Exhibit (g)(1)
CUSTODY AGREEMENT
This AGREEMENT, dated as of November 1, 2001, by and between the CCM
Advisors Funds, a Delaware business trust (the "Trust"), and FIRSTAR BANK, N.A.,
a national banking association (the "Custodian").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the"1940 Act"); and
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio; and
WHEREAS, the Trust desires to retain Firstar Bank, N.A. to act as Custodian
for each series of the Trust listed on Exhibit C attached hereto, (each
hereinafter referred to as a "Fund" and collectively the "Funds"), as may be
amended from time to time.
WHEREAS, the Trust desires that each Fund's Securities and cash be held and
administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(1) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and the Custodian 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 a Fund and named in Exhibit A hereto
or in such resolutions of the Board of Trustees, certified by an
Officer, as may be received by the Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from time to time serving
under the Trust's Articles of InTrust, 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 a Fund.
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 that set forth the
specific transaction or type of transaction involved, orally
transmitted to and accepted by the Custodian because such instructions
are: (i) in good faith, 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 promptly 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 a Fund) any other
clearing agency registered with the Securities and Exchange Commission
(the "SEC") 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 Fund, the units of beneficial
interest issued by the Trust on account of a Fund.
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
each Fund 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 each Fund will be adequately protected against
the risk of loss of assets held in accordance with such contract; (ii)
that each Fund's assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the
Sub-Custodian or its creditors except a claim of payment for their
safe custody or administration, in the case of cash deposits, liens or
rights in favor of creditors of the Sub-Custodian arising under
bankruptcy, insolvency, or similar laws; (iii) that beneficial
ownership for each Fund's assets will be freely transferable without
the payment of money or value other than for safe custody or
administration; (iv) that adequate records will be maintained
identifying the assets as belonging to each Fund or as being held by a
third party for the benefit of each Fund; (v) that the Trust's
independent public accountants will be given access to those records
or confirmation of the contents of those records; and (vi) that each
Fund will receive periodic reports with respect to the safekeeping of
its assets, including, but not limited to, notification of any
transfer to or from the Fund's account or a third party account
containing assets held for the benefit of the Fund. Such contract may
contain, in lieu of any or all of the provisions specified above, such
other provisions that the Custodian determines will provide, in their
entirety, the same or a greater level of care and protection for Fund
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 one or more Authorized
Persons, or (ii) communications by telex or any other such system from
one or more persons reasonably believed in good faith 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 constitutes and appoints the Custodian
as custodian of all Securities and cash owned by or in the possession
of each Fund at any time during the period of this Agreement.
2.2 Acceptance. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
2.3 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 Articles of InTrust 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 each Fund; and
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.
2.4 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 a Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of each Fund (other than Securities
maintained in a Securities Depository or Book-Entry System pursuant to
Section 3.3) shall be physically segregated from other Securities and
non-cash property in the possession of the Custodian (including the
Securities and non-cash property of the other series of the Trust) and
shall be identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of the
Trust coupled with the name of each Fund, subject only to draft or
order of the Custodian acting in accordance with this Agreement, in
which the Custodian shall enter and carry all Securities subject to
the provisions of this Agreement, cash and other assets of such Fund
which are delivered to it.
3.3 Compliance with SEC Rule 17f-5 and Rule 17f-7. (a) The Trust, by
resolution adopted by its Board of Trustees, hereby delegates to the
Custodian, with respect to the Funds, subject to Section (b) of Rule
17f-5 of the 1940 Act, the responsibilities set forth in this Section
3.3 with respect to any of a Fund's investments for which the primary
market is outside the United States and such cash and cash equivalents
as are reasonably necessary to effect such Fund's transactions in such
investments. The Custodian hereby accepts such delegation, and in
connection with such delegation shall appoint one or more agents to
act as a Sub-Custodian on behalf of each Fund, provided however, that
the appointment of any Sub-Custodian shall be subject to the approval
of the Trust's Board of Trustees, shall be at the Custodian's expense
and shall not relieve the Custodian of any of its obligations or
duties under this Agreement.
(b) If, after the Board of Trustees' initial approval of the Sub-Custodian
appointed in connection with this Agreement, the Custodian wishes to
appoint another Sub-Custodian on behalf of the Trust, the Custodian
will so notify the Trust and provide it with information reasonably
necessary to determine (i) such Sub-Custodian's eligibility under Rule
17f-5 and (ii) the eligibility of each "Eligible Securities
Depository" (as defined in Rule 17f-7(b)(1)), intended to be used by
such Sub-Custodian. The information to be provided shall include, but
shall not be limited to, a copy of the proposed agreement with such
Sub-Custodian, to which the Custodian and Trust shall be parties and
an analysis of the custody risks associated with maintaining a Fund's
investments with each Eligible Securities Depository to be used by
such Sub-Custodian. The Board of Trustees shall at the meeting next
following the Trust's receipt of such notice and information give an
approval or disapproval of the proposed Sub-Custodian.
(c) The Custodian shall establish a system to monitor (i) the
appropriateness of maintaining a Fund's assets with a particular
Sub-Custodian, and (ii) the contract governing the arrangements with
such Sub-Custodian. At the end of each calendar quarter, or at such
times as the Board of Trustees deems reasonable or appropriate, the
Custodian shall provide written reports notifying the Board of
Trustees of the placement of the Securities and cash of each Fund with
each Sub-Custodian and of any material change in a foreign custody
arrangement. In the event the Custodian determines that the custody
arrangements with the Sub-Custodian are no longer appropriate, the
Custodian shall notify the Board and shall promptly take such steps as
may be required to withdraw assets of any Fund from any Sub-Custodian
that has ceased to meet the requirements of Rule 17f-5.
(d) 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 each Fund. The
Custodian further warrants that a Fund'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 Fund
assets; (iii) the Sub-Custodian's general reputation and standing and,
in the case of an Eligible Securities Depository, the Eligible
Securities Depository's operating history and number of participants;
and (iv) whether the Fund will have jurisdiction over and be able to
enforce judgments against the Sub-Custodian, such as by virtue of the
existence of any offices of the Sub-Custodian in the United States or
the Sub-Custodian's consent to service of process in the United
States.
3.4 Delivery of Assets to Custodian. The Trust shall deliver, or cause to
be delivered, to the Custodian all of a Fund's Securities, cash and
other assets, including (a) all payments of income, payments of
principal and capital distributions received by such Fund with respect
to such Securities, cash or other assets owned by such Fund at any
time during the period of this Agreement, and (b) all cash received by
such Fund 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 a Fund in a Securities
Depository or in a Book-Entry System in accordance with applicable
Federal Reserve Board and SEC rules and regulations, subject to the
following provisions:
(a) Prior to a deposit of Securities of a Fund 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 a Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of the
Custodian in such Book-Entry System or Securities Depository which
includes only assets held by the Custodian as a fiduciary, custodian
or otherwise for customers.
(c) The records of the Custodian with respect to Securities of a Fund
maintained in a Book-Entry System or Securities Depository shall, by
book-entry, identify such Securities as belonging to such Fund.
(d) If Securities purchased by a Fund are to be held in a Book-Entry
System or Securities Depository, the Custodian shall pay for such
Securities upon (i) receipt of advice from the Book-Entry System or
Securities Depository that such Securities have been transferred to
the Depository Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the account
of such Fund. If Securities sold by a Fund are held in a Book-Entry
System or Securities Depository, the Custodian shall transfer such
Securities upon (i) receipt of advice from the Book-Entry System or
Securities Depository that payment for such Securities has been
transferred to the Depository Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment
for the account of such Fund. Upon request, the Custodian shall
provide the Trust on behalf of a Fund, confirmation of each transfer
to or from the Fund's account in the form of a written advice or
notice and shall provide the Trust on a Fund's behalf, copies of daily
transaction sheets reflecting each day's transactions in the
Book-Entry System or Securities Depository for the Fund.
(e) The Custodian shall provide the Trust with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of a Fund are kept) on the accounting
system, 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 a
Fund resulting (i) from the use of a Book-Entry System or Securities
Depository by reason of any bad faith, 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 a Fund arising from the use of such Book-Entry
System or Securities Depository, if and to the extent that such Fund
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 a Fund
Custody Account but only in the following cases:
(a) For the purchase of Securities for a Fund but only in accordance with
Section 4.1 of this Agreement and only (i) in the case of Securities
(other than options on Securities, futures contracts and options on
futures contracts), against the delivery to the Custodian (or any
Sub-Custodian 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 such Fund or any nominee referred to in Section 3.9 below;
and (iv) in the case of repurchase or reverse repurchase agreements
entered into between the Trust on behalf of a Fund and a bank which is
a member of the Federal Reserve System or between the Trust on behalf
of a Fund 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 a Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Trust to be paid by a Fund;
(d) In payment of the redemption price of Shares as provided in Section
5.1 below;
(e) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the account of
such Fund: interest; taxes; administration, investment advisory,
accounting, auditing, transfer agent, custodian, director and legal
fees; and other operating expenses of the Fund; in all cases, whether
or not such expenses are to be in whole or in part capitalized or
treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934
Act and a member of the NASD, relating to compliance with rules of The
Options Clearing Trust and of any registered national securities
exchange (or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions by a
Fund;
(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 a Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including the
Custodian), which deposit or account has a term of one year or less;
and
(i) For any other proper purpose, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board of
Trustees, certified by an Officer, specifying the amount and purpose
of such payment, declaring 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 a Fund Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of such Fund but only
against receipt of payment therefor in cash, by certified or cashiers
check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section
3.5 above;
(c) To an offeror's depository agent in connection with tender or other
similar offers for Securities of the Fund; provided that, in any such
case, the cash or other consideration is to be delivered to the
Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name of
the Fund, the Custodian or any Sub-Custodian 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 Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities
and cash, if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of the Fund,
but only against receipt of such collateral as the Trust shall have
specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by a Fund
requiring a pledge of assets by the Trust on behalf of such Fund, 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 or a Fund;
(l) For delivery in accordance with the provisions of any agreement among
the Trust on behalf of a Fund, 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 Trust and of any
registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other arrangements
in connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any agreement among
the Trust, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any contract
market (or any similar organization or organizations) regarding
account deposits in connection with transactions by the Fund;
(n) Upon receipt of instructions from a Fund's transfer agent, for
delivery to such transfer agent or to the holders of shares in
connection with distributions in kind as may be described from time to
time in such Fund's currently effective prospectus and statement of
additional information, in satisfaction of requests for repurchase or
redemption; or
(o) 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 a Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all income and
other payments to which the Fund is entitled either by law or pursuant
to custom in the securities business;
(b) Present for payment and, subject to Section 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 Fund, checks, drafts and
other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or regulations
of any other taxing authority now or hereafter in effect, and prepare
and 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 Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all
rights and similar securities issued with respect to Securities of the
Fund; and
(g) In general, and except as otherwise directed in Proper Instructions or
as directed by the Board of Trustees, attend to all non-discretionary
details in connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of the Fund.
3.9 Registration and Transfer of Securities. All Securities held for a
Fund that are issued or issuable only in bearer form shall be held by
the Custodian in that form, provided that any such Securities shall be
held in a Book-Entry System if eligible therefor. All other Securities
held for a Fund may be registered in the name of the Fund, 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
Fund.
3.10 Records.
(a) The Custodian shall maintain, for each Fund, complete and accurate
records with respect to Securities, cash or other property held for
such Fund, including (i) journals or other records of original entry
containing an itemized daily record in detail of all receipts and
deliveries of Securities and all receipts and disbursements of cash;
(ii) ledgers (or other records) reflecting (A) Securities in transfer,
(B) Securities in physical possession, (C) monies and Securities
borrowed and monies and Securities loaned (together with a record of
the collateral therefor and substitutions of such collateral), (D)
dividends and interest received, and (E) dividends receivable and
interest receivable; and (iii) canceled checks and bank records
related thereto. The Custodian shall keep such other books and records
of each Fund as the Trust shall reasonably request, or as may be
required by the 1940 Act, including, but not limited to, Section 31 of
the 1940 Act and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with
rules and regulations of the SEC, (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 SEC, 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 or as may reasonably be requested, the Custodian shall
furnish the Trust with a detailed statement of the Securities and
moneys held by the Custodian and the Sub-Custodians for each Fund
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 a Fund,
to be promptly executed by the registered holder of such Securities,
without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such Securities.
3.14 Information on Corporate Actions. The Custodian shall promptly deliver
to the Trust all information received by the Custodian pertaining to
Securities being held by a Fund with respect to optional tender or
exchange offers, calls for redemption or purchase, or expiration of
rights as described in the Standards of Service Guide attached as
Exhibit B. If the Trust desires to take action with respect to any
tender offer, exchange offer or other similar transaction, the Trust
shall notify the Custodian at least five Business Days prior to the
date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant
information for any Security which has unique put/option provisions at
least five Business Days prior to the beginning date of the tender
period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF A FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities for
a Fund, 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 Fund
pay out of the moneys held for the account of the Fund the total
amount specified in such Written Instructions to the person named
therein. The Custodian shall not be under any obligation to pay out
moneys to cover the cost of a purchase of Securities for the Fund, if
in the Fund Custody Account there is insufficient cash available to
the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for the purchase of Securities for
a Fund 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 Fund 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 a Fund,
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 Fund as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in
such Written Instructions and provide timely notice to the Fund and
the transfer agent of any receipt by it of payments for shares of such
Fund. Subject to the foregoing, the Custodian may accept payment in
such form as mutually agreed upon from time to time by the Trust and
the Custodian, 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, upon receipt of
Proper Instructions to deliver Securities against payment, shall be
entitled, if in accordance with generally accepted market practice, to
deliver such Securities prior to actual receipt of final payment
therefor. In any such case, the Fund shall bear the risk that final
payment for such Securities may not be made or that such Securities
may be returned or otherwise held or disposed of by or through the
person to whom they were delivered, and absent any bad faith,
negligence or willful misconduct, 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 a Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against
payment, (ii) proceeds from the redemption of Securities or other
assets of the Fund, and (iii) income from cash, Securities or other
assets of the Fund. Any such credit shall be conditional upon actual
receipt by Custodian of final payment and may be reversed if final
payment is not actually received in full. The Custodian may, in its
sole discretion and from time to time, permit the Fund to use funds so
credited to the Fund Custody Account in anticipation of actual receipt
of final payment. Any such funds shall be repayable immediately upon
demand made by the Custodian at any time prior to the actual receipt
of all final payments in anticipation of which funds were credited to
the Fund Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to
facilitate the settlement of a Fund's transactions in such Fund's
Custody Account. Any such advance shall be repayable immediately upon
demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the purpose
in the relevant Fund Custody Account, and upon receipt of Proper
Instructions specifying that the funds are required to redeem Shares
of a Fund, 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 each Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the 1934 Act and a
member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Trust and of any registered national
securities exchange (or the Commodity Futures Trading Commission or
any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Fund,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased, sold or written by a Fund or in
connection with financial futures contracts (or options thereon)
purchased or sold by a Fund,
(c) which constitute collateral for loans of Securities made by the Fund,
(d) for purposes of compliance by a Fund 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 one Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the exercise of good
faith and reasonable care in carrying out its obligations under this
Agreement, and shall be without liability to the Trust or any Fund 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 Fund is in compliance
with 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 a Fund or any
money represented by a check, draft or other instrument for the
payment of money, until the Custodian or its agents actually receive
such cash or collect on such instrument.
7.3 No Responsibility for Title, etc. So long as and to the extent that it
is in the exercise of good faith and 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 a Fund 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 and reasonably
believed to be genuine 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 each Fund and/or compute the value of the
assets of each Fund. The Custodian shall take all such reasonable
actions as the Trust may from time to time request to enable the Trust
to obtain, from year to year, favorable opinions from the Trust's
independent accountants with respect to the Custodian's activities
hereunder in connection with (a) the preparation of the Trust's
reports on Form N-1A and Form N-SAR and any other reports required by
the SEC, and (b) the fulfillment by the Trust of any other
requirements of the SEC.
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, its officers, Trustees and agents 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 a Fund for
any purpose, either at the Trust's request or as otherwise
contemplated in this Agreement, or in the event that the Custodian or
its nominee incurs, in connection with its performance under this
Agreement, any 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 a Fund shall be security therefor, and should the Fund fail
promptly to repay or indemnify the Custodian, the Custodian shall be
entitled to utilize available cash of such Fund and to dispose of
other assets of such Fund to the extent necessary to obtain
reimbursement or indemnification.
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 a Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
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
each Fund 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 each Fund at the successor custodian,
provided that the Trust shall have paid to the Custodian all fees,
expenses and other amounts to the payment or reimbursement of which it
shall then be entitled. 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. Additionally, the Trust may remove certain Funds as
parties to this Agreement upon such Funds' conversion to a feeder fund
in a master/feeder fund structure; and the Custodian hereby waives the
sixty (60) day notice requirement pursuant to this Section; however,
the Trust shall provide reasonable notice of the anticipated
conversion date. All representations in Section 14.9 of this Agreement
shall survive the termination of this Agreement.
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 Trust 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 each Fund at such
bank or trust company all Securities of the Fund held in a Book-Entry
System or Securities Depository. Upon such delivery and transfer, such
bank or trust company shall be the successor custodian under this
Agreement and the Custodian shall be relieved of all obligations under
this Agreement.
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 each Fund are set forth in Exhibit D 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. 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.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions, and
other communications to be given hereunder shall be in writing and shall be sent
or delivered to the recipient at the address set forth after its name
hereinbelow:
To the Trust:
CCM Advisors Funds
000 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
To Custodian:
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. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
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 a Fund and
such other printed matter as merely identifies Custodian as custodian
for a Fund. The Trust shall submit printed matter requiring approval
to Custodian in draft form, allowing sufficient time for review by
Custodian and its counsel prior to any deadline for printing.
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.
14.9 Confidentiality. Neither the Custodian nor the Trust shall disclose or
use nonpublic personal information (as defined by Rule 3(t) of
Regulation S-P under the federal securities laws) provided by the
other party, except as necessary to carry out the purposes for which
such information is provided, including information that is used in
accordance with Rules 14 and 15 of Regulation S-P in the ordinary
course of business.
14.10Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supercedes any prior agreement with
respect to the subject matter hereof, whether oral or written.
14.11Additional Funds. In the event the Trust establishes additional
series or classes of shares than those listed on the attached Exhibit
C, and the Trust desires to have Custodian act as custodian to such
series or class under the terms hereof, the Trust shall so notify
Custodian in writing and if Custodian agrees in writing to provide
such services, such series or class shall be covered by this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: CCM ADVISORS FUNDS
/s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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ATTEST: FIRSTAR BANK, N.A.
______________________________ By: /s/ Xxx Xxxxxxx
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