CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of October, 2002
("Agreement"), by and between Brazos Mutual Funds, a Delaware business trust
(the "Trust"), and U.S. Bank National Association, 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 U.S. Bank National Association to act
as Custodian for each series of the Trust listed on Exhibit C hereto (as amended
from time to time) (each a "Fund", collectively the "Funds");
WHEREAS, the Trust desires that the Funds' 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
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DEFINITIONS
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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 each 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 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.
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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 each 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, any Assistant Treasurer or Chief Financial Officer 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
Fund) 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.
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1.12 "SHARES" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Trust on account of the 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 the Funds 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 Funds will be adequately protected against
the risk of loss of assets held in accordance with such contract;
(ii) that the Funds' 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 Funds' 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 Fund or as being held by a
third party for the benefit of a Fund; (v) that the Funds'
independent public accountants will be given access to those records
or confirmation of the contents of those records; and (vi) that a
Fund will receive periodic reports with respect to the safekeeping of
the Funds' assets, including, but not limited to, notification of any
transfer to or from a Fund's account or a third party account
containing assets held for the benefit of a 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 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.
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ARTICLE II
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APPOINTMENT OF CUSTODIAN
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2.1 APPOINTMENT. The Trust hereby appoints the Custodian as custodian of
all Securities and cash owned by or in the possession of the Funds 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 Funds; 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 Funds.
ARTICLE III
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CUSTODY OF CASH AND SECURITIES
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3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of the Fund (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 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, in which the Custodian shall enter and carry
all Securities, cash and other assets of such Fund 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 Funds and to
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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 Funds
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 Funds, 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 Funds with a particular
Sub-Custodian and of any material changes in the Funds'
arrangements. The Custodian shall promptly take such steps as may
be required to withdraw assets of a Fund 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 Funds. The
Custodian further warrants that a Funds' 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 a Securities Depository, the Securities Depository's
operating history and number of participants; and (iv) whether a
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.
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(f) The Custodian shall establish a system to monitor the
appropriateness of maintaining the Funds' assets with a
particular Sub-Custodian and the contract governing the Funds'
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 Funds' Securities, cash and
other assets, including (a) all payments of income, payments of
principal and capital distributions received by a Fund with respect
to such Securities, cash or other assets owned by a Fund at any time
during the period of this Agreement, and (b) all cash received by a
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, 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 the 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 the 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
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records of the Custodian to reflect such transfer and payment for
the account of 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
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 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 Fund arising from the use of such Book-Entry System
or Securities Depository, if and to the extent that the 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
the 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 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;
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(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 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 the 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 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 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 a 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
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Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of a 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 a 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 a 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 a
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, 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 a Fund;
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(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 a Fund; 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 a Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all
income and other payments to which a 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 a 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 a 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, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of a 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
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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 a
Fund.
3.10 RECORDS.
(a) The Custodian shall maintain, for a Fund, complete and accurate
records with respect to Securities, cash or other property held
for the 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
a 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 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 1940
Act.
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 a 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
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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 and
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
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PURCHASE AND SALE OF INVESTMENTS OF THE FUND
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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 a 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 a 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
12
(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 a Fund 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, a 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 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 a 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 a 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 the Fund
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
13
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 a 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 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 a Fund,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by a Fund or in
connection with financial futures contracts (or options thereon)
purchased or sold by the Fund,
(c) which constitute collateral for loans of Securities made by a
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 a Fund only. All Proper Instructions relating to
a segregated account shall specify a Fund.
14
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 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, provided that, the Custodian promptly notifies the Trust in
writing 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 a Fund 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 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 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 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
7.7 Agreement, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
7.8 CO-OPERATION. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust to keep
15
the books of account of a Fund and/or compute the value of the assets
of a 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 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, or any breach of any provision of this Agreement
by the Custodian or any 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.
16
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 the 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 a
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 the 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
17
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 a 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 the 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 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. The Custodian agrees that if
obligations or liability relates to one or more Funds, the obligations or
liability hereunder shall be limited to the respective assets of such Funds.
18
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:
Brazos Mutual Funds
Xx. Xxx Xxxxxxxxxxxx
0000 Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, XX 00000
and notice to the Custodian shall be sent to:
.S. Bank National Association
00 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
xxxxxxxxx, Xxxx 00000
ttention: Mutual Fund Custody Services
elephone: (513) 632-_____
acsimile: (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. 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. The prospectus or statement of additional information
for a Fund and such other printed matter (including, if applicable, a
Fund's annual and semi-annual shareholder report) may identify the
Custodian as custodian for the Fund without prior written approval of
the Custodian.
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
19
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 SURVIVAL. Sections 3.10, 4.2, 7.1 and Articles VIII, XI and XII shall
survive termination 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.
U.S. BANK NATIONAL ASSOCIATION BRAZOS MUTUAL FUNDS
By: /s/ Xxx Xxxxxxx By: /s/ Xxx X. Xxxxxxxxxxxx
---------------------------- -------------------------------
Title: Senior Vice President Title:President
------------------------- -----------------------------
20
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
------------------ -------------------
President: ___________________
Secretary: ___________________
Treasurer: ___________________
Vice President: ___________________
Adviser Employees: ___________________
___________________
Transfer Agent/Fund Accountant
Employees: ___________________
___________________
___________________
___________________
___________________
21
EXHIBIT B
---------
U.S. BANK NATIONAL ASSOCIATION
STANDARDS OF SERVICE GUIDE
U.S. Bank National Association is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for U.S. Bank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, U.S. Bank will make every effort to complete
all processing on a timely basis.
U.S. Bank is a direct participant of the Depository Trust Company, a direct
member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers Trust
Company as its agent for ineligible and foreign securities.
For corporate reorganizations, U.S. Bank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, and the Wall Street
Journal.
For bond calls and mandatory puts, U.S. Bank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, and DTC Important
Notices. U.S. Bank will not notify clients of optional put opportunities.
Any securities delivered free to U.S. Bank or its agents must be received
three (3) business days prior to any payment or settlement in order for the U.S.
Bank standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
THE INFORMATION CONTAINED IN THIS STANDARDS OF SERVICE
GUIDE IS SUBJECT TO CHANGE. SHOULD ANY CHANGES BE MADE
U.S. BANK WILL PROVIDE YOU WITH AN UPDATED COPY OF ITS
STANDARDS OF SERVICE GUIDE.
22
U.S. BANK SECURITY SETTLEMENT STANDARDS
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
DTC 1:30 P.M. on Settlement Date DTC Participant #0000
Xxxxx Xxxx XX 00000
Institutional #________________
For Account #____________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cinti/Trust
for U.S. Bank National Association
ABA# 000000000
Fed Wireable FNMA & FHLMC 12:30 P.M. on Settlement Date For Account #_____________
Bk of NYC/Cust
ABA 000000000
A/C U.S. Bank # 117612
For Account #____________
Federal Reserve Book Entry 1:00 P.M. on Settlement Date Federal Reserve Bank of Cinti/Spec
(Repurchase Agreement for U.S. Bank National Association
Collateral Only) ABA# 000000000
For Account #_____________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BYORK
(GNMA Book Entry) U.S. Bank / 117612
Physical Securities 9:30 A.M. EST on Settlement Date Bank of New York
(for Deliveries, by 4:00 P.M. on One Wall Street-3rd Floor - Window A
Settlement Date minus 1) Xxx Xxxx, XX 00000
For account of U.S. Bank / Cust #117612
Attn: Xxxxxx Xxxxxx
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Date Cedel a/c 55021
minus 2 FFC: a/c 387000
U.S. Bank / Global Omnibus
Cash Wire Transfer 3:00 P.M. U.S. Bank National Association
Cinti/Trust ABA# 000000000
Credit Account #0000000
Further Credit to ___________
Account # _______________
* All times listed are Eastern Standard Time.
23
U.S. BANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Payable Date Payable Date
Certificates*
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date fa lls on a weekend or bank holiday, payment
will be made on the immediately following business day.
24
U.S. BANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT TRANSACTION
INSTRUCTIONS TO U.S. POSTING
BANK
Rights, Warrants, Later of 10 business days 5 business days prior to Upon receipt
and Optional Mergers prior to expiration or expiration
receipt of notice
Mandatory Puts with Later of 10 business days 5 business days prior to Upon receipt
Option to Retain prior to expiration or expiration
receipt of notice
Class Actions 10 business days prior to 5 business days prior to Upon receipt
expiration date expiration
Voluntary Tenders, Later of 10 business days 5 business days prior to Upon receipt
Exchanges, prior to expiration or expiration
and Conversions receipt of notice
Mandatory Puts, At posting of funds or None Upon receipt
Defaults, Liquidations, securities received
Bankruptcies, Stock
Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days None Upon receipt
prior to expiration or
receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above
will be sold.
25
EXHIBIT C
---------
FUND NAMES
SEPARATE SERIES OF BRAZOS MUTUAL FUNDS
Name of Series Date Added
-------------- ----------
Brazos Micro Cap Portfolio 10/1/02
Brazos Small Cap Portfolio 10/1/02
Brazos Mid Cap Portfolio 10/1/02
Brazos Real Estate Securities Portfolio 10/1/02
Brazos Multi Cap Portfolio 10/1/02
26
EXHIBIT D
---------
TO THE
CUSTODY AGREEMENT
FEE SCHEDULE
--------------------------------------------------------------------------------
Annual fee based upon market value per fund:
--------------------------------------------
1 basis point
Minimum annual fee per fund - $4,800
Portfolio Transaction Fees
--------------------------
$ 5.00 per disbursement (waived if U.S. Bancorp is Administrator)
$ 7.00 per repurchase agreement transaction
$ 9.00 per book entry security (depository or Federal Reserve system)
$25.00 per portfolio transaction processed through our New York custodian
definitive security (physical)
$ 9.00 per GNMA Amortized security purchase
$ 8.00 per GNMA principal/interest paydown, GNMA sales
$15.00 per option/future contract written, exercised or expired
$50.00 per Cedel/Euroclear transaction
$15.00 per mutual fund trade
$15.00 per Fed Wire or withdrawal
$10.00 per margin variation
$ 6.00 per short sale
$ 6.00 per paydown transaction
A transaction is a purchase/sale of a security, free receipt/free delivery,
maturity, tender or exchange.
No charge for the initial conversion free receipt.
Overdrafts - charged to the account at prime interest rate.
Plus out-of-pocket expenses, and extraordinary expenses based upon complexity,
including items such as shipping fees or transfer fees.
Fees are billed monthly.
--------------------------------------------------------------------------------
27
