EXHIBIT (8)(M)
FOREIGN CUSTODIAN MONITORING AGREEMENT
AGREEMENT made as of June 13, 1997 between Portico Funds, Inc., a Wisconsin
corporation ("Portico") and Firstar Investment Research and Management Company
("FIRMCO").
WHEREAS, Portico is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Portico has retained FIRMCO to furnish investment advisory and
other services;
WHEREAS, the Board of Directors of Portico wishes to delegate to FIRMCO the
responsibility of monitoring Portico's foreign custody arrangements as provided
in Rule 17f-5 under the 1940 Act, and FIRMCO is willing to undertake such
responsibility;
WHEREAS, the Board of Directors of Portico has determined that it is
reasonable to rely on FIRMCO to perform the responsibilities delegated to it
under this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and intending to be legally bound, the parties hereto agree as follows:
1. Portico hereby delegates to FIRMCO the responsibility of monitoring
foreign custody arrangements for Portico's existing and future investment
portfolios in accordance with Rule 17f-5 under the 1940 Act, and FIRMCO accepts
such delegation and agrees to furnish the services set forth herein.
2. With respect to each foreign custodian that holds assets of any
investment portfolio of Portico, FIRMCO shall:
(a) determine that Portico's assets will be subject to reasonable
care, based on the standards applicable to custodians in the relevant
market, if maintained with such foreign custodian, after considering
all factors relevant to the safekeeping of such assets, including,
without limitation:
(i) the foreign custodian's practices, procedures
and internal controls, including but not limited to, the physical
protections available for certificated securities (if
applicable), the method of keeping custodial records and the
security and data protection practices;
(ii) whether the foreign custodian has the requisite financial
strength to provide reasonable care for the Portico's assets;
(iii) the foreign custodian's general reputation and standing
and, in the case of a foreign securities depository, the
depository's operating history and number of participants;
and
(iv) whether Portico will have jurisdiction over and be able to
enforce judgments against the foreign custodian, such as by
virtue of the existence of any offices of the foreign custodian
in the United States or the foreign custodian's consent
to service of process in the United States.
(b) determine that the written contract with such foreign custodian
governing the foreign custody arrangements (or, in the case of a
foreign securities depository, that a written contract, the rules or
established practices or procedures of the depository or any
combination of the foregoing) will provide reasonable care for
Portico's assets based on the standards specified in paragraph 2(a)
above, and that such contract includes provisions that at least
provide the following; provided, however, that such contract may
contain, in lieu of any or all of the provisions specified in (b)(i)
through (b)(v), such other provisions that FIRMCO determines will
provide, in their entirety, the same or a greater level of care and
protection for Portico's assets as those provided in (b)(i) through
(b)(v) in their entirety:
(i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that Portico will be
adequately protected against the risk of loss of assets held
in accordance with such contract;
(ii) that Portico's assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the foreign custodian or its creditors except a claim of payment
for their safe custody or administration or, in the case of cash
deposits, liens or rights in favor of creditors of the custodian
arising under bankruptcy, insolvency, or similar laws;
(iii) that beneficial ownership for Portico'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 Portico or as being held by a third party
for the benefit of Portico and that Portico's independent public
accountants will be given access to those records or confirmation
of the contents of those records; and
(v) that Portico will receive periodic reports with respect to
the safekeeping of Portico's assets, including, but not limited
to, notification of any transfer to or from Portico's account or
a third party account containing assets held for the benefit of
Portico.
(c) establish a system to monitor the appropriateness of maintaining
Portico's assets with such foreign custodian and the contract
governing Portico's foreign custody arrangements;
(d) provide to Portico's Board of Directors, at least annually,
written reports notifying the Board of the placement of Portico's
assets with a particular foreign custodian and quarterly, of any
material change in Portico's foreign custodian arrangements; and
(e) withdraw Portico's assets from any foreign custodian as soon as
reasonably practicable, if the foreign custody arrangement no longer
meets the requirement of Rule 17f-5.
3. In providing the services set forth above, FIRMCO agrees to exercise
reasonable care, prudence and diligence such as a person having responsibility
for the safekeeping of Portico Funds' assets would exercise.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written
PORTICO FUNDS, INC.
By /s/ Xxxxx X. Xxxx
-----------------------
(Authorized Officer)
FIRSTAR INVESTMENT RESEARCH AND
MANAGEMENT COMPANY
By /s/ Xxxxx Xxxxxx
-----------------------
(Authorized Officer)
