CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of December,
2006, by and between GUERITE FUNDS, an Ohio business trust (the "Trust"), and
U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States of America with its principal place
of business at Cincinnati, Ohio (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 Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the 1940 Act; and
WHEREAS, the Trust desires to retain the Custodian to act as custodian of
the cash and securities of each series of the Trust listed on EXHIBIT C hereto
(as amended from time to time) (each a "Fund" and collectively, the "Funds").
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
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings set forth below unless the context otherwise requires:
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 the 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 amended from time to time.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of
31 CFR Part 350, or in such book-entry regulations of federal agencies
as are substantially in the form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc., and any other day for which the
Trust computes the net asset value of Shares of the Fund.
1.5 "ELIGIBLE SECURITIES DEPOSITORY" shall mean a system for the central
handling of securities as that term is defined in Rule 17f-4 and 17f-7
under the 1940 Act.
1.6 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name of
the Trust, which is provided for in Section 3.2 below.
1.7 "IRS" shall mean the Internal Revenue Service.
1.8 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.9 "OFFICER" shall mean the Chairman, President, any Vice President, the
Chief Compliance Officer, any Assistant Vice President, the Secretary,
any Assistant Secretary, the Treasurer, or any Assistant Treasurer of
the Trust.
1.10 "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.
1.11 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions.
1.12 "SEC" shall mean the Securities and Exchange Commission.
1.13 "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 or its agents have the
facilities to clear and service.
1.14 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company and
any other clearing agency registered with the SEC 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.
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1.15 "SHARES" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Trust on account of the Fund.
1.16 "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, and
(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 be in writing and 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 Trust'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 a 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 in (i)-(vi)
above, such other provisions that the Custodian determines will
provide, in their entirety, the same or a greater level of care and
protection for Trust assets as the specified provisions.
1.17 "WRITTEN INSTRUCTIONS" shall mean (i) written communications actually
received by the Custodian and signed by an Authorized Person or, (ii)
communications by telex or electronic communication or any other such
system from one or more persons reasonably believed by the Custodian
to be Authorized Persons.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby 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, 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. The services and duties of the Custodian
shall be confined to those matters expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Custodian
hereunder.
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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 Trust's declaration of trust, certified by the
Secretary;
(b) A copy of the Trust's bylaws, 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 current prospectus of the Fund (the "Prospectus");
(e) A certification of the Chairman or the President and the
Secretary of the Trust setting forth the names and signatures of
the current Officers of the Trust and other Authorized Persons;
and
(f) An executed authorization required by the Shareholder
Communications Act of 1985, attached hereto as EXHIBIT E.
2.3 NOTICE OF APPOINTMENT OF TRANSFER AGENT. The Trust agrees to notify
the Custodian in writing of the appointment, termination or change in
appointment of any 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, Eligible 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 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-Custodian to establish and maintain arrangements with (i)
Eligible Securities Depositories or (ii) members of the
Sub-Custodian's network 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. The Custodian shall be liable for the actions of any
Sub-Custodians (regardless of whether assets are maintained in
the custody of a Sub-Custodian, a member of its network
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or an Eligible Securities Depository) appointed by it as if such
actions had been done by the Custodian.
(b) The agreement between the Custodian and each Sub-Custodian acting
hereunder shall be in a written contract containing the required
provisions set forth in Rule 17f-5(c)(2) under the 1940 Act.
(c) 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 Fund with a Sub-Custodian and
of any material changes in the Fund's custody arrangements. Such
reports shall include an analysis of the custody risks associated
with maintaining assets with any Eligible Securities
Depositories.
(d) The Custodian shall promptly take such steps as may be required
to withdraw assets of the Fund from any Sub-Custodian arrangement
that has ceased to meet the requirements of Rule 17f-5 or Rule
17f-7 under the 1940 Act, as applicable.
(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 Fund. The
Custodian further warrants that the Fund's assets will be subject
to reasonable care if maintained with a 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), its method of keeping custodial
records, and its 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 and ensure that each
Sub-Custodian engaged from time to time to hold assets of the
Fund has established a system to monitor (i) the appropriateness
of maintaining the Fund's assets with a Sub-Custodian or members
of a Sub-Custodian's network; (ii) the performance of the
contract governing the Fund's and the Custodian's arrangements
with such Sub-Custodian or members of a Sub-Custodian's network;
and (iii) the custody risks of maintaining assets with an
Eligible Securities Depository.
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(g) The Custodian shall use reasonable commercial efforts to collect
all income and other payments with respect to foreign Securities
to which the Fund shall be entitled and shall credit such income,
as collected, to the Trust. In the event that extraordinary
measures are required to collect such income, the Trust and
Custodian shall consult as to the measurers and as to the
compensation and expenses of the Custodian relating to such
measures.
3.4 DELIVERY OF ASSETS TO CUSTODIAN. The Trust shall deliver, or cause to
be delivered, to the Custodian all of the Fund's Securities, cash and
other investment assets, including (i) 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 (ii) all
cash received by the Fund for the issuance 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) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall 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
the 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 the 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
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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 the Fund are kept) on the
internal accounting controls and procedures for safeguarding
Securities deposited in such Book-Entry System or Securities
Depository.
(f) Notwithstanding anything to the contrary in this Agreement, the
Custodian shall be liable to the Trust for any loss or damage to
the Fund resulting from (i) 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, or
(ii) failure of the Custodian or any 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.
(g) With respect to its responsibilities under this Section 3.5 and
pursuant to Rule 17f-4 under the 1940 Act, the Custodian hereby
warrants to the Trust that it agrees to (i) exercise due care in
accordance with reasonable commercial standards in discharging
its duty as a securities intermediary to obtain and thereafter
maintain such assets, (ii) provide, promptly upon request by the
Trust, such reports as are available concerning the Custodian's
internal accounting controls and financial strength, and (iii)
require any Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain assets
corresponding to the security entitlements of its entitlement
holders.
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) 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 any Sub-Custodian) of such receipts as are
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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 any
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;
(b) In connection with the conversion, exchange or surrender, as set
forth in Section 3.7(f) below, of Securities owned by the Fund;
(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,
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 the Fund;
(g) For transfer in accordance with the provisions of any agreement
among the Trust, the Custodian and a futures commission merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Fund;
(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
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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, or cause
the Sub-Custodian to 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, or 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 the 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 Trust
shall have specified to the Custodian in Proper Instructions;
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(j) For delivery as security in connection with any borrowings by the
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 the Fund;
(m) For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian and a futures commission merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Fund; 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 the Fund:
(a) Subject to Section 9.4 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 9.4 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
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submit, as directed by the Trust, reports to the IRS and the
Trust at such time, in such manner and containing such
information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to Securities
held therein, through a Book-Entry System or Securities
Depository, all rights and similar Securities issued with respect
to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other 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 the Fund, the
Custodian, a Sub-Custodian or any nominee thereof, or in the name of a
Book-Entry System, Securities Depository or any nominee of either
thereof. The records of the Custodian with respect to foreign
securities of the Fund that are maintained with a Sub-Custodian in an
account that is identified as belonging to the Custodian for the
benefit of its customers shall identify those securities as belonging
to the Fund. 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
referred to above 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 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 the rules and regulations of the SEC, (ii) be the property
of the Trust and at all
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times during the regular business hours of the Custodian be made
available upon request for inspection by duly authorized
officers, employees or agents of the Trust and employees or
agents of the SEC, and (iii) if required to be maintained by Rule
31a-1 under the 1940 Act, be preserved for the periods prescribed
in Rules 31a-1 and 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, the Custodian shall furnish the Trust 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. As the Trust may reasonably request from
time to time, the Custodian shall provide the Trust with reports on
the internal accounting controls and procedures for safeguarding
Securities which are employed by the Custodian or any Sub-Custodian.
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 Trust such proxies, all
proxy soliciting materials and all notices relating to such
Securities. With respect to the foreign Securities, the Custodian will
use reasonable commercial efforts to facilitate the exercise of voting
and other shareholder rights, subject to the laws, regulations and
practical constraints that may exist in the country where such
securities are issued. The Trust acknowledges that local conditions,
including lack of regulation, onerous procedural obligations, lack of
notice and other factors may have the effect of severely limiting the
ability of the Trust to exercise shareholder rights.
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 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 Trust desires to take action with respect to any
tender offer, exchange offer or other similar transaction, the Trust
shall notify the Custodian at least five Business Days prior to the
date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant
information for any Security which has unique put/option provisions at
least five Business Days prior to the beginning date of the tender
period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF 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 (i) the name of
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the issuer or writer of such Securities, and the title or other
description thereof, (ii) the number of shares, principal amount (and
accrued interest, if any) or other units purchased, (iii) the date of
purchase and settlement, (iv) the purchase price per unit, (v) the
total amount payable upon such purchase, and (vi) 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 and in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to
the Fund for such payment.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by the Fund,
Written Instructions shall be delivered to the Custodian, specifying
(i) the name of the issuer or writer of such Securities, and the title
or other description thereof, (ii) the number of shares, principal
amount (and accrued interest, if any), or other units sold, (iii) the
date of sale and settlement, (iv) the sale price per unit, (v) the
total amount payable upon such sale, and (vi) 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. 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 Custodian of final payment and may be reversed if final
payment is not
13
actually received in full. The Custodian may, in its sole discretion
and from time to time, permit the Fund to use funds so credited to the
Fund Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the
Fund Custody Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to
facilitate the settlement of a Fund's transactions in 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 or broker-dealer as the
Trust may designate.
5.2 NO DUTY REGARDING PAYING BANKS. Once the Custodian has wired amounts
to a bank or broker-dealer pursuant to Section 5.1 above, the
Custodian shall not be under any obligation to effect any further
payment or distribution by such bank or broker-dealer.
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
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 the Fund;
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund, or financial
futures contracts (or options thereon) purchased or sold by the
Fund, or short sales by the Fund;
(c) which constitute collateral for loans of Securities made by the
Fund;
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(d) 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 short sales,
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 the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
COMPENSATION OF CUSTODIAN
7.1 COMPENSATION. The Custodian shall be compensated for providing the
services set forth in this Agreement in accordance with the fee
schedule set forth on EXHIBIT D hereto (as amended from time to time).
The Custodian shall also be compensated for such out-of-pocket
expenses (e.g., telecommunication charges, postage and delivery
charges, and reproduction charges) as are reasonably incurred by the
Custodian in performing its duties hereunder. The Trust shall pay all
such fees and reimbursable expenses within 30 calendar days following
receipt of the billing notice, except for any fee or expense subject
to a good faith dispute. The Trust shall notify the Custodian in
writing within 30 calendar days following receipt of each invoice if
the Trust is disputing any amounts in good faith. The Trust shall pay
such disputed amounts within 10 calendar days of the day on which the
parties agree to the amount to be paid. With the exception of any fee
or expense the Trust is disputing in good faith as set forth above,
unpaid invoices shall accrue a finance charge of 1 1/2% per month
after the due date. Notwithstanding anything to the contrary, amounts
owed by the Trust to the Custodian shall only be paid out of the
assets and property of the particular Fund involved.
7.2 OVERDRAFTS. The Trust is responsible for maintaining an appropriate
level of short term cash investments to accommodate cash outflows. The
Trust may obtain a formal line of credit for potential overdrafts of
its custody account. In the event of an overdraft or in the event the
line of credit is insufficient to cover an overdraft, the overdraft
amount or the overdraft amount that exceeds the line of credit will be
charged in accordance with the fee schedule set forth on EXHIBIT D
hereto (as amended from time to time).
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust hereby
represents and warrants to the Custodian, which representations and
warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Trust in accordance with all requisite action and
constitutes a valid and legally binding obligation of the Trust,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
8.2 REPRESENTATIONS AND WARRANTIES OF THE CUSTODIAN. The Custodian hereby
represents and warrants to the Trust, which representations and
warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Custodian in accordance with all requisite action and
constitutes a valid and legally binding obligation of the
Custodian, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of
creditors and secured parties;
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its
16
property which would prohibit its execution or performance of this
Agreement; and
(d) It will 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 ("Disaster Recovery Plan"), and it will,
at no additional expense to the Trust, take reasonable steps to
minimize service interruptions in the event of a disaster.
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 STANDARD OF CARE. The Custodian shall exercise reasonable care in the
performance of its duties under this Agreement. The Custodian shall
not be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust in connection with its duties under this
Agreement, except a loss arising out of or relating to the Custodian's
(or a Sub-Custodian's) refusal or failure to comply with the terms of
this Agreement (or any sub-custody agreement) or from its (or a
Sub-Custodian's) bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement (or any sub-custody
agreement). The Custodian shall be entitled to rely on and may act
upon advice of Counsel to the Trust on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant
to such advice. The Custodian shall promptly notify the Trust of any
action taken or omitted by the Custodian pursuant to advice of Counsel
to the Trust.
9.2 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.
9.3 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.
9.4 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.
9.5 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.
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9.6 COOPERATION. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust to keep
the books of account of the Fund and/or compute the value of the
assets of the 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 (i) the preparation of the Trust's
reports on Form N-1A, Form N-CSR and Form N-SAR and any other reports
required by the SEC, and (ii) the fulfillment by the Trust of any
other requirements of the SEC.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold harmless
the Custodian, any Sub-Custodian and any nominee thereof (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") from
and against any and all claims, demands, losses, expenses and
liabilities of any and every nature (including reasonable attorneys'
fees) that an Indemnified Party may sustain or incur or that may be
asserted against an Indemnified Party by any person arising directly
or indirectly (i) from the fact that Securities are registered in the
name of any such nominee, (ii) from any action taken or omitted to be
taken by the Custodian or such Sub-Custodian (a) at the request or
direction of or in reliance on the advice of the Trust, or (b) upon
Proper Instructions, or (iii) from the performance of its obligations
under this Agreement or any sub-custody agreement, provided that
neither the Custodian nor any such Sub-Custodian shall be indemnified
and held harmless from and against any such claim, demand, loss,
expense or liability arising out of or relating to its refusal or
failure to comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful misconduct in
the performance of its duties under this Agreement (or any sub-custody
agreement). This indemnity shall be a continuing obligation of the
Trust, its successors and assigns, notwithstanding the termination of
this Agreement. As used in this paragraph, the terms "Custodian" and
"Sub-Custodian" shall include their respective directors, officers and
employees.
10.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall indemnify and hold
harmless the Trust from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) that the Trust may sustain or incur or
that may be asserted against the Trust by any person arising out of
any action taken or omitted to be taken by an Indemnified Party as a
result of the Indemnified Party's refusal or failure to comply with
the terms of this Agreement (or any sub-custody agreement), or from
its bad faith, negligence or willful misconduct in the performance of
its duties under this Agreement (or any sub-custody agreement). This
indemnity shall be a continuing obligation of the Custodian, its
successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "Trust" shall include
the Trust's trustees, officers and employees.
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10.3 SECURITY. If the Custodian advances cash or Securities to the 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 claim, demand, loss, expense or liability (including
reasonable attorneys' fees) (except such as may arise from its or its
nominee's bad faith, negligence 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.
10.4 MISCELLANEOUS.
-------------
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under any
provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
(c) In order that the indemnification provisions contained in this
Article shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it
is further understood that the indemnitee will use all reasonable
care to notify the indemnitor promptly concerning any situation
that presents or appears likely to present the probability of a
claim for indemnification. The indemnitor shall have the option
to defend the indemnitee against any claim that may be the
subject of this indemnification. In the event that the indemnitor
so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
section. The indemnitee shall in no case confess any claim or
make any compromise in any case in which the indemnitor will be
asked to indemnify the indemnitee except with the indemnitor's
prior written consent.
ARTICLE XI
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; acts of terrorism; 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,
19
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 in the event of a failure or delay, the Custodian (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. The Custodian will be
liable for any failure or delay in performance of its obligations under this
Agreement or any loss whatsoever arising out of the Custodian's failure to (i)
adopt a Disaster Recovery Plan (as defined in Article VIII above); or (ii)
reasonably implement and adhere to such Disaster Recovery Plan.
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Trust,
all records and other information relative to the Trust and prior, present, or
potential shareholders of the Trust (and clients of said shareholders), and not
to use such records and information for any purpose other than the performance
of its responsibilities and duties hereunder, except (i) after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to comply, (ii)
when requested to divulge such information by duly constituted authorities, or
(iii) when so requested by the Trust. Records and other information which have
become known to the public through no wrongful act of the Custodian or any of
its employees, agents or representatives, and information that was already in
the possession of the Custodian prior to receipt thereof from the Trust or its
agent, shall not be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by the
Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time. In this regard, the Custodian shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent unauthorized
access to or use of, records and information relating to the Trust and its
shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 EFFECTIVE PERIOD. This Agreement shall become effective as of the date
first written above and will continue in full force and effect until
terminated as hereinafter provided.
13.2 TERMINATION. This Agreement may be terminated by either party upon
giving 90 days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. Notwithstanding the
foregoing, this Agreement may be terminated by any party upon the
breach of the other party of any material term of this Agreement if
such breach is not cured within 15 days of notice of such breach to
the breaching party. In addition, the Trust may, at any time,
20
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.
13.3 APPOINTMENT OF SUCCESSOR CUSTODIAN. 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 (i) 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 (ii) 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 it
shall then be entitled. In addition, the Custodian shall, at the
expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by
the Custodian under this Agreement in a form reasonably acceptable to
the Trust (if such form differs from the form in which the Custodian
has maintained the same, the Trust shall pay any expenses associated
with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for
assistance from the Custodian's personnel in the establishment of
books, records, and other data by such successor. Upon such delivery
and transfer, the Custodian shall be relieved of all obligations under
this Agreement.
13.4 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian is
not designated by the Trust on or before the date of termination of
this Agreement, then the Custodian shall have the right to deliver to
a bank or trust company of its own selection, which bank or trust
company (i) is a "bank" as defined in the 1940 Act, and (ii) has
aggregate capital, surplus and undivided profits as shown on its 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 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. In addition, under these circumstances, all books, records
and other data of the Trust shall be returned to the Trust.
ARTICLE XIV
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 trust
property of the Trust as provided in the Trust's Agreement and 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
21
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 Agreement and
Declaration of Trust.
ARTICLE XV
MISCELLANEOUS
15.1 COMPLIANCE WITH LAWS. The Trust has and retains primary responsibility
for all compliance matters relating to the Fund, including but not
limited to compliance with the 1940 Act, the Internal Revenue Code of
1986, the Xxxxxxxx-Xxxxx Act of 2002, the USA Patriot Act of 2002 and
the policies and limitations of the Fund relating to its portfolio
investments as set forth in its Prospectus and statement of additional
information. The Custodian's services hereunder shall not relieve the
Trust of its responsibilities for assuring such compliance or the
Board of Trustee's oversight responsibility with respect thereto.
15.2 AMENDMENT. This Agreement may not be amended or modified in any manner
except by written agreement executed by the Custodian and the Trust.
15.3 ASSIGNMENT. This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust
without the written consent of the Custodian, or by the Custodian
without the written consent of the Trust.
15.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to
conflicts of law principles. To the extent that the applicable laws of
the State of Ohio, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control, and
nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the SEC thereunder.
15.5 NO AGENCY RELATIONSHIP. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other party
to this Agreement, or to conduct business in the name, or for the
account, of the other party to this Agreement.
15.6 SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties that
are similar or identical to some or all of the services provided
hereunder.
15.7 INVALIDITY. Any provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
22
render unenforceable such provision in any other jurisdiction. In such
case, the parties shall in good faith modify or substitute such
provision consistent with the original intent of the parties.
15.8 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
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 Custodian shall be sent to:
U.S. Bank National Association
000 Xxxxxx Xxxxxx, X.X. XX-XX-X0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Facsimile: (000) 000-0000
and notice to the Trust shall be sent to:
Guerite Funds
c/o Ultimus Fund Solutions, LLC
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
15.9 MULTIPLE ORIGINALS. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an
original, but such counterparts shall together constitute but one and
the same instrument.
15.10 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.
15.11 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in
the prospectus or statement of additional information for the Fund and
such other printed matter as merely identifies Custodian as custodian
for the Fund. The Trust shall submit printed matter requiring approval
to Custodian in draft form, allowing sufficient time for review by
Custodian and its counsel prior to any deadline for printing.
23
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.
GUERITE FUNDS U.S. BANK NATIONAL ASSOCIATION
By: By:
----------------------------------- -------------------------------
Name: Name:
--------------------------------- -----------------------------
Title: Title:
-------------------------------- ----------------------------
24
EXHIBIT A
==========
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by Guerite Funds to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
------------------ ----------------------------------
President:
----------------------------------
Secretary:
----------------------------------
Treasurer:
----------------------------------
Vice President:
----------------------------------
Other:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
A-1
EXHIBIT B
---------
U.S. BANK INSTITUTIONAL CUSTODY SERVICES
STANDARDS OF SERVICE GUIDE
U.S. Bank, N.A. ("USBank") 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 USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank 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, USBank 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, USBank utilizes SEI's Bond Source, Xxxxx
Information Systems, Standard & Poor's Corporation, XCITEK, and DTC Important
Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received
three (3) business days prior to any payment or settlement in order for the
USBank 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 USBANK WILL PROVIDE YOU WITH AN
UPDATED COPY OF ITS STANDARDS OF SERVICE GUIDE.
B-1
U.S. BANK TRADE SETTLEMENT INSTRUCTIONS
TRANSACTION TYPE DELIVERY INSTRUCTIONS
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional # if
applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account# (your U.S. Bank Trust account
number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as collateral ABA#: 000000000
for repurchase agreements Routing Symbol: 1040 Special
For Account# (your U. S. Bank Trust account
number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in Milwaukee, XX Xxx 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e., pair
off, repo, tri-party
BBI or OBI For further credit to account: (trust acct.
#, contact name & phone number)
B-2
USBANK 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
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.
B-3
USBANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO USBANK POSTING
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies,
Stock Splits, Mandatory
Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be
sold.
B-4
EXHIBIT C
---------
FUND NAMES
Separate Series of Guerite Funds
Name of Series Date Added
-------------- ----------
GUERITE ABSOLUTE RETURN FUND On or after 12/15/06
C-1
EXHIBIT D
---------
TO THE CUSTODY AGREEMENT - GUERITE FUNDS
U.S. BANK DOMESTIC CUSTODY FEE SCHEDULE AT DECEMBER 2006
U.S. Bank Institutional Custody Services, as Custodian, will receive monthly
compensation for services according to the terms of the following Schedule:
I. PORTFOLIO TRANSACTION FEES:
--------------------------
$ 7.00 per US Bank repurchase agreement transaction
$ 9.00 per book entry security (depository or Federal Reserve system)
$ 7.50 per book entry security (depository or Federal Reserve system) -
Advisor affirmed
$25.00 per portfolio transaction processed through our New York custodian
definitive security (physical)
$ 8.00 per principal paydown
$15.00 per option/future contract transaction that is written, exercised or
expired
$50.00 per Cedel/Euroclear transaction
$15.00 per mutual fund trade
$15.00 per Fed wire or margin variation Fed wire
$ 6.00 per short sale
$ 5.00 per expense disbursement
$150.00 per segregated account per year
Overdrafts - charged to the account at prime interest rate plus 2.
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. MARKET VALUE FEE PER FUND
--------------------------
Based upon an annual rate of:
1.75 basis points on first $ 50 million
1.00 basis point on the next $ 450 million
0.75 basis point on the next $ 1 billion
0.50 basis points on the balance
MONTHLY MINIMUM FEE $500 per month
III. OUT-OF-POCKET EXPENSES
----------------------
The only out-of-pocket expenses charged to your account will be shipping
fees or transfer fees. Treasury management and all other out-of-pocket
charges will be billed monthly.
IV. EARNINGS CREDITS
----------------
On a monthly basis, any earnings credits generated from uninvested DDA
balances will be applied against any cash management service fees
generated.
o U S Bank 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.
o Real Time Internet Access for the client will be provided at no additional
charge.
D-1
EXHIBIT E
---------
SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION
GUERITE FUNDS
The Shareholder Communications Act of 1985 requires banks and trust companies to
make an effort to permit direct communication between a company which issues
securities and the shareholder who votes those securities.
Unless you specifically require us to NOT release your name and address to
requesting companies, we are required by law to disclose your name and address.
Your "yes" or "no" to disclosure will apply to all securities U.S. Bank holds
for you now and in the future, unless you change your mind and notify us in
writing.
X YES U.S. Bank is authorized to provide the
----- Trust's name, address and security position
to requesting companies whose stock is
owned by the Trust.
NO U.S. Bank is NOT authorized to provide the
------ Trust's name, address and security position
to requesting companies whose stock is
owned by the Trust.
GUERITE FUNDS
By:
----------------------------------
Title:
-------------------------------
Date:
--------------------------------
E-1
