Exhibit (g)
MONARCH FUNDS
CUSTODIAN AGREEMENT
Agreement made the 7th day of May, 1999, between Monarch Funds, a
business trust organized under the laws of the State of Delaware, having its
principal place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000, (the
"Trust"), and Union Bank of California, N.A., national association, having its
principal place of business at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, hereinafter called the Custodian.
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust offers shares in three series: Treasury Cash Fund,
Government Cash Fund and Cash Fund (such series together with all other series
subsequently established by the Trust and made subject to this Agreement in
accordance with Section 12, being herein referred to as the "Funds");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of the assets
of the Funds of the Trust pursuant to the provisions of the Trust Instrument.
The Trust on behalf of the Funds agrees to deliver to the Custodian all
securities and cash of the Funds, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Funds from time to time, and the cash consideration received by it
for such new or treasury shares of beneficial interest of the Trust representing
interests in the Funds, ("Shares") as may be issued or sold from time to time.
The Custodian shall not be responsible for any property of a Fund held or
received by the Fund and not delivered to the Custodian.
The Trust hereby authorizes the Custodian to use Imperial Bank and The
Bank of New York as subcustodians, the use of Imperial Bank being limited to
custodianship of cash. In addition, the Custodian may, at any time and from time
to time, appoint any other bank as defined in Section 2(a)(5) of the Investment
Company Act of 1940 ("1940 Act") meeting the requirements of a custodian under
Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act
on behalf of one or more Funds as a subcustodian for the purposes of holding
cash, securities and other assets of the Funds and performing other functions of
the Custodian; provided that the Custodian sends written notification to the
Trust on or before the day upon which such other subcustodian is first employed.
The Custodian shall be liable for the actions or omissions of any subcustodian
to the same extent as if such action or omission were performed by the Custodian
itself.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF
THE TRUST HELD BY TO CUSTODIAN
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Fund all non-cash property, including all
securities owned by such Fund, other than securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as
"Securities Systems."
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions from the Trust on behalf of the applicable Fund, which
may be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
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3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or nominee name of any
subcustodian appointed pursuant to Section l; or for exchange for
a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such day upon which such other subcustodian
is first employed. The Custodian shall be liable for the actions
or omissions of any subcustodian to the same extent as if such
action or omission were performed by the Custodian itself.
7) Upon the sale of such securities for the account of the Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Trust on
behalf of the Fund, which may be in the form of cash or
obligations issued by the United States Government, its agencies
or instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's account
in the book-entry system authorized by the U.S. Department of the
Treasury, the Custodian will not be held liable or responsible
for the delivery of securities owned by the Fund prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Trust on behalf of the Fund requiring a pledge of assets by the
Trust on behalf of the Fund, but only against receipt of amounts
borrowed;
12) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Trust, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the currently effective
prospectus and statement of additional information of the Trust,
related to the Fund ("Prospectus"), in satisfaction of requests
by holders of Shares for repurchase or redemption; and
13) For any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions from the Trust on behalf of
the applicable Fund, a writing signed by an officer of the Trust
and certified by the Secretary or an Assistant Secretary,
specifying the securities of the Fund 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.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or
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in the name of any nominee of the Trust on behalf of the Fund or of any
nominee of the Custodian, or in the name or nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of
any subcustodian appointed pursuant to Section 1, unless specifically
directed by Proper Instructions to hold such registered securities in
so-called street name; provided that, in any event, all such securities
and other assets shall be held in an account of the Custodian
containing only assets of a Fund, or only assets held by a Custodian as
a fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Fund or other
customer for which such securities and other assets are held in such
account and their respective interests therein.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or other accounts in the name of Custodian, as custodian of
each Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Fund, other than cash maintained by the
Fund in a bank account established and used in accordance with Rule
17f-3 under the 1940 Act. Cash held hereunder shall be deemed to be a
special deposit. Funds held by the Custodian for a Fund may be
deposited by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as it may in
its discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be appointed in accordance with
and subject to the terms of Section 1 hereof.
2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
for the Shares or from the Transfer Agent of the Trust and deposit
into the account of the appropriate Fund such payments as are received
for Shares of that Fund issued or sold from time to time by the Trust.
The Custodian will provide timely notification to the Trust on behalf
of each such Fund and the Transfer Agent of any receipt by it of
payments for Shares of such Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Trust
on behalf of each applicable Fund and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Trust on behalf
of a Fund, make federal funds available to such Fund as of specified
times agreed upon from time to time by the Trust and the Custodian in
the amount of checks received in payment for Shares of such Fund which
are deposited into the Fund's account.
2.7 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a
timely basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or its agent thereof and shall credit such
income, as collected, to such Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest
when due on securities held hereunder. Income due each Fund on
securities loaned pursuant to the provisions of Section 2.2 10) shall
be the responsibility of the Trust. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Trust
with such information or data as may be necessary to assist the Trust
in arranging for the timely delivery to the Custodian of the income to
which the Fund is properly entitled.
2.8 PAYMENT OF MONIES. Upon receipt of Proper Instructions from the Trust
on behalf of the applicable Fund, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out
monies of a Fund in the following cases only:
1) Upon the purchase of securities, for the account of the Fund
but only (a) against the delivery of such securities to the
Custodian (or any bank, banking firm or trust company doing
business in the United States which is qualified under the
1940 Act to act as a custodian and has been designed by the
Custodian as its agent for this purpose) registered in the
name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.12 hereof; (c) in the case of repurchase
agreements entered into between the Trust on behalf of the
Fund and the Custodian, or another bank, or a broker-dealer
which is a member of the NASD, (i) against delivery of the
securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank
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with such securities or (ii) against delivery of the receipt
evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund or (d)
for transfer to a time deposit account of the Trust in any
domestic bank; such transfer may be effected prior to receipt
of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Trust as defined in
Section 2.17;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Fund as set forth in Section 2.10 hereof;
4) 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, management,
accounting, transfer agent and legal fees, and operating
expenses of the Trust whether or not such expenses are to be
in whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Fund
declared pursuant to the governing documents of the Trust;
6) For payment of the amount of dividends received in respec
of securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Trust on behalf of
the Fund, a writing signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Agreement, in any and
every case where payment for purchase of securities for the account of
a Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the
Trust on behalf of such Fund to so pay in advance, the Custodian shall
be absolutely liable to the Trust for such securities to the same
extent as if the securities had been received by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE TRUST. From
such funds as may be available for the purpose but subject to the
limitations of the Trust Instrument and any applicable votes of the
Board of Trustees of the Trust (the "Board")pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer Agent,
make funds available for payment to holders of Shares who have
delivered to the Transfer Agent a request for redemption or repurchase
of their Shares. In connection with the redemption or repurchase of
Shares of a Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection
with the redemption or repurchase of Shares of the Trust, the Custodian
shall honor checks drawn on the Custodian by a holder of Shares, which
checks have been furnished by the Trust to the holder of Shares, when
presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between the
Trust and the Custodian.
2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.12 DEPOSIT OF TRUST ASSETS IN SECURITIES SYSTEMS. Upon receipt of Proper
Instructions, the Custodian may deposit and/or maintain securities
owned by a Fund in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities
Systems" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
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1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall
identify by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the 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. The Custodian shall transfer securities
sold for the account of the Fund upon (i) receipt of advice
from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Trust at its
request. Upon request, the Custodian shall furnish the Trust
on behalf of the Fund confirmation of each transfer to or from
the account of the Fund in the form of a written advice or
notice and shall furnish to the Trust on behalf of the Fund
copies of daily transaction sheets reflecting each days
transactions in the Securities System for the account of the
Fund.
4) The Custodian shall provide the Trust for the Fund with any
report obtained by the Custodian on the Securities Systems
accounting system, internal accounting control and procedures
for safeguarding securities deposited in the Securities
System;
5) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for the benefit of
the Fund for any loss or damage to the Fund resulting from use
of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of
the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Trust, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for
any such loss or damage.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Trust on behalf of each applicable Fund establish
and maintain a segregated account or accounts for an on behalf of each
such Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.12 hereof, (i) for the purposes of
compliance by the Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (ii) for
other proper corporate purposes, but only, in the case of clause (ii),
upon receipt of, in addition to Proper Instructions from the Trust on
behalf of the applicable Fund, a writing signed by an officer of the
Trust and certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of each Fund held by it and in
connection with transfers of securities.
2.15 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Fund or a nominee of the Fund, all proxies are to be voted,
and shall promptly deliver to the Fund such proxies, all proxy
soliciting materials and all notices relating to such securities.
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2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Trust for each Fund all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith) received by the Custodian from issuers of the securities
being held for the Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Fund all written information
received by the Custodian from issuers of the securities whose tender
or exchange is sought and from the party (or his agents) making the
tender or exchange offer.
2.17 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Article 2 means a writing signed or initialed by one or more person or
persons as the Board shall have from time to time authorized. Each such
writing shall set forth the specific transaction or type of transaction
involved, including a specific statement of the purpose for which such
action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been
given by a person authorized to give such instructions with respect to
the transaction involved. The Trust shall cause all oral instructions
to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the
Board, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Board and the Custodian are satisfied that such procedures afford
adequate safeguards for the Funds' assets. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.13.
Notwithstanding anything to the contrary contained in the Agreement, no
person authorized by the Board as described in the preceding paragraph,
Trustee, officer, employee or agent of the Trust shall have physical
access to the assets of any Fund held by the Custodian nor shall the
Custodian deliver any assets of a Fund for delivery to an account of
such person; provided, however, that nothing in this Section 2.17 shall
prohibit the Trust's independent certified public accountants from
examining or reviewing the assets of the Fund's held by the Custodian.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust on behalf of each
applicable Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for to the Trust on behalf of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund
except as otherwise directed by the Board.
2.19 EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to have
been properly executed by or on behalf of the Trust. The Custodian may
receive and accept a certified copy of a vote of the Board as
conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action
by the Board pursuant to the Trust Instrument as described in such
vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
SECTION 3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF
ACCOUNT
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board who keep the books of account of
each Fund.
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SECTION 4. RECORDS
The Custodian shall with respect to each Fund create and maintain all
records relating to its activities and obligations under this Agreement in such
manner as will meet the obligations of the Trust under the 1940 Act with
particular attention to Section 31 thereof and Rules 3la-1 and 3la-2 thereunder.
All such records shall be the property of the Trust and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees and agents of the Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by each
Fund and held by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
SECTION 5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Trust on behalf
of each applicable Fund may from time to time request, to obtain from year to
year favorable opinions from the Trust's independent accountants with respect to
its activities hereunder in connection with the preparation of the Trust's Form
N-lA, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
SECTION 6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the Funds
at such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Agreement; such reports, shall be of sufficient scope and
in sufficient detail, as may reasonably be required by the Trust to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
SECTION 7. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Trust on behalf of each applicable Fund and the Custodian.
SECTION 8. RESPONSIBILITY OF CUSTODIAN
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 by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement, but shall be kept indemnified by and shall be
without liability to the Trust for any action taken or omitted by it in good
faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Trust) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to such
advice.
If the Trust on behalf of a Fund requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Trust or the Fund being liable for the payment of
money or incurring liability of some other form, the Trust on behalf of the
Fund, as a prerequisite to requiring the Custodian to take such action, shall
provide indemnity to the Custodian in an amount and form satisfactory to it.
If the Trust requires the Custodian to advance cash or securities for
any purpose for the benefit of a Fund or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominees own negligent action,
negligent failure to act or willful misconduct, the Custodian promptly shall
notify the Trust of the existence of any such advances, their amount and the
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Fund to which the advance applies. Such advances shall be payable on demand, on
the first business day following the Trust's receipt of notice of such demand.
SECTION 9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Trust on behalf of one or more of the Funds may at time by action of the
Board (i) substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) terminate this Agreement
immediately or at such later time as the Trust may designate in the event the
Trust determines that there is a reasonable basis to conclude that the Custodian
is insolvent or that the financial condition of the Custodian is deteriorating
in any material respect.
Upon termination of the Agreement, the Trust on behalf of each
applicable Fund shall pay to the Custodian such compensation as may be due as of
the date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
SECTION 10. SUCCESSOR CUSTODIAN
If a successor custodian for the Trust or of one or more of the Funds
shall be appointed by the Board, the Custodian shall, upon termination, deliver
to such successor custodian at the office of the Custodian all property of the
Trust then held by it hereunder and, in the case of securities, duly endorsed
and in the form for transfer, all securities of each applicable Fund then held
by it hereunder and shall transfer to an account of the successor custodian all
of the securities of each such Fund held in a Securities System. The Custodian
shall take all reasonable steps to assist in the transfer of the assets of the
applicable Funds to the successor custodian.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board, deliver
at the office of the Custodian and transfer such securities, funds and other
properties in accordance with such vote. In the event that no written order
designating a successor custodian or certified copy of a vote of the Board shall
have been delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the 1940 Act, doing
business in New York City, of its own selection, having an aggregate capital,
surplus, and undivided profits, as shown by its last published report, of not
less than $25,000,000, all securities, funds and other properties held by the
Custodian on behalf of each applicable Fund and all instruments held by the
Custodian relative thereto and all other property held by it under this
Agreement on behalf of each applicable Fund and to transfer to an account of
such successor custodian all the securities of each such Fund held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect.
SECTION 11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and
the Trust on behalf of each of the Funds, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Agreement as
may in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Trust Instrument of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
8
SECTION 12. ADDITIONAL FUNDS
In the event that the Trust establishes one or more series of Shares in
addition to the Funds with respect to which it desires to have the Custodian
render services as custodian under the terms hereof, it shall so notify the
Custodian in writing, and if the Custodian agrees in writing to provide such
services, such series of Shares shall become a Fund hereunder.
SECTION 13. CALIFORNIA LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with laws of State of California.
SECTION 14. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all
prior Agreements between the Trust on behalf of each of the Funds and the
Custodian relating to the custody of the Trust's assets.
SECTION 15. MISCELLANEOUS
15.1 The Custodian agrees to treat all records and other information
relative to the Trust and its prior, present or potential Shareholders
confidentially and the Custodian on behalf of itself and its employees
agrees to keep confidential all such information, except after prior
notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld. The preceding notwithstanding, in
the event legal process is served upon the Custodian requiring certain
disclosure, the Custodian may divulge such information. In such event,
the Custodian shall, if legally permissible, advise the Trust of its
receipt of such legal process.
15.2 Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund of the Trust are
separate and distinct from the assets and liabilities of each other
Fund and that no Fund shall be liable or shall be charged for any debt,
obligation or liability or any other Fund, whether arising under the
Agreement or otherwise.
15.3 The provisions of this Section 15, Sections 7, 8, 13 and 16, and
Section 2.19, and any other rights or obligations incurred or accrued
by any party hereto prior to termination of this Agreement shall
survive any termination of this Agreement.
SECTION 16. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND
SHAREHOLDERS OFFICERS, EMPLOYEES AND AGENT
A copy of the Trust Instrument of the Trust is on file with the
Secretary of the Trust. The parties agree that neither the Shareholders,
Trustees, officers, employees nor any agent of the Trust shall be liable
hereunder and that the parties to this Agreement other than the Trust shall look
solely to the Trust property for the performance of this Agreement or payment of
any claim under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
ATTEST MONARCH FUNDS
By:/s/ Xxxxx X. Xxxxxxxxx By:/s/ Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
Vice President and Secretary President
ATTEST UNION BANK OF
CALIFORNIA, N.A.
By: By:
Title: Title:
9
MONARCH FUNDS
CUSTODIAN AGREEMENT FEE ARRANGEMENT
as of May 7, 1999
WHEREAS, Monarch Funds, a business trust organized under the laws of
the State of Delaware, having its principal place of business at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Trust") and Union Bank of California, a
national association, having its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Custodian") have entered into a
Custodian Agreement dated the 7th day of May, 1999, (the "Agreement"); and
WHEREAS, Section 7 of the Agreement provides that the Custodian shall
be entitled to reasonable compensation for its services and expenses as
Custodian, as agreed upon from time to time between the Trust on behalf of each
Fund of the Trust and the Custodian;
NOW THEREFORE, in consideration of the services to be provided by the
Custodian under the Agreement, the Trust and the Custodian agree that the Trust
shall pay the Custodian, with respect to Treasury Cash Fund, Government Cash
Fund and Cash Fund (each a "Fund"), the following fees:
Fee as a % of
Fund Annual Average Daily Net Assets
Total of All Funds 0.025% of the first $1.5 billion, 0.020% of the next
$1.0 billion and 0.015% of the balance
Such fees shall be accrued by the Trust daily and payable monthly in arrears on
the first day of the next month, however, no fee shall be payable hereunder with
respect to a Fund during any period in which the Fund invests all (or
substantially all) of its investment assets in a registered, open-end management
investment company, or separate series thereof, in accordance with Section
12(d)(1)(E) under the Act.
ATTEST MONARCH FUNDS
By: /s/ Xxxxx X. Xxxxxxxxx By:/s/Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
Vice President and Secretary President
ATTEST UNION BANK OF
CALIFORNIA, N.A.
By: By:
Title: Title:
