CUSTODY AGREEMENT
This Custody Agreement (the "Agreement"), executed this 3rd day of February,
2003, by and between National City Bank, a national banking association
organized and existing under the laws of the United States of America (the
"Custodian") and The Advisors Inner Circle Fund, a Masschusetts business trust,
(the "Fund");
WITNESSETH:
The Custodian shall establish and maintain a custody account (the "Account") for
and in the name of the Fund and hold therein all securities deposited with or
collected by the Custodian acting as custodian for the Account. The terms
"Security" or "Securities" shall mean any negotiable or non-negotiable
investment instrument(s) commonly known as a security or securities in banking
custom or practice, and so long as held by the Custodian, all income therefrom
and all cash deposited by, or for the account of, the Fund. The Custodian agrees
to open the Account and hold all Securities and other property, from time to
time, deposited with or collected by the Custodian for the Account, subject to
the terms and conditions of this Agreement, as the same may be amended from time
to time.
SECTION 1. ACCEPTANCE OF SECURITIES
(a) The Custodian shall accept delivery from and on behalf of the Fund of such
Securities as shall, from time to time, be acceptable to it. Any Securities now
held by the Custodian for the Fund under a prior custody agreement shall be
deemed to have been deposited hereunder. Custodian may hold any Securities
delivered hereunder through any affiliate of the Custodian, provided that the
Custodian shall have the same resposibilities and liabilities for Securities
held for the account of the Fund at an affiliate of the Custodian as it would if
it held the Securities directly.
(b) The Custodian shall supply to the Fund from time to time as mutually agreed
a written statement with respect to all of the Securities held in the Account
established hereby. In the event that the Fund does not inform the Custodian in
writing of any exceptions or objections within a reasonable time after receipt
of such statement, the Fund shall be deemed to have approved such statement.
(c) The Custodian shall segregate and identify on its books and records as
belonging to the Fund all Securities delivered by or for the account of the Fund
which are held by the Custodian.
(d) The Fund authorizes the Custodian, for any Securities held hereunder, to use
the services of any United States central securities depository it deems
appropriate and where it may hold any of its own Securities, including, but not
limited to, the Depository Trust Company and the Federal Reserve Book Entry
System. The term "central securities depository" shall also include any
depository service which acts as a custodian of securities in connection with a
system for the central handling of securities whereby all securities of a
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred by bookkeeping entry without physical
delivery of security certificates. Placement by the Custodian of Securities into
a central securities depository or safekeeping facility shall neither augment
nor diminish the Custodian's duties or obligations under any other paragraph of
this Agreement, provided that the Custodian shall have no liability for the acts
or failure to act of any such central securities depository.
(e) The Custodian is authorized to re-register the Securities in the name of the
Custodian or its nominee unless alternative and acceptable registration
instructions are furnished by the Fund.
SECTION 2. STANDARD OF CARE
The Custodian shall exercise due care in receiving, holding and handling the
Securities and will give to such Securities the same care and safeguards as are
afforded similar property owned by the Custodian. The Custodian will exercise
the due care expected of a professional custodian for hire with respect to the
Securities in its possession or control.
SECTION 3. FUND DUTIES
The Fund shall provide the Custodian with a written certificate containing the
specimen signatures of each person authorized to act and give direction on
behalf of the Fund ("Authorized Representative") and signed by the President or
any Vice President of the Fund. The Custodian shall be entitled to rely upon
such certificate until notified otherwise by the Fund in writing.
The Custodian is further authorized to rely upon any written instructions or
instructions received by any other means and identified as having been given or
authorized by any person named to the Custodian as authorized to give written
instructions, regardless of whether such instructions shall in fact have been
authorized or given by any of such persons, provided that the Custodian and the
Fund shall have agreed in writing upon the means of transmission and the method
of identification for such instructions. Instructions received by any other
means shall include verbal instructions, provided that any verbal instruction
shall be promptly confirmed in writing. In the event verbal instructions are not
subsequently confirmed in writing, as provided above, the Fund agrees to hold
the Custodian harmless and without liability for any claims or losses in
connection with such verbal instructions. Notwithstanding the above,
instructions for the withdrawal of securities "free of payment" shall be given
only in writing, manually signed by any two such authorized persons.
The Fund may appoint one or more investment managers ("Investment Managers")
with respect to the Account. The Custodian is authorized to act upon
instructions received from any Investment Manager to the same extent that the
Custodian would act upon the instructions of the Fund, provided that the
Custodian has received copies of the instruments appointing the Investment
Manager and written confirmation from the Investment Manger evidencing its
acceptance of such appointment, or other evidence satisfactory to Custodian.
If the Fund should choose to have telecommunication or other means of direct
access to the Custodian's reporting system for Securities in the Account,
pursuant to paragraph (e) of Section 4, the Custodian is also authorized to rely
and act upon any instructions received by it through a terminal device, provided
that such instructions are accompanied by code words which the Custodian has
furnished to the Fund, or its personnel by any method mutually agreed to by the
Custodian and the Fund, and which the Custodian shall not have then been
notified by the Fund or any such delegate to cease to recognize regardless
whether such instructions shall in fact have been given or authorized by the
Fund or any such person. The Fund's delegates shall be named by a certificate
provided to the Custodian from time to time by the Fund.
In the event that the Custodian shall receive conflicting instructions from Fund
regarding any particular transaction, Custodian shall have no duty to attempt to
resolve such conflict. Custodian shall rely upon the instruction first received
by Custodian and Custodian is hereby held harmless from all consequences of such
reliance.
SECTION 4. CUSTODIAN DUTIES
(a) The Custodian shall receive or deliver, or shall instruct any other entity
authorized to hold Securities hereunder to receive or deliver, Securities and
credit or debit the Fund's Account, in accordance with properly authorized
instructions from the Fund. The Custodian or such entity shall also receive in
custody all stock dividends, rights and similar securities issued in connection
with Securities held hereunder, shall surrender for payment, in a timely manner,
all items maturing or called for redemption and shall take such other action as
the Fund may direct in properly authorized instructions.
(b) The Fund may from time to time place orders with the Custodian to buy or
sell Securities. The Custodian or any entity authorized to hold Securities in
accordance with Sections 1 or 5 hereof may refer each such order to any broker
or sub-agent of its choice, including any affiliate of the Custodian, unless
otherwise specified, and shall have no liability or responsibility whatsoever
for any error, neglect or default of any such broker or sub-agent or for
mutilations, interruptions, omissions, errors or delays occurring in the mails,
electronic communications, or on the part of any telegraph, cable or wireless
company, or any employee of such company, or by reason of any cause beyond its
control. In placing such orders, the Fund may from time to time place special
orders with the Custodian, and the Custodian will, as agent of the Fund,
undertake the purchase or sale of the Securities as set out above, provided that
if the order is for the purchase or sale of obligations of the United States
Government or its agencies, or municipal bonds, the Custodian may act as
principal. The Fund hereby agrees, with respect to all purchases, that
immediately available funds for settlement will be on deposit by settlement
date. Further, the Fund agrees to provide specific instructions regarding the
deposit or delivery of all such Securities to the Custody Account.
(c) All cash received or held by the Custodian acting as custodian or by any
entity authorized to hold the Securities hereunder as interest, dividends,
proceeds from transfer, and other payments for or with respect to the Securities
shall be (i) held in a cash account, or (ii) in accordance with properly
authorized instructions received by the Custodian, remitted to the Fund.
(d) If the Custodian has in place a system for providing telecommunication or
other electronic access or other means of direct access by customers to the
Custodian's reporting system for Securities in the Custody Account, then upon
separate agreement between Custodian and Fund, the Custodian shall provide such
service to the Fund.
(e) During the Custodian's regular banking hours and upon receipt of reasonable
notice from the Fund, any officer or employee of the Fund, any independent
accountant(s) selected by the Fund and any person designated by any regulatory
authority having jurisdiction over the Fund shall be entitled to examine on the
Custodian's premises, the Securities held by the Custodian on its premises, but
only upon the Fund's furnishing the Custodian with properly authorized
instructions to that effect, provided, such examination shall be consistent with
the Custodian's obligations of confidentiality to other parties. The Custodian's
costs and expenses in facilitating such examinations, including but not limited
to the cost to the Custodian of providing personnel in connection with
examinations shall be borne by the Fund, provided that such costs and expenses
shall not be deemed to include the Custodian's costs in providing to the Fund
(i) the "single audit report" of the independent certified public accountants
engaged by the Custodian, and (ii) such reports and documents as the Agreement
contemplates that the Custodian shall furnish routinely to the Fund.
The Custodian shall also, subject to restrictions under applicable law, seek to
obtain from any entity with which the Custodian maintains the physical
possession of any of the Securities in the Custody Account such records of such
entity relating to the Custody Account as may be required by the Fund or its
agents in connection with an internal examination by the Fund of its own
affairs. Upon a reasonable request from the Fund, the Custodian shall use its
best efforts to furnish to the Fund such reports (or portions thereof) of the
external auditors of each such entity as related directly to such entity's
system of internal accounting controls applicable to its duties under its
agreement with the Custodian.
(f) The Custodian shall upon request supply to the Fund from time to time,
written operational procedures which shall govern the day to day operations of
the account. Such operating procedures are hereby incorporated herein by
reference.
(g) The Custodian will transmit to the Fund upon receipt, all financial reports,
stockholder communications, notices, proxies and proxy soliciting materials
received from issuers of the Securities, and all information relating to
exchange or tender offers received from offerors with respect to the Securities.
Proxies will be executed by the registered holder if the registered holder is
other than the Fund, but the manner in which the Securities are to be voted will
not be indicated. Specific instructions regarding proxies will be provided when
necessary. The Custodian shall not vote any of the Securities or authorize the
voting of any Securities or give any consent or take any other action with
respect hereto, except as provided herein.
The Custodian is authorized to accept and open in the Fund's behalf all mail or
communications received by it or directed in its care.
(h) In the event of tender offers, the Fund shall mail or telefax instructions
to the Custodian as to the action to be taken with respect thereto or telephone
such instructions to its National City Bank account administrator at the
Custodian, designating such instruction as being related to a tender offer. The
Fund shall deliver to the Custodian, by 4:00 p.m., Cleveland, Ohio time on the
following calendar day, written confirmation, including telefax, provided such
telefax is on the letterhead of the Fund and signed by an authorized person, of
telephonic instructions. The Fund shall hold the Custodian harmless from any
adverse consequences of the Fund's use of any other method of transmitting
instructions relating to a tender offer.
The Fund agrees that if it gives an instruction for the performance of an act on
the last permissible date of a period established by the tender offer or for the
performance of such act or that if it fails to provide next day written
confirmation of an oral instruction, the Fund shall hold the Custodian harmless
form any adverse consequences of failing to follow said instructions.
(i) The Custodian shall promptly notify the Fund of any calls for redemption,
mergers, tenders, consolidations, reorganizations, recapitalizations, or similar
proceedings affecting domestic Securities (other than those Securities
registered in the Fund's name) held in the Account, provided notice of such
proceedings appears in standard New York financial publications or a service to
which the Custodian subscribes. The Custodian shall not be liable for late
presentation of such items when the Fund has failed to timely instruct the
Custodian in writing. Should any Security held in a central securities
depository be called for a partial redemption by the issuer of such Security,
the Custodian is authorized, in its sole discretion, to allot the called portion
to the respective holders in any manner it deems fair and equitable.
(j) The Custodian shall present all maturing bonds and coupons for collection
and is authorized to receive payment of income and principal on other items in
accordance with their terms. All funds so collected shall be credited to the
Account or remitted in accordance with the instructions of the Fund.
SECTION 5. FOREIGN SECURITIES
(a) The Custodian shall not hold Securities which are issued by foreign
governments or foreign companies or which principal trading market is located
outside the United States ("Foreign Securities") hereunder.
SECTION 6. FEES AND EXPENSES
(a) The Fund agrees to promptly pay upon receipt of an invoice from Custodian
the fees and expenses set forth therein. Fees and expenses for the services to
be rendered under this Agreement shall be as set forth in Exhibit A attached
hereto, as such may be amended from time to time, effective upon 90 days prior
written notice of Custodian to the Fund. In addition, if the Custodian advances
securities to the Fund for any purpose or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of its duties
hereunder, except such as may rise for its or its nominee's negligent action,
negligent failure to act, or willful misconduct, Fund shall immediately
reimburse the Custodian, or its nominee, for such advances, taxes, charges,
expenses, assessments, claims or liabilities, or replace such securities.
(b) The Custodian may, in its sole discretion, advance funds on behalf of the
Fund which results in an overdraft because the monies held in the Account are
insufficient to pay the total amount payable upon purchase of Securities as
instructed. Any such overdrafts shall be deemed to be a loan made by the
Custodian to the Fund payable promptly upon demand and bearing interest at
National City Bank's prime rate plus two percent per annum from the date
incurred. Custodian shall have no obligation to advance funds on behalf of Fund.
(c) The Custodian shall have a lien on the Securities in the Custody Account to
secure payment of such fees and expenses, taxes, advances and other charges
incurred under this Section. The Fund agrees that the Custodian's lien shall be
a continuing lien and security interest in and on any Securities at any time
held by or through it in accordance with this Agreement, for the benefit of the
Fund or in which the Depositor may have an interest which is then in the
Custodian's possession or control or in possession or control of any third party
acting on the Custodian's behalf including, but not limited to, Securities
purchased by Custodian for the Fund hereunder and the proceeds thereof. Upon
failure by the Fund to cure any overdraft amounts, or to reimburse the Custodian
promptly after the request for payment, the Custodian may immediately and
without further notice dispose of Securities to the extent necessary to obtain
reimbursement. The Custodian shall have all of the rights and remedies of a
secured creditor under the Uniform Commercial Code, as in effect in the State
from time to time with respect to the Securities.
SECTION 7. INVESTMENT RESPONSIBILITY
The Custodian is under no duty to (i) advise the Fund relative to the
investment, purchase, retention, sale, or other disposition of any Securities
held hereunder; (ii) supervise the Fund's investments, purchases or sales; (iii)
invest, or see to the investment of, any cash proceeds or other cash deposited
hereunder and held by Custodian; or (iv) determine whether any investment or
sale made for the account of Fund, except for those made by the Custodian
pursuant to Section 4(b) hereof, is made in conformity with Fund's
understandings. The Custodian's duties hereunder are strictly ministerial in
nature and are limited to those duties expressly set forth in this Agreement.
Nothing in this Agreement shall be construed to impose fiduciary
responsibilities on the Custodian.
SECTION 8. CUSTODIAN POWER OF ATTORNEY
The Custodian is authorized and empowered in the name of and on behalf of the
Fund to execute any certificates of ownership or other instruments which are or
may hereafter be required by any regulations of the United States or any state
or political subdivision thereof, so that the Custodian may fulfill its
obligations hereunder as required in connection with any Securities.
SECTION 9. AMENDMENTS
Except as otherwise provided hereby, the parties may make amendments to the
Agreement from time to time, provided that any such amendment shall be reduced
to writing and shall be executed as an addendum to this Agreement in the same
manner as this Agreement has been executed.
SECTION 10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the benefit of the
successors and assigns of the respective parties hereto.
SECTION 11. COMPLETENESS OF AGREEMENT
This Agreement along with a copy of the fee schedule constitutes the full and
complete agreement between the Custodian and Fund, and no other understanding or
agreement, whether written or oral shall bind either of the parties hereto. The
headings of Sections of this Agreement are for convenience only and have no
effect on a party's responsibilities or liabilities.
SECTION 12. GOVERNING LAWS
This Agreement shall be governed by the applicable laws of the State of Ohio
(the "State").
SECTION 13. TERMINATION
This Agreement may be terminated by either the Fund or the Custodian upon at
least ninety (90) days prior written notice to the other. The Fund shall have a
period of thirty (30) days from the date of the last and final accounting
provided by the Custodian to make any objection or claim, and failure to do so
within the thirty (30) day period shall be deemed by the parties hereto to
constitute accord and satisfaction. As soon as practicable following termination
of this agreement, Custodian shall deliver all Securities in accordance with
Fund's written instructions.
SECTION 14. NOTICES
It shall be sufficient service of any notice, request, authorization, complaint,
demand or other paper required under this Agreement to be given or filed with
the Custodian or Fund if the same shall be sent via facsimile (with confirmation
received) and duly mailed by first class mail with postage prepaid addressed as
follows:
(a) If to the Custodian:
National City Bank
Attention: Xxxxx Xxxxxxxx
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Phone number: 000-000-0000
Facsimile number: 000-000-0000
(b) If to the Fund:
The Advisors' Inner Circle Fund
Attention: Xxxx Xxxxxxxxx
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
IN WITNESS WHEREOF, the parties thereto executed this Agreement as of the day
and year first above-written.
TRUST:
The Advisors' Inner Circle Fund
ATTEST: By: /s/ Xxxx Xxxxx
--------------------------------
/s/ Xxxxx X. Xxxxxxx Title: Vice President and Asst. Sec.
---------------------------- -----------------------------
CUSTODIAN:
National City Bank
ATTEST: By: /s/ Xxxx Xxxxxx
--------------------------------
/s/ Xxxxxxx Xxxxx Title: Vice President
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Exhibit A
FEE SCHEDULE
Annual Fee: .0050% basis points of Market Value Billed and Charged Monthly
