total amount payable upon such sale, and (f) the person to whom
such Securities are to be delivered. Upon receipt of the total amount
payable to the Portfolio 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 Portfolio 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, etc. 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 Portfolio, and (iii) income from cash, Securities or
other assets of the Portfolio. Any such credit shall be conditional
upon actual receipt by Custodian of final payment and may be reversed
if final payment is not actually received in full. The Custodian may,
in its sole discretion and from time to time, permit the Portfolio 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 Portfolio's transactions in the Fund
Custody Account. Any such advance shall be repayable immediately upon
demand made by Custodian.
ARTICLE V
REDEMPTION OF PORTFOLIO 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 Portfolio, the Custodian shall wire each amount specified in
such Proper Instructions to or through such bank as the Trust may
designate with respect to such amount in such Proper Instructions.
5.2 No Duty Regarding Paying Banks. The Custodian shall not be under any
obligation to effect payment or distribution by any bank designated in
Proper Instructions given pursuant to Section 5.1 above of any amount
paid by the Custodian to such bank in accordance with such Proper
Instructions.
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 Portfolio,
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 Portfolio,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Portfolio or in
connection with financial futures contracts (or options thereon)
purchased or sold by the Portfolio,
(c) which constitute collateral for loans of Securities made by the
Portfolio,
(d) for purposes of compliance by the Portfolio with requirements
under the 1940 Act for the maintenance of segregated accounts by
registered investment companies in connection with 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 Portfolio only. All Proper Instructions
relating to a segregated account shall specify the Portfolio.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement,
and shall be without liability to the Trust or any Portfolio for any
loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damage, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any Sub-Custodian
appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to rely on and may act upon advice of counsel 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. The Custodian shall not be under any obligation at
any time to ascertain whether the Trust or the Portfolio is in
compliance with the 1940 Act, the regulations thereunder, the
provisions of the Trust's charter documents or by-laws, or its
investment objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the Portfolio
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.
7.3 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.
7.4 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
Portfolio if such Securities are in default or payment is not made
after due demand or presentation.
7.5 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.
7.6 Express Duties Only. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set
forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Custodian.
7.7 Co-operation. 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 Portfolio and/or compute the value of the
assets of the Portfolio. 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 (a) the preparation of the Trust's
reports on Form N-1A and Form N-SAR and any other reports required by
the Securities and Exchange Commission, and (b) the fulfillment by the
Trust of any other requirements of the Securities and Exchange
Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Trust. The Trust shall indemnify and hold harmless
the Custodian and any Sub-Custodian appointed pursuant to Section 3.3
above, and any nominee of the Custodian or of such Sub-Custodian, from
and against any loss, damage, cost, expense (including attorneys' fees
and disbursements), liability (including, without limitation,
liability arising under the Securities Act of 1933, the 1934 Act, the
1940 Act, and any state or foreign securities and/or banking laws) or
claim arising directly or indirectly (a) from the fact that Securities
are registered in the name of any such nominee, or (b) from any action
or inaction by the Custodian or such Sub-Custodian (i) at the request
or direction of or in reliance on the advice of the Trust, or (ii)
upon Proper Instructions, or (c) generally, from the performance of
its obligations under this Agreement or any sub-custody agreement with
a Sub-Custodian appointed pursuant to Section 3.3 above, provided that
neither the Custodian nor any such Sub-Custodian shall be indemnified
and held harmless from and against any such loss, damage, cost,
expense, liability or claim arising from the Custodian's or such
Sub-Custodian's negligence, bad faith or willful misconduct.
8.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Trust from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability (including
without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign securities
and/or banking laws) or claim arising from the negligence, bad faith
or willful misconduct of the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above, or any nominee of the Custodian or of
such Sub-Custodian.
8.3 Indemnity to be Provided. If the Trust requests the Custodian to take
any action with respect to Securities, which may, in the opinion of
the Custodian, result in the Custodian or its nominee becoming liable
for the payment of money or incurring liability of some other form,
the Custodian shall not be required to take such action until the
Trust shall have provided indemnity therefor to the Custodian in an
amount and form satisfactory to the Custodian.
8.4 Security. If the Custodian advances cash or Securities to the
Portfolio 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 loss, damage, cost, expense (including
attorneys' fees and disbursements), liability or claim (except such as
may arise from its or its nominee's negligence, bad faith or willful
misconduct), then, in any such event, any property at any time held
for the account of the Portfolio shall be security therefor, and
should the Portfolio fail promptly to repay or indemnify the
Custodian, the Custodian shall be entitled to utilize available cash
of such Portfolio and to dispose of other assets of such Portfolio to
the extent necessary to obtain reimbursement or indemnification.
ARTICLE IX
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; 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, 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 the Custodian in the event of a failure
or delay (i) shall not discriminate against the Portfolio 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.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become effective as of its
execution and shall continue in full force and effect until terminated
as hereinafter provided.
10.2 Termination. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after
the date of the giving of such notice. 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 (a) 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
Portfolio and held by the Custodian as custodian, and (b) transfer any
Securities held in a Book-Entry System or Securities Depository to an
account of or for the benefit of the Portfolio 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. Upon such delivery and transfer,
the Custodian shall be relieved of all obligations under this
Agreement. The Trust may at any time 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.
10.3 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Trust on or before the date of termination
specified pursuant to Section 10.1 above, then the Custodian shall
have the right to deliver to a bank or corporation company of its own
selection, which (a) is a "bank" as defined in the 1940 Act and (b)
has aggregate capital, surplus and undivided profits as shown on its
then 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 Portfolio at
such bank or trust company all Securities of the Portfolio 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.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time to
time by the Trust and the Custodian. The fees and other charges in effect on the
date hereof and applicable to the Portfolio are set forth in Exhibit C attached
hereto.
ARTICLE XII
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 property of
the Trust as provided in the Trust's 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 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 Declaration of Trust.
ARTICLE XIII
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 (3) 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 Trust shall be sent to:
Zodiac Trust
Attention: Xxx Xxxxxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Custodian shall be sent to:
Firstar Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Telephone: (513) 632-_____
Facsimile: (000) 000-0000
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
14.2 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
Portfolio and such other printed matter as merely identifies Custodian
as custodian for the Portfolio. 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.
14.3 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.
14.4 Amendments. This Agreement cannot be changed orally and no amendment
to this Agreement shall be effective unless evidenced by an instrument
in writing executed by the parties hereto.
14.5 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each
of which shall be deemed an original but all of which together shall
constitute but one and the same instrument.
14.6 Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions
shall not be affected or impaired thereby.
14.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement shall
not be assignable by either party hereto without the written consent
of the other party hereto.
14.8 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
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.
FIRSTAR BANK, N.A. ZODIAC TRUST
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Senior Vice President Title: President
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EXHIBIT C
Firstar Bank, N.A.
Domestic Custody Fee Schedule
Name of Series
Conning Money Market Portfolio
Annual fee based upon market value 2 basis points per year Minimum annual fee
per fund - $3,000
Investment transactions (purchase, sale, exchange, tender, redemption, maturity,
receipt, delivery): $ 5.00 per disbursement (waived if Firstar is Administrator)
$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 $ 6.00 per short
sale/liability transaction $35.00 per option/futures contract $15.00 per
variation margin $15.00 per Fed wire deposit or withdrawal
Variable Amount Demand Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
Overdrafts - charged to the account at prime interest rate.
Plus out-of-pocket expenses, and extraordinary expenses based upon complexity
Fees are billed monthly, based upon market value at the beginning of the month
ZODIAC TRUST
Amendment to the Custody Agreement
THIS AMENDMENT dated as of January 1, 2002 to the Custody Agreement dated
as of August 1st, 2001, by and between Zodiac Trust, a Delaware business trust
and Firstar Bank, N.A, shall be as follows:
Effective January 1, 2002, the name Firstar Bank, N.A. has been changed to
U.S. Bank, N.A. Accordingly, all references to Firstar Bank, N.A. in this
Agreement should be replaced with U.S. Bank, N.A. Similarly, any references to
Firstar Mutual Fund Services, LLC should be replaced with U.S. Bancorp Fund
Services, LLC.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
ZODIAC TRUST U.S. BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Senior Vice President Title: President
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