CUSTODY AGREEMENT
This AGREEMENT, dated as of October 24 2002, by and between the Valgro
Funds, Inc. (the Corporation), a business corporation organized under the laws
of the State of Illinois, acting for and on behalf of Valgro Fund (the "Fund"),
which is operated and maintained by the Corporation for the benefit of the
holders of shares of the fund(s), and U.S. BANK, N.A., (the "Custodian").
WITNESSETH:
WHEREAS, the Corporation desires that the Fund's Securities and cash be
held and administered by the Custodian pursuant to this Agreement;
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Corporation 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 Directors to give Oral Instructions and Written
Instructions on behalf of the Fund and named in Exhibit A hereto or in such
resolutions of the Board of Directors, certified by an Officer, as may be
received by the Custodian from time to time.
1.2 "Board of Directors" shall mean the Directors from time to time
serving under the Corporation's Articles of Incorporation, 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 Corporation
computes the net asset value of Shares of the Fund. [*]
1.5 "Fund Custody Account" shall mean any of the accounts in the name of
the Corporation, 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 Corporation.
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
Corporation 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 Corporation. If Oral
Instructions vary from the Written Instructions, which purport to confirm them,
the Custodian shall notify the Corporation 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 Directors, 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 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 the Fund, the units of
beneficial interest issued by the Corporation 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 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 the Fund will be adequately
protected against the risk of loss of assets held in accordance with such
contract; (ii) that the 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 the 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 the Fund or as being held by a third party for the
benefit of the Fund; (v) that the Fund's independent public accountants will be
given access to those records or confirmation of the contents of those records;
and (vi) that the Fund will receive periodic reports with respect to the
safekeeping of the Fund's 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 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 Directors, a copy of which, certified
by an Officer, shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Corporation hereby constitutes and appoints the
Custodian as custodian of all Securities and cash owned by or in the possession
of the 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
this Agreement to the Custodian by the Corporation:
a. A copy of the Articles of Incorporation certified by the Secretary;
b. A copy of the By-Laws of the Corporation certified by the Secretary;
c. A copy of the resolution of the Board of Directors of the Corporation
appointing the Custodian, certified by the Secretary;
d. A copy of the then current Prospectus of the Fund; and
e. A certification of the President and Secretary of the Corporation
setting forth the names and signatures of the current Officers of the
Corporation and other Authorized Persons.
2.4 Notice of Appointment of Dividend and Transfer Agent. The Corporation
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent of the 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 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 and
shall be identified as subject to this Agreement.
3.2 Fund Custody Accounts. As to the Fund, the Custodian shall open and
maintain in its Trust department a custody account in the name of the
Corporation coupled with the name of the 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 Fund and to carry out such other provisions of this
Agreement as it may determine, provided, however, that the appointment of any
such agents and maintenance of any Securities and cash of the Fund 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
Directors in connection with this Agreement, the Custodian wishes to appoint
other Sub-Custodians to hold property of the Fund, it will so notify the
Corporation 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
Corporation shall at the meeting of the Board of Directors 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 Directors of the placement of the
Securities and cash of the Fund with a particular Sub-Custodian and of any
material changes in the Fund's arrangements. The Custodian shall promptly take
such steps as may be required to withdraw assets of the 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 Corporation that it agrees to exercise
reasonable care, prudence, and diligence such as a person having responsibility
for the safekeeping of property of the Fund. The Custodian further warrants
that the 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 a
Securities Depository, the 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.
(f) The Custodian shall establish a system to monitor the appropriateness
of maintaining the Fund's assets with a particular Sub-Custodian and the
contract governing the Fund's arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Corporation shall deliver, or
cause to be delivered, to the Custodian all of the Fund's Securities, cash and
other assets, including (a) all payments of income, payments of principal and
capital distributions received by the Fund with respect to such Securities,
cash or other assets owned by the Fund at any time during the period of this
Agreement, and (b) all cash received by the 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 the Fund in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Fund in any Securities
Depository or Book-Entry System, the Corporation shall deliver to the Custodian
a resolution of the Board of Directors, certified by an Officer, authorizing
and instructing the Custodian on an on-going basis to deposit in such
Securities Depository or Book-Entry System all Securities eligible for deposit
therein and to make use of such Securities Depository or Book-Entry System to
the extent possible and practical in connection with its performance hereunder,
including, without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns of
collateral consisting of Securities.
(b) Securities of the 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 the 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 the 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 the 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.
(e) The Custodian shall provide the Corporation with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities Depository in
which Securities of the 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 Corporation for any loss or damage to the 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 the Custodian or
any Sub-Custodian appointed pursuant to Section 3.3 above or any of its or
their employees, or (ii) from failure of the 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 Corporation
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 the Fund Custody
Account but only in the following cases:
(a) For the purchase of Securities for the 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
Corporation and a bank which is a member of the Federal Reserve System or
between the Corporation 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;
(c) For the payment of any dividends or capital gain distributions
declared by the 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 the 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, Corporation 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 Corporation, the Custodian and a broker-dealer registered under the 1934
Act and a member of the NASD, relating to compliance with rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Fund;
(g) For transfer in accordance with the provision of any agreement among
the Corporation, 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;
(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 Directors,
certified by an Officer, specifying the amount and purpose of such payment,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from
the Fund Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of the 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 of 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 Corporation shall have
specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Corporation, 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 Corporation;
(l) For delivery in accordance with the provisions of any agreement among
the Corporation, the Custodian and a broker-dealer registered under the 1934
Act and a member of the NASD, relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any agreement among
the Corporation, 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; 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
Directors, 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 Corporation, the Custodian shall with respect to all
Securities held for the 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 Corporation 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,
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 the
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 the Fund
may be registered in the name of such 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 Corporation 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 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 the Fund as the
Corporation 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 Corporation and
in compliance with rules and regulations of the Securities and Exchange
Commission, (ii) be the property of the Corporation 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 Corporation
and employees or agents of the Securities and Exchange Commission, and (iii) if
required to be maintained by Rule 31a-1 under the 1940 Act, be preserved for
the periods prescribed in Rule 31a-2 under the 0000 Xxx.
3.11 Fund Reports by Custodian. The Custodian shall furnish the
Corporation 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
Corporation with a detailed statement of the Securities and moneys held by the
Custodian and the Sub-Custodians for the Fund under this Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide the
Corporation with such reports, as the Corporation may reasonably request from
time to time, on the internal accounting controls and procedures for
safeguarding Securities, which are employed by the Custodian or any
Sub-Custodian appointed pursuant to Section 3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the 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 Corporation 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 Corporation all information received by the Custodian and
pertaining to Securities being held by the 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 Corporation desires to take action with respect to any tender offer,
exchange offer or other similar transaction, the Corporation shall notify the
Custodian at least five Business Days prior to the date on which the Custodian
is to take such action. The Corporation will provide or cause to be provided
to the Custodian all relevant information for any Security which has unique
put/option provisions at least five Business Days prior to the beginning date
of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities for
the 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 the
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 the
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. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver Securities
and arrange for payment in accordance with the customs prevailing among dealers
in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or any
other provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. [*] In any such case, the 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 the Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the sale of
Securities which it has been instructed to deliver against payment, (ii)
proceeds from the redemption of Securities or other assets of the Fund, and
(iii) income from cash, Securities or other assets of the Fund. [*] Any such
credit shall be conditional upon actual receipt by the 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 Corporation to
facilitate the settlement of the 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 the
Fund, the Custodian shall wire each amount specified in such Proper
Instructions to or through such bank as the Corporation may designate with
respect to such amount in such Proper Instructions.
5.2 No Duty Regarding Paying Banks. The Custodian shall not be under any
obligation to effect payment or distribution by any bank designated in Proper
Instructions given pursuant to Section 5.1 above of any amount paid by the
Custodian to such bank in accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the 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
Corporation, the Custodian and a broker-dealer registered under the 1934 Act
and a member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities exchange
(or the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the Fund,
(b) For purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund or in connection with [*]
financial futures contracts (or options thereon) purchased or sold by the Fund,
which constitute collateral for loans of Securities made by the Fund,
(c) For purposes of compliance by the 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
(d) 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 Directors, 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 single Fund only. All Proper Instructions
relating to a segregated account shall specify the Fund involved.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall use its best efforts and shall
act in good faith in carrying out its obligations under this Agreement, and
shall be without liability to the Corporation or the 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
gross 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 (except in the case of gross negligence, bad faith
or willful misconduct) for any action reasonably taken or omitted pursuant to
such advice. The Custodian shall promptly notify the Corporation 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
Corporation or the Fund is in compliance with the 1940 Act, the regulations
thereunder, the provisions of the Corporation's charter documents or By-Laws,
or its investment objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the 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 the 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 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 Corporation to keep the
books of account of the Fund and/or compute the value of the assets of the
Fund. The Custodian shall take all such reasonable actions as the Corporation
may from time to time request to enable the Corporation to obtain, from year to
year, favorable opinions from the Corporation's independent accountants with
respect to the Custodian's activities hereunder in connection with (a) the
preparation of the Corporation'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 Corporation of any other requirements of the Securities and
Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Corporation. The Corporation 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 Corporation, 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. [*] The
indemnification herein shall survive the termination of this Agreement.
8.2 Indemnification by Custodian. [*] The Custodian shall indemnify and
hold harmless the Corporation 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. [*] The indemnification provided for
herein shall survive the termination of this Agreement.
8.3 Indemnity to be Provided. If the Corporation 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 Corporation shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
8.4 Security. If the Custodian advances cash or Securities to the Fund
for any purpose, either at the Corporation'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 such 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 the
Fund and to dispose of other assets of the Fund to the extent necessary to
obtain reimbursement or indemnification.
ARTICLE IX
COMPLIANCE WITH RULE 17f-7
9.1 The Custodian shall, for consideration by the Corporation, provide an
analysis in accordance with Rule 17f-7(a)(1)(i)(A) under the 1940 Act of the
risks associated with maintaining the Fund's foreign assets with each
Securities Depository used by the Custodian as of the date hereof (or, in the
case of a Securities Depository not used by the Custodian as of the date
hereof, prior to the initial placement of the Fund's foreign assets at such
Securities Depository) and at which any foreign asset of the Fund are held or
are expected to be held. The Custodian will also inform the Corporation
whether holding assets in a particular Securities Depository is voluntary or
compulsory. In connection with the foregoing, the Corporation shall notify the
Custodian of any Securities Depositories at which it does not choose to have
its foreign assets held. The Custodian shall monitor the custody risks
associated with maintaining the Fund's foreign assets at each such Securities
Depository on a continuing basis and shall promptly notify the Corporation or
its investment adviser of any material changes in such risks.
9.2 The Custodian shall exercise such reasonable care, prudence and
diligence in performing the requirements of Rule 17f-7 under the 1940 Act or,
as applicable, in selecting a sub-custodian that will perform the requirements
of Rule 17f-7, as a professional custodian having responsibility for
safekeeping of foreign assets or delegating such function to a sub-custodian
would exercise.
9.3 Based on the information available to it in the exercise of reasonable
care, prudence, and diligence, the Custodian or its designated sub-custodian
shall determine the eligibility under Rule 17f-7 of each depository and shall
promptly advise the Corporation if any such depository ceases to be eligible.
ARTICLE X
FORCE MAJEURE; DISASTER RECOVERY SYSTEMS
10.1 Force Majeure. Neither the Custodian nor the Corporation shall be
liable for any failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; wars; civil or military disturbances; sabotage;
strikes; epidemics; riots; power failures; computer failure and any such
circumstances beyond its reasonable control as may cause interruption, loss or
malfunction of utility, transportation, computer (hardware or software) or
telephone communication service; accidents; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation; provided, however, that the Custodian in
the event of a failure or delay (i) shall not discriminate against the 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.
10.2 Disaster Recovery Systems. [*] The Custodian shall maintain a
disaster recovery plan and procedures including provisions for emergency use of
electronic data processing equipment, which is reasonable in light of the
services to be provided. The Custodian shall, at no additional expense to the
Fund take reasonable steps to minimize service interruptions. The Custodian
shall have no liability with respect to the loss of data or service
interruptions caused by equipment failure, provided it maintains such plans and
procedures.
ARTICLE XI
EFFECTIVE PERIOD; TERMINATION
11.1 Effective Period. This Agreement shall become effective as of its
execution or when the Fund commences operations and shall continue in full
force and effect until terminated as hereinafter provided.
11.2 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 Directors, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of termination
(a) deliver directly to the successor custodian all Securities (other than
Securities held in a Book-Entry System or Securities Depository) and cash then
owned by the 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 Funds at the successor custodian, provided that
the Corporation 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 Corporation 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.
11.3 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Corporation 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 the Funds at such
bank or Trust company all Securities of the Funds 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 XII
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time
to time by the Corporation and the Custodian. The fees and other charges in
effect on the date hereof and applicable to the Fund are set forth in Exhibit C
attached hereto.
ARTICLE XIII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Corporation hereunder
shall not be binding upon any of the Corporations, shareholders, nominees,
officers, agents or employees of the Corporation personally, but shall bind
only the property of the Corporation as provided in the Corporation's Articles
of Incorporation, as from time to time amended. The execution and delivery of
this Agreement have been authorized by the Corporation, and this Agreement has
been signed and delivered by an authorized officer of the Corporation, acting
as such, and neither such authorization by the Corporation 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 property of the Corporation as provided in the above-mentioned
Corporation's Articles of Incorporation.
ARTICLE XIV
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 Corporation:
To Custodian:
U.S. Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Institutional Trust & Custody
Telephone: (513) 632-____
Facsimile: (262) 790-____
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIV. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal, and magnetic tape.
ARTICLE XV
MISCELLANEOUS
15.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. [*]
15.2 References to Custodian. The Corporation shall not circulate any
printed matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in the
prospectus or statement of additional information for the Fund and such other
[*] printed matter as merely identifies Custodian as custodian for the Fund.
The Corporation 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.
15.3 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.
15.4 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.
15.5 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.
15.6 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.
15.7 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.
15.8 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, 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: Valgro Funds, Inc.
Xxxxxx Xxxxxx By: Xxxxxx Xxxxxx, President
ATTEST: U.S. BANK, N.A.
Xxxxx X. Xxxxxxx By: Xxxxxxxx X. Xxxxxx
Vice President
===============================================================================
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons authorized
by the Corporation to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
President: Xxxxxx Xxxxxx Xxxxxx Xxxxxx
Secretary: ___________________
Treasurer: ___________________
Vice President: ___________________
Adviser Employees: ___________________
___________________
Transfer Agent/Fund Accountant
Employees: ___________________
___________________
___________________
___________________
___________________
===============================================================================
EXHIBIT B
US Bank
Five Star Service Guaranteed
Institutional Trust & Custody
Standard of Service Guide
U.S. Bank Institutional Custody
000 Xxxxxx Xxxxxx, 6th Floor
M.L. CN-OH-06TC
Xxxxxxxxxx, XX 00000
November, 2001
-------------------------------------------------------------------------------
U.S. Bank Institutional Custody
Standards of Service Guide
U.S. Bank, N.A. 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 Bank
of New York 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, Capital Changes
Daily (CCH) 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, XCITEK, 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 Standard 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.
-------------------------------------------------------------------------------
U.S. Bank Security Settlement Standards
Transaction Type | Instructions Deadlines* | Delivery Instructions
Transaction | Instructions | Delivery
Type | Deadlines* | Instructions
-----------------|------------------|------------------------------------------
DTC | 1:30 P.M. on | DTC Participant #2803
| Settlement Date | Agent Xxxx XX 00000
| | Institutional #______________
| | For Account #____________
-----------------|------------------|------------------------------------------
Federal Reserve | 12:30 P.M. on | Federal Reserve Bank of Cleveland
Book Entry | Settlement Date | for U.S. Bank, N.A. ABA# 000000000
| | CINTI/1050
| | For Account #_____________
-----------------|------------------|------------------------------------------
Federal Reserve | 1:00 P.M. on | Federal Reserve Bank of Cleveland
Book Entry | Settlement Date | for U.S. Bank, N.A. ABA# 000000000
(Repurchase | | CINTI/1040
Agreement | | For Account #_____________
Collateral Only) | |
-----------------|------------------|------------------------------------------
PTC Securities | 12:00 P.M. on | PTC For Account BYORK
(GNMA Book | Settlement Date | U.S. Bank / 117612
Entry) | |
-----------------|------------------|------------------------------------------
Physical | 9:30 A.M. EST on | Bank of New York
Securities | Settlement Date | One Xxxx Xxxxxx, 0xx Xxxxx, Window A
| (for Deliveries, | Xxx Xxxx, XX 00000
| by 4:00 P.M. on | For account of U.S. Bank / Cust #117612
| Settlement Date | Attn: Xxxxxx Xxxxxx
| minus 1) |
-----------------|------------------|------------------------------------------
CEDEL/EURO-CLEAR | 11:00 A.M. on | Cedel a/c 55021
| Settlement Date | FFC: a/c 387000
| minus 2 | U.S. Bank /Global Omnibus
| |-----------------------------------
| | Euroclear a/c 97816
| | FFC: a/c 387000
| | U.S. Bank/Global Omnibus
-----------------|------------------|------------------------------------------
Cash Wire | 3:00 P.M. | U.S. Bank, X.X. Xxxxx/Trust
Transfer [*] | | ABA# 000000000
| | Credit Account #112950027
| | Account of U.S. Bank Trust Services
| | Further Credit to ___________
| | Account # _______________
*All times listed are Eastern Standard Time.
-------------------------------------------------------------------------------
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 Certificates* | Payable Date | Payable Date
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 falls on a weekend or bank holiday, payment will be
made on the immediately following business day.
-------------------------------------------------------------------------------
U.S. Bank Corporate Reorganization Standards
| | Deadline for |
| | Client |
Type of | Notification | Instructions | Transaction
Action | to Client | to U.S. Bank | Posting
-------------------|--------------------------|---------------|------------
Rights, Warrants, | Later of 10 business | 5 business | Upon
and Optional | days prior to expiration | days prior to | receipt
Mergers | or receipt of notice | expiration |
-------------------|--------------------------|---------------|------------
Mandatory Puts | Later of 10 business | 5 business | Upon
with Option to | days prior to expiration | days prior to | receipt
Retain | or receipt of notice | expiration |
-------------------|--------------------------|---------------|------------
Class Actions | 10 business days prior | 5 business | Upon
| to expiration date | days prior to | receipt
| | expiration |
-------------------|--------------------------|---------------|------------
Voluntary Tenders, | Later of 10 business | 5 business | Upon
Exchanges, and | days prior to expiration | days prior to | receipt
Conversions | or receipt of notice | expiration |
-------------------|--------------------------|---------------|------------
Mandatory Puts, | At posting of funds or | None | Upon
Defaults, | securities received | | receipt
Liquidations, | | |
Bankruptcies, | | |
Stock Splits, | | |
Mandatory | | |
Exchanges | | |
-------------------|--------------------------|---------------|------------
Full and Partial | Later of 10 business | None | Upon receipt
Calls | days prior to expiration | |
| or receipt of notice | |
NOTE: Fractional shares/par amounts resulting from any of the above will be
sold.
===============================================================================
EXHIBIT C
Domestic Custody Fee Schedule
For
Valgro Fund
X.X.Xxxx Institutional Custody Services, as Custodian, will receive monthly
compensation for services according to the terms of the following Schedule:
I. Portfolio Transaction Fees:
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through
DTC or Federal Reserve $ 9.00
(c) For each portfolio transaction processed through
DTC or Federal Reserve -- Advisor affirmed $ 7.50
(d) Fund of Fund trades Advisor initiated $12.00
(e) Fund of Fund Trades Custodian initiated $20.00
(f) For each portfolio transaction processed through
our New York custodian $20.00
(g) For each Amortized Security Purchase and sale $ 9.00
(h) For each Amortized Security Prin/Int Paydown $ 8.00
(i) For each covered call option/future contract written,
exercised or expired $10.00
(j) For each Cedel/Euro clear transaction $80.00
(k) For each Disbursement (Fund expenses only) $ 5.00
A transaction is a purchase/sale of a security, free receipt/free
delivery (excludes initial conversion), maturity, tender or exchange:
II. Market Value Fee
Based upon an annual rate of: Million
.00030 (3.0 Basis Points) on First $20
.00020 (2.0 Basis Point) on Next $30
.00010 (1.0 Basis Point) on Balance
III. Monthly Minimum Fee-Per Fund $300.00
IV. Out-of-Pocket Expenses
The only out-of-pocket expenses charged to your account will
be shipping fees or transfer fees.
V. XXX Documents Per Shareholder/year to hold each XXX Document $8.00
VI. Earnings Credits
On a monthly basis any earnings credits generated from uninvested custody
balances will be applied against any cash management service fees
generated.
* U S Bank Institutional Custody retains the right to be reimbursed for
out-of-pocket expenses including, but not limited to postage, insurance
and long distance telephone charges. Other services are available and prices
can be supplied upon request.
* Real Time Internet Access for the client will be provided at no additional
charge
* This fee schedule is quoted based on exclusive utilization of U S Bank
Money Market Funds, Commercial Paper, Repurchase Agreements or Fed
Discount Notes for investment of short-term cash.