Exhibit 23(g)(4)
CUSTODY AGREEMENT
This AGREEMENT, dated as of June 18, 2002, by and between the TUSCARORA
INVESTMENT TRUST (the "Trust"), a business trust organized under the laws of the
State of Massachusetts, acting for and on behalf of each separate portfolio
series listed on Appendix A hereto, as such Appendix may be amended from time to
time (each a "Fund"), and U.S. BANK, N.A., (the "Custodian").
W I T N E S S E T H:
--------------------
WHEREAS, the Trust desires that each Fund's Securities and cash be held and
administered by the Custodian pursuant to this Agreement;
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(1) of the 1940 Act.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1.1 "Authorized Person" means any Officer or other person duly authorized
by resolution of the Board of Trustees to give Oral Instructions and Written
Instructions on behalf of a 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 Agreement and Declaration of Trust, as from time to time
amended.
1.3 "Book-Entry System" shall mean a federal book-entry system as provided
in Subpart O
1
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 Foreign Custodian" shall have the meaning assigned thereto in
Rule 17f-5 (and shall include any entity qualifying as such pursuant to an
exemption, rule or other appropriate action of the U.S. Securities and Exchange
Commission (the "SEC")).
1.6 "Eligible Securities Depository" shall have the meaning assigned
thereto in Rule 17f-7 (and shall include any entity qualifying as such pursuant
to an exemption, rule or other appropriate action of the SEC).
1.7 "Eligible Contract" shall mean a currently effective written contract
between the Custodian and any Sub-Custodian satisfying the requirements of
paragraph (c)(2)(i) of Rule 17f-5 (including any amendments thereto or successor
provisions). The contract may contain, in lieu of any or all of the provisions
of Rule 17f-5(c)(2)(i), other provisions that the Foreign Custody Manager
determines will provide, in their entirety, the same or a greater level of care
and protection for the Foreign Assets as the specified provision, in their
entirety.
1.8 "Foreign Assets" shall have the meaning assigned thereto under Rule
17f-5, which, as of the date hereof, means any investments (including foreign
currencies) for which the primary market is outside the United States, and any
cash and cash equivalents that are reasonably necessary to effect transactions
in those investments.
1.9 "Foreign Custody Manager" shall have the meaning assigned thereto in
Rule 17f-5 (and shall include any entity qualifying as such pursuant to an
exemption, rule or other appropriate action of the SEC).
1.10 "Fund Custody Account" shall mean any of the accounts in the name of
the Trust coupled with the name of a Fund, which is provided for in Section 3.2
below.
1.11 "NASD" shall mean The National Association of Securities Dealers, Inc.
2
1.12 "Officer" shall mean the Chairman, President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer,
or any Assistant Treasurer of the Trust.
1.13 "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, which 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.
1.14 "Proper Instructions" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
1.15 "Rule 17f-5" shall mean Rule 17f-5 under the 1940 Act, including any
amendments thereto or any successor rules thereof.
1.16 "Rule 17f-7" shall mean Rule 17f-7 under the 1940 Act, including any
amendments thereto or any successor rules thereof.
1.17 "Securities" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank certificates
of deposit, bankers' acceptances, mortgage-backed securities or other
obligations, and any certificates, receipts, warrants or other instruments or
documents representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or any similar
property or assets that the Custodian has the facilities to clear and to
service.
1.18 "Shares" shall mean, with respect to a Fund, the units of beneficial
interest issued by the Trust on account of the Fund.
1.19 "Sub-Custodian" shall mean and include any Eligible Foreign Custodian
with which the Custodian maintains an Eligible Contract.
3
1.20 "U.S. Securities Depository" shall mean The Depository Trust Company
and (provided that Custodian shall have received a copy of a resolution of the
Board of Trustees, certified by an Officer, specifically approving the use of
such clearing agency as a depository for a Fund) any other clearing agency
registered with the SEC under Section 17A of the Securities and Exchange Act of
1934 as amended (the "1934 Act"), which acts as a system for the central
handling of Securities where all Securities of any particular class or series of
an issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of the
Securities.
1.21 "Written Instructions" shall mean (i) written communications actually
received by the Custodian, signed by an Authorized Person, and reasonably
believed by the Custodian to have been delivered by an Authorized Person, or
(ii) communications by telex or any other such system from one or more persons
reasonably believed by the Custodian to be Authorized Persons, or (iii)
communications between electro-mechanical or electronic devices from one or more
persons reasonably believed by the Custodian to be Authorized Persons, and
provided that the use of such devices and the procedures for the use thereof
shall have been approved by resolutions of the Board of Trustees, a copy of
which, certified by an Officer, shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby constitutes and appoints the Custodian as
custodian of all Securities and cash owned by or in the possession of each Fund
at any time during the period of this Agreement.
2.2 Acceptance. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
2.3 Documents to be Furnished. The following documents, including any
amendments thereto, will be provided contemporaneously with the execution of the
Agreement to the Custodian by the Trust:
(a) A copy of the Agreement and Declaration of Trust certified by the
Secretary of the Trust;
4
(b) A copy of the By-Laws of the Trust certified by the Secretary of
the Trust;
(c) A copy of the resolution of the Board of Trustees appointing the
Custodian, certified by the Secretary of the Trust;
(d) A copy of the then current Prospectus of each Fund; and
(e) A certification of the Chairman and the Secretary of the Trust
setting forth the names and signatures of the current Officers of the
Trust and other Authorized Persons.
2.4 Notice of Appointment of Dividend and Transfer Agent. The Trust agrees
to notify the Custodian in writing of the appointment, termination or change in
appointment of any Dividend and Transfer Agent of a 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 a Fund (other than Securities maintained in a U.S. Securities
Depository or Book-Entry System) shall be physically segregated from other
Securities and non-cash property in the possession of the Custodian and shall be
identified as belonging to such Fund pursuant 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 Delivery of Assets to Custodian. The Trust shall deliver, or cause to
be delivered, to the Custodian all of a Fund's Securities, cash and other assets
(other than Foreign Assets, as discussed in Article IV below), including (a) all
payments of income, payments of principal and capital distributions received by
the Fund with respect to such Securities, cash or other assets owned by the Fund
at any time during the period of this Agreement, and (b) all cash received by
the Fund for the issuance, at any time during such period, of Shares. The
Custodian shall not be responsible for such Securities, cash, or other assets
until actually received by it.
5
3.4 U.S. Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of a Fund in a U.S. Securities Depository or
in a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Fund in any U.S.
Securities Depository or Book-Entry System, the Trust shall deliver to the
Custodian a resolution of the Board of Trustees, certified by an Officer,
authorizing and instructing the Custodian on an on-going basis to deposit in
such U.S. Securities Depository or Book-Entry System all Securities eligible for
deposit therein and to make use of such U.S. 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 U.S.
Securities Depository shall be kept in an account ("Depository Account") of the
Custodian in such Book-Entry System or U.S. 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 U.S. Securities Depository shall, by
book-entry, identify such Securities as belonging to such Fund.
(d) If Securities purchased by the Fund are to be held in a Book-Entry
System or U.S. Securities Depository, the Custodian shall pay for such
Securities upon (i) receipt of advice from the Book-Entry System or U.S.
Securities Depository that such Securities have been transferred to the
Depository Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of such Fund. If
Securities sold by the Fund are held in a Book-Entry System or U.S. Securities
Depository, the Custodian shall transfer such Securities upon (i) receipt of
advice from the Book-Entry System or U.S. Securities Depository that payment for
such Securities has been transferred to the Depository Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of such Fund.
(e) The Custodian shall promptly provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry System or U.S. Securities
Depository in which Securities of the Fund are kept) on the internal accounting
controls and procedures for safeguarding U.S. Securities deposited in such
Book-Entry System or U.S. Securities Depository.
(f) Notwithstanding anything to the contrary in this Agreement, the
Custodian shall be liable to the Trust for any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability or claim to the Fund
resulting (i) from the use of a Book-Entry System or U.S. Securities
6
Depository by reason of any negligence, bad faith or willful misconduct on the
part of the Custodian or any of its employees, or (ii) from failure of the
Custodian to enforce effectively such rights as it may have against a Book-Entry
System or U.S. 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 U.S. Securities Depository or any other person from any
loss or damage to the Fund arising from the use of such Book-Entry System or
U.S. Securities Depository, if and to the extent that the Fund has not been made
whole for any such loss or damage.
3.5 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 a Fund, but only in accordance
with Section 5.1 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 of such Securities registered as provided
in Section 3.8 below or in proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or U.S. Securities
Depository, in accordance with the conditions set forth in Section 3.4 above;
(ii) in the case of options on Securities, against delivery to the Custodian of
such receipts as are required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian of evidence of title thereto in
favor of the Fund or any nominee referred to in Section 3.8 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 U.S. Securities
Depository with such Securities;
(b) In connection with conversion, exchange or surrender, as set forth
in Section 3.6;
(c) For the payment of any dividends or capital gain distributions
declared by a Fund;
(d) In payment of the redemption price of Shares as provided in
Section 6.1 below;
(e) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the account of such
Fund: interest; taxes; administration, investment advisory, accounting,
auditing, transfer agent, custodian, Trust 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
7
or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under the 1934 Act
and a member of the NASD, relating to compliance with rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by a Fund;
(g) For transfer in accordance with the provision of any agreement
among the Trust, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in connection with
transactions by a Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including the Custodian),
which deposit or account has a term of one year or less; and
(i) For any other proper purpose, but only upon receipt, in addition
to Proper Instructions, of a copy of a resolution of the Board of Trustees,
certified by an Officer, specifying the amount and purpose of such payment,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
3.6 Delivery of Securities from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from the
Fund Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of a Fund, but only
against receipt of payment therefor in cash, by certified or cashiers check or
bank credit;
(b) In the case of a sale effected through a Book-Entry System or U.S.
Securities Depository, in accordance with the provisions of Section 3.4 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of a Fund; provided that, in any such case,
the cash or other consideration is to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name
of a Fund, the Custodian, or of any nominee or nominees of any of the foregoing,
or (ii) for exchange for a different number of certificates or other evidence
representing the same aggregate face amount or number of units;
8
provided that, in any such case, the new Securities are to be delivered to the
Custodian;
(e) To the broker selling Securities, for examination in accordance
with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or readjustment of the issuer of
such Securities, or pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement, including surrender or receipt
of underlying Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new Securities and
cash, if any, are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by a Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities, and cash,
if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of a Fund,
but only against receipt of such collateral as the Trust shall have specified to
the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by a
Fund requiring a pledge of assets by the Trust, but only against receipt by the
Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Trust;
(l) For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under the 1934 Act
and a member of the NASD, relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by a Fund;
(m) For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in connection with
transactions by a Fund; or
(n) For any other proper corporate purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the Board of
Trustees, certified by an Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
3.7 Actions Not Requiring Proper Instructions. Unless otherwise instructed
by the Trust, the
9
Custodian shall with respect to all Securities held for a Fund:
(a) Subject to Section 8.4 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 8.4 below, collect on
a timely basis the amount payable upon all Securities which may mature or be
called, redeemed, or retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates
of ownership under the federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect, and prepare and submit
reports to the Internal Revenue Service ("IRS") and to the 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 U.S. Securities Depository, all
rights and similar securities issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in connection with the
sale, exchange, substitution, purchase, transfer and other dealings with
Securities and assets of the Fund.
3.8 Registration and Transfer of Securities. All Securities held for a 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 a Fund may be
registered in the name of such Fund, the Custodian, or in the name of any
nominee of any of them, or in the name of a Book-Entry System, a U.S. Securities
Depository or any nominee of either thereof. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of any of the nominees
hereinabove referred to or in the name of a Book-Entry System or U.S. Securities
Depository, any Securities registered in the name of a Fund.
3.9 Records. The Custodian shall maintain complete and accurate records
with respect to Securities, cash or other property held for a 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
10
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 each 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. All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with rules and
regulations of the SEC, (ii) be the property of the Trust and at all times
during the regular business hours of the Custodian be made available upon
request for inspection by duly authorized officers, employees or agents of the
Trust and employees or agents of the SEC, and (iii) if required to be maintained
by Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in
Rule 31a-2 under the 0000 Xxx.
3.10 Fund Reports by Custodian. The Custodian shall furnish the Trust with
a daily activity statement and a summary of all transfers to or from each Fund
Custody Account on the day following such transfers. At least monthly and from
time to time, the Custodian shall furnish the Trust with a detailed statement of
the Securities and moneys held by the Custodian for a Fund under this Agreement.
3.11 Other Reports by Custodian. The Custodian shall provide the Trust with
such reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities, which
are employed by the Custodian.
3.12 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of a Fund, to be
promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities.
3.13 Information on Corporate Actions. The Custodian shall promptly deliver
to the Trust all information received by the Custodian and pertaining to
Securities being held by a Fund with respect to optional tender or exchange
offers, calls for redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Exhibit B. If the Trust desires to
take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant information for
any Security which has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
ARTICLE IV
CUSTODY OF FOREIGN ASSETS
4.1 Appointment as Foreign Custody Manager. The Trust hereby appoints the
Custodian as
11
its Foreign Custody Manager for each Fund in accordance with Rule 17f-5. The
Custodian hereby accepts such appointment. The Trust and the Custodian shall act
in conformity with Rule 17f-5 (including any amendments thereto or successor
provisions thereof) for so long as the Custodian acts as the Trust's Foreign
Custody Manager.
4.2 Sub-Custodians. In its discretion, the Custodian may appoint one or
more Sub-Custodians to act as an Eligible Foreign Custodian, provided that the
appointment of any such Sub-Custodian and maintenance of any Foreign Assets
shall be at the Custodian's expense and shall not relieve the Custodian of any
of its obligations or liabilities under this Agreement, and provided further
that:
(a) The Custodian has determined that the Sub-Custodian will provide
reasonable care for the Trust's assets based on the standards set forth in Rule
17f-5(c)(1);
(b) Any agreement between the Custodian and a Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule 17f-5(c)(2);
(c) Where Foreign Assets are deposited by a Sub-Custodian with an
Eligible Securities Depository, the Custodian shall cause the Sub-Custodian to
identify on its books as belonging to Custodian, as agent, the Foreign Assets
shown on the Sub-Custodian's account on the books of such Eligible Securities
Depository;
(d) The Custodian shall provide written reports in a form reasonably
acceptable to the Trust notifying the Board of Trustees of the placement of the
Foreign Assets with a particular Sub-Custodian and of any material changes in
the Trust's Foreign Asset custody arrangements, with the reports to be provided
to the Board of Trustees at such times as the Board of Trustees deems reasonable
and appropriate based on the circumstances of the Trust's Foreign Asset custody
arrangements; and
(e) The Custodian shall promptly notify the Trust in the event that
any Sub-Custodian has ceased to meet the requirements of Rule 17f-5, and the
Custodian shall take such steps as may be required to ensure that each Fund
withdraws its Foreign Assets from such Sub-Custodian as soon as reasonably
practicable.
4.3 Standard of Care. With respect to its responsibilities under this
Article IV, 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,
based on the standards applicable to custodians in the relevant market, 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, internal controls, method of keeping
custodial records, and 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 Sub-Custodian that uses an
12
Eligible Securities Depository, the Eligible Securities Depository's operating
history and number of participants; and (iv) whether the Trust 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.
4.4 Monitoring of Sub-Custodians. The Custodian shall establish and
maintain throughout the term of this Agreement a system reasonably designed to
monitor the appropriateness of maintaining Fund assets with a particular
Sub-Custodian and the contract governing the Custodian's arrangements with each
Sub-Custodian.
4.5 Use of Eligible Securities Depositories. To the extent that either the
Custodian or any Sub-Custodian may place and maintain a Fund's Foreign Assets
with an Eligible Securities Depository, and in accordance with Rule 17f-7, the
Custodian shall:
(a) Ensure that the relevant custody arrangement provides reasonable
safeguards against the custody risks associated with maintaining assets with the
Eligible Securities Depository;
(b) Provide the Trust with an analysis of the custody risks associated
with maintaining a Fund's Foreign Assets with each applicable Eligible
Securities Depository at which any Foreign Assets are held or are expected to be
held, and such other information regarding a Fund's Foreign Assets as the Trust
may reasonably request;
(c) Monitor the custody risks associated with maintaining a Fund's
Foreign Assets at each such Eligible Securities Depository on a continuing
basis, and shall promptly notify the Trust of any material changes in such
risks;
(d) Take such steps as may be required to ensure that each Fund
withdraws its Foreign Assets from such depository as soon as reasonably
practicable, in the event that a custody arrangement with an Eligible Securities
Depository no longer meets the requirements of Rule 17f-7; and
(e) Exercise reasonable care, prudence, and diligence in performing
its obligations under this Section 4.5.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
5.1 Purchase of Securities. Promptly upon each purchase of Securities for a
Fund, Written Instructions shall be delivered to the Custodian, specifying (a)
the name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any) or other units purchased, (c) the date of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, and (f) the name of the person to whom such amount is payable.
The Custodian shall, upon receipt of such Securities purchased by such Fund,
13
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.
5.2 Liability for Payment in Advance of Receipt of Securities Purchased.
Notwithstanding Section 3.5 above, in any and every case where payment for the
purchase of Securities for the Fund is made by the Custodian in advance of
receipt of the Securities purchased but in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to the Fund for
such Securities to the same extent as if the Securities had been received by the
Custodian.
5.3 Sale of Securities. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying (a) the
name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale and settlement, (d)
the sale price per unit, (e) the total amount payable upon such sale, and (f)
the person to whom such Securities are to be delivered. Upon receipt of the
total amount payable to such 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.
5.4 Delivery of Securities Sold. Notwithstanding any other provision of
this Agreement, the Custodian, when instructed to deliver Securities against
payment, shall be entitled, to the extent required by 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.
5.5 Payment for Securities Sold, etc. In its sole discretion and from time
to time, the Custodian may credit the Fund Custody Account, prior to actual
receipt of final payment for Securities sold for a Fund, 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 such Fund,
and (iii) income from cash, Securities or other assets of such Fund. Any such
credit shall be conditional upon actual receipt by the Custodian of final
payment and may be reversed if final payment is not actually received in full.
The Custodian may, in its sole discretion and from time to time, permit the Fund
to use funds so credited to the Fund Custody Account in anticipation of actual
receipt of final payment. Any such funds shall be repayable immediately upon
demand made by the Custodian at any time prior to the actual receipt of all
final payments in anticipation of which funds were credited to the Fund Custody
14
Account.
5.6 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 VI
REDEMPTION OF FUND SHARES
6.1 Transfer of Funds. From such funds as may be available for the purpose
in the relevant Fund Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares of a Fund, the Custodian
shall wire each amount specified in such Proper Instructions to or through such
bank as the Trust may designate with respect to such amount in such Proper
Instructions.
6.2 No Duty Regarding Paying Banks. The Custodian shall not be under any
obligation to effect payment or distribution by any bank designated in Proper
Instructions given pursuant to Section 6.1 above of any amount paid by the
Custodian to such bank in accordance with such Proper Instructions.
ARTICLE VII
SEGREGATED ACCOUNTS
7.1 Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of a Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) In accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the 1934 Act and a
member of the NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by a Fund,
(b) For purposes of segregating cash or Securities in connection with
securities options purchased or written by a Fund or in connection with
financial futures contracts (or options thereon) purchased or sold by a Fund,
which constitute collateral for loans of Securities made by the Fund,
(c) For purposes of compliance by a Fund with requirements under the
1940 Act for the maintenance of segregated accounts by registered investment
companies in connection with reverse repurchase agreements and when-issued,
delayed delivery and firm commitment transactions, and
15
(d) For other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Trustees, certified by an Officer, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper corporate
purposes. Each segregated account established under this Article VI shall be
established and maintained for a single Fund only. All Proper Instructions
relating to a segregated account shall specify the Fund involved.
ARTICLE VIII
CONCERNING THE CUSTODIAN
8.1 Standard of Care. Except as otherwise provided in this Agreement, the
Custodian shall use its best efforts and shall act in good faith in carrying out
its obligations under this Agreement, and shall be without liability to the
Trust or a Fund for any loss, damage, cost, expense (including attorneys' fees
and disbursements), liability or claim unless such loss, damage, cost, expense,
liability or claim arises from negligence, bad faith or willful misconduct on
its part or on the part of any Sub-Custodian appointed pursuant to Section 4.2
above. The Custodian shall be entitled to rely on and may act upon advice of
counsel on all matters, and shall be without liability (except in the case of
negligence, bad faith or willful misconduct) 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.
The Custodian shall not be under any obligation at any time to ascertain whether
the Trust or a Fund is in compliance with the 1940 Act, the regulations
thereunder, the provisions of the Trust's charter documents or By-Laws, or its
investment objectives and policies as then in effect.
8.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to a Fund or any money
represented by a check, draft or other instrument for the payment of money,
until the Custodian or its agents actually receive such cash or collect on such
instrument.
8.3 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.
8.4 Limitation on Duty to Collect. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for a Fund if such Securities are in
default or payment is not made after due demand or presentation.
8.5 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.
16
8.6 Express Duties Only. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
8.7 Co-operation. 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 a Fund and/or compute the value of the assets of a Fund. The
Custodian shall take all such reasonable actions as the Trust may from time to
time request to enable the Trust to obtain, from year to year, favorable
opinions from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the preparation of the
Trust's reports on Form N-1A and Form N-SAR and any other reports required by
the Securities and Exchange Commission, and (b) the fulfillment by the Trust of
any other requirements of the Securities and Exchange Commission.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Trust. The Trust shall indemnify and hold harmless
the Custodian from and against any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability (including, without limitation,
liability arising under the Securities Act of 1933, the 1934 Act, the 1940 Act,
and any state or foreign securities and/or banking laws) or claim arising
directly or indirectly (a) from the fact that Securities are registered in the
name of a nominee, (b) from any action (or inaction) taken by the Custodian or
any Sub-Custodian appointed pursuant to Section 4.2 above in reliance upon
Proper Instructions, or (c) generally, from the performance of its obligations
under this Agreement, provided that the Custodian shall not be indemnified and
held harmless from and against any such loss, damage, cost, expense, liability
or claim arising from the Custodian's or any Sub-Custodian's negligence, bad
faith or willful misconduct. The indemnification herein shall survive the
termination of this agreement.
9.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Trust from and against any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability (including without limitation,
liability arising under the Securities Act of 1933, the 1934 Act, the 1940 Act,
and any state or foreign securities and/or banking laws) or claim arising
directly or indirectly from (a) the negligence, bad faith or willful misconduct
of the Custodian or any Sub-Custodian appointed pursuant to Section 4.2 above,
or any nominee of the Custodian or of such Sub-Custodian, (b) any failure of
Custodian or any Sub-Custodian appointed pursuant to Section 4.2 above, or any
nominee of the Custodian or of such Sub-Custodian to comply with the terms of
this Agreement, or (c) any violation of law by Custodian or any Sub-Custodian
appointed pursuant to Section 4.2 above, or any nominee of the Custodian or of
such Sub-Custodian relating to the performance of such person's obligations
under this
17
Agreement. The indemnification provided for herein shall survive the termination
of this agreement.
9.3 Indemnity to be Provided. If the Trust requests the Custodian to take
any action with respect to Securities, which may, in the opinion of the
Custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian shall
not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
9.4 Security. If the Custodian advances cash or Securities to a Fund for
any purpose, either at the Trust's request or as otherwise contemplated in this
Agreement, or in the event that the Custodian or its nominee incurs, in
connection with its performance under this Agreement, any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim
(except such as may arise from its or its nominee's negligence, bad faith or
willful misconduct), then, in any such event, any property at any time held for
the account of such Fund shall be security therefor, and should such Fund fail
promptly to repay or indemnify the Custodian, the Custodian shall be entitled to
utilize available cash of the Fund and to dispose of other assets of the Fund to
the extent necessary to obtain reimbursement or indemnification.
ARTICLE X
FORCE MAJEURE; DISASTER RECOVERY SYSTEMS
10.1 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; terrorist
attacks; earthquakes; fires; floods; wars; civil or military disturbances;
sabotage; strikes; epidemics; riots; power failures; computer failure and any
such circumstances beyond its reasonable control as may cause interruption, loss
or malfunction of utility, transportation, computer (hardware or software) or
telephone communication service; accidents; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation; provided, however, that the Custodian in
the event of a failure or delay (i) shall not discriminate against the Fund in
favor of any other customer of the Custodian in making computer time and
personnel available to input or process the transactions contemplated by this
Agreement and (ii) shall use its best efforts to ameliorate the effects of any
such failure or delay.
10.2 Disaster Recovery Systems. The Custodian shall maintain a disaster
recovery plan and procedures including provisions for emergency use of
electronic data processing equipment, which is reasonable in light of the
services to be provided. The Custodian shall, at no additional expense to the
Trust or any Fund, take reasonable steps to minimize service interruptions. The
Custodian shall have no
18
liability with respect to the loss of data or service interruptions caused by
equipment failure, provided it maintains such plans and procedures.
ARTICLE XI
EFFECTIVE PERIOD; TERMINATION
11.1 Effective Period. This Agreement shall become effective as of its
execution or when a Fund commences operations and shall continue in full force
and effect until terminated as hereinafter provided.
11.2 Termination. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than thirty (30) days after the date of the
giving of such notice. If a successor custodian shall have been appointed by the
Board of Trustees, the Custodian shall, upon receipt of a notice of acceptance
by the successor custodian, on such specified date of termination (a) deliver
directly to the successor custodian all Securities (other than Securities held
in a Book-Entry System or U.S. Securities Depository) and cash then owned by a
Fund and held by the Custodian as custodian, and (b) transfer any Securities
held in a Book-Entry System or U.S. Securities Depository to an account of or
for the benefit of the Funds 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. Upon such delivery
and transfer, the Custodian shall be relieved of all obligations under this
Agreement. The Trust may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the Custodian by
regulatory authorities or upon the happening of a like event at the direction of
an appropriate regulatory agency or court of competent jurisdiction.
11.3 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Trust on or before the date of termination specified
pursuant to Section 11.1 above, then the Custodian shall have the right to
deliver to a bank or Trust company of its own selection, which (a) is a "bank"
as defined in the 1940 Act and (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not less than $25
million, all Securities, cash and other property held by Custodian under this
Agreement and to transfer to an account of or for the Funds at such bank or
Trust company all Securities of the Funds held in a Book-Entry System or U.S.
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.
19
ARTICLE XII
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time to time
by the Trust and the Custodian. The fees and other charges in effect on the date
hereof and applicable to the Fund are set forth in Exhibit C attached hereto.
ARTICLE XIII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but shall bind only the property of the Trust
as provided in the Trust's Agreement and Declaration of Trust, as from time to
time amended. The execution and delivery of this Agreement have been authorized
by the Trust, and this Agreement has been signed and delivered by an authorized
officer of the Trust, acting as such, and neither such authorization by the
Trust nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the property of the Trust as provided in the
above-mentioned Trust's Agreement and Declaration of Trust.
ARTICLE XIV
NOTICES
Unless otherwise specified herein, all demands, notices, instructions, and other
communications to be given hereunder shall be in writing and shall be sent or
delivered to the recipient at the address set forth after its name herein below:
To the Trust:
Xxx Xxxxx Capital Management, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, X.X. 00000
Attention: President
To Custodian:
U.S. Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Institutional Trust & Custody
Telephone: (513) 632-___
20
Facsimile: (262) 790-____
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIV. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal, and magnetic tape.
ARTICLE XV
MISCELLANEOUS
15.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15.2 References to Custodian. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, 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.
15.3 No Waiver. No failure by either party hereto to exercise, and no delay
by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
15.4 Amendments. This Agreement cannot be changed orally and no amendment
to this Agreement shall be effective unless evidenced by an instrument in
writing executed by the parties hereto.
15.5 Confidentiality. All books, records, information and data pertaining
to the business of another party hereto, including but not limited to names and
addresses of Fund shareholders, which are exchanged or received hereunder shall
be kept confidential and shall not be used or voluntarily disclosed to any other
person, except as may be permitted hereunder or as required by law. This
provision shall not apply to information lawfully in the possession of a party
prior to the term hereof, lawfully obtained from other sources or independently
developed by a party without reference to or reliance on information obtained
from another party hereto. If, in accordance with the SEC's Regulation S-P,
"non-public personal information" regarding either party's "customers" or
"consumers" (as those terms are defined in Regulation S-P) is disclosed to the
other party in connection with this Agreement, then the party receiving such
information will not disclose or use such information other than as necessary to
carry out the
21
purposes of this Agreement. The provisions herein shall survive the termination
of this Agreement.
15.6 Representations and Warranties. The Trust hereby represents and
warrants to the Custodian that (a) it has full power and authority to deposit
and control the Securities, cash and other assets deposited in the Fund Custody
Accounts; (b) it has all necessary authority to use the Custodian as its
custodian; (c) this Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms; and (d) it has taken all
actions necessary to authorize the execution and delivery of this Agreement. The
Custodian hereby represents and warrants to the Trust that (v) it is a bank
having the qualifications prescribed in Section 26(a)(1) of the 1940 Act; (w)
its is a "U.S. Bank" as that term is defined under Rule 17f-5; (x) it has full
power and authority to perform its obligations hereunder; (y) this Agreement
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms; and (z) it has taken all actions necessary to authorize the
execution and delivery of this Agreement. The Custodian further represents and
warrants to the Trust that it has in place policies and procedures to prevent
and deter money laundering as are required under applicable law, including any
rules promulgated thereunder by governmental agencies and self-regulatory
agencies having jurisdiction or authority, that it will comply with such
policies and procedures and all applicable law, and that it will cooperate and
assist the Trust in its efforts to prevent and deter money laundering. The Trust
further represents and warrants to the Custodian that it has in place policies
and procedures to prevent and deter money laundering as are required under
applicable law, including any rules promulgated thereunder by governmental
agencies and self-regulatory agencies having jurisdiction or authority, that it
will comply with such policies and procedures and all applicable law.
15.7 Several Obligations of Each Fund. With respect to any obligations of a
Fund arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any such obligation solely to the assets and property of such
Fund to which such obligation relates as though that Fund had separately
contracted with the Custodian.
15.8 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
15.9 Severability. If any provision of this Agreement shall be invalid,
illegal, or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
15.10 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
22
15.11 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: THE TUSCARORA INVESTMENT TRUST
By: /s/ XXXXXXX X. XXXXX
----------------------------------- -----------------------------------
Xxxxxxx X. Xxxxx
Vice President
ATTEST: U.S. BANK, N.A.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------- -----------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------
Title: Senior Vice President
----------------------------
23
APPENDIX A
LIST OF FUNDS
(DATED AS OF JUNE 18, 2002)
Set forth below is a list of the separate portfolio series of the Trust for
which the Custodian shall serve under this Agreement.
Xxx Xxxxx Fund
24
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
President: ___________________
Secretary: ___________________
Treasurer: ___________________
Vice President: ___________________
Adviser Employees: ___________________
___________________
Transfer Agent/Fund Accountant
Employees: ___________________
___________________
___________________
___________________
___________________
25
EXHIBIT B
U.S. BANK INSTITUTIONAL TRUST &CUSTODY SERVICES
STANDARDS OF SERVICE GUIDE
August, 2001
U.S. Bank, N.A. is committed to providing superior quality service to all
customers and their agents at all times. We have compiled this guide as a tool
for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for U.S. Bank, N.A. to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, U.S. Bank, N.A. will make every effort to
complete all processing on a timely basis.
U.S. Bank, N.A. is a direct participant of the Depository Corporation
Company, a direct member of the Federal Reserve Bank of Cleveland, and utilizes
the Bank of
New York as its agent for ineligible and foreign securities.
For corporate reorganizations, U.S. Bank, N.A. utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, U.S. Bank, N.A. utilizes SEI's Bond
Source, Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and
DTC Important Notices. U.S. Bank, N.A. will not notify clients of optional put
opportunities.
Any securities delivered free to U.S. Bank, N.A., or its agents must be
received three (3) business days prior to any payment or settlement in order for
the U.S. Bank, N.A. standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
THE INFORMATION CONTAINED IN THIS STANDARDS OF SERVICE GUIDE IS
SUBJECT TO CHANGE. SHOULD ANY CHANGES BE MADE U.S. BANK, N.A. WILL
PROVIDE YOU WITH AN UPDATED COPY OF ITS STANDARDS OF SERVICE GUIDE.
26
U.S. BANK, N.A. SECURITY SETTLEMENT STANDARDS
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
---------------- ----------------------- ---------------------
DTC 1:30 P.M. on Settlement Date DTC Participant #0000
Xxxxx Xxxx XX 00000
Institutional #________________
For Account #____________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cleveland
for U.S. Bank, N.A. ABA# 000000000
XXXXX/1050
For Account #_____________
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date Federal Reserve Bank of Cleveland
Agreement Collateral Only) for U.S. Bank, N.A. ABA# 000000000
XXXXX/1040
For Account #_____________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BYORK
(GNMA Book Entry) U.S. Bank N.A. / 117612
Physical Securities 9:30 A.M. EST on Settlement Date Bank of New York
(for Deliveries, by 4:00 P.M. on Xxx Xxxx Xxxxxx - 0xx Xxxxx - Xxxxxx X
Settlement Date minus 1) Xxx Xxxx, XX 00000
For account of U.S. Bank, N.A./Cust #117612
Attn: Xxxxxx Xxxxxx
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Date Cedel a/c 55021
minus 2 FFC: a/c 387000
U.S. Bank, N.A./Global Omnibus
Euroclear a/c 97816
FFC: a/c 387000
U.S. Bank, N.A./Global Omnibus
Cash Wire Transfer 3:00 P.M. U.S. Bank,X.X. Xxxxx/Trust ABA# 000000000
Credit Account #112950027
27
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
---------------- ----------------------- ---------------------
Account of U.S Bank, N.A. Trust Services
Further Credit to ___________
Account # _______________
* All times listed are Eastern Standard Time.
28
U.S. BANK, N.A. PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
------------- ------ ---------
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment
will be made on the immediately following business day.
29
U.S. BANK CORPORATE REORGANIZATION STANDARDS
DEADLINE FOR CLIENT
INSTRUCTIONS TRANSACTION
TYPE OF ACTION NOTIFICATION TO CLIENT TO U.S. BANK, N.A. POSTING
-------------- ---------------------- ------------------ -------
Rights, Warrants, Later of 10 business days prior to 5 business days prior to Upon receipt
and Optional Mergers expiration or receipt of notice expiration
Mandatory Puts with Later of 10 business days prior to 5 business days prior to Upon receipt
Option to Retain expiration or receipt of notice expiration
Class Actions 10 business days prior to 5 business days prior to Upon receipt
expiration date expiration
Voluntary Tenders,
Exchanges, Later of 10 business days prior to 5 business days prior to Upon receipt
and Conversions expiration or receipt of notice expiration
Mandatory Puts, At posting of funds or securities None Upon receipt
Defaults, received
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.
30
EXHIBIT C
US BANK INSTITUTIONAL CUSTODY
PROPOSED DOMESTIC CUSTODY FEE SCHEDULE
FOR THE TRUST
US Bank Institutional Custody, as Custodian, will receive monthly
compensation for services according to the terms of the following Schedule:
I. PORTFOLIO TRANSACTION FEES:
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through DTC or Federal
Reserve - USB affirms each Trade $ 9.00
(c) For each portfolio transaction processed through DTC or Federal
Reserve - Advisor affirms each trade $ 7.50
(d) For each portfolio transaction processed through our
New York
custodian $ 20.00
(e) For each Amortized Security Purchase and sale $ 9.00
(f) For each Amortized Security Prin/Int Paydown $ 8.00
(g) For each covered call option/future contract written, exercised
or expired $ 10.00
(h) For each Cedel/Euro clear transaction $ 80.00
(i) For each Disbursement (Fund expenses only) $ 5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. MARKET VALUE FEE
Based upon an annual rate of: Xxxxxxx
.0000 (0 Xxxxx Xxxxx) on First $100
.000075 (3/4 of 1 Basis Point) on Next $100
.00005 (1/2 of 1 Basis Point) on Balance
III. MONTHLY MINIMUM FEE-PER FUND $300.00
IV. OUT-OF-POCKET EXPENSES
The only out-of-pocket expenses charged to your account will be
shipping fees or transfer fees.
V. XXX DOCUMENTS
Per Shareholder/year to hold each XXX Document $2.50
- U S Bank Institutional Custody retains the right to be reimbursed for
out-of-pocket expenses including, but not limited to postage, insurance and
long distance telephone charges. Other services are available and prices
can be supplied upon request.
- Real Time Internet Access for Bisys and Xxx Xxxxx Fund provided at no
additional charge
31
- This fee schedule is quoted based on exclusive utilization of U S Bank
Money Market Funds, Commercial Paper, Repurchase Agreements or Fed Discount
Notes for investment of short-term cash.
32
US BANK INSTITUTIONAL CUSTODY
PROPOSED DOMESTIC CUSTODY FEE SCHEDULE CONTINUED
FOR THE TRUST
- Earnings Credits generated from collected DDA balances will be offered to
the Xxx Xxxxx Fund as an offset for up to 100% of any monthly Cash
Management fees generated. Any remaining earnings credit balance can be
used as an offset to custody fees within the same month.
- U S Bank Institutional Custody has a reconciliation interface between our
trust system and the Advent Portfolio Accounting System, a system which Xxx
Xxxxx utilizes. We are available to discuss the needs, options and benefits
of such an interface for Xxx Xxxxx.
- It is assumed that very few of the Cash Management Services offered by U S
Bank Institutional Custody (see attached fee schedule) will be needed due
to the relationship maintained between the Xxx Xxxxx Fund and Bisys Fund
Services. We will work to tailor the needs of the fund with Bisys.
33
U S BANK INSTITUTIONAL CUSTODY
CASH MANAGEMENT FEE SCHEDULE
FOR THE TRUST
SERVICES UNIT COST ($) MONTHLY COST ($)
-------- ------------- ----------------
D.D.A. Account Maintenance 17.00
Deposits .42
Deposited Items .119
Checks Paid .16
Balance Reporting - P.C. Access 50.00 Prior Day Module
10.00 Per Account
.07 Per Transaction
60.00 Current Day Module
15.00 Per Account
.07 Per Transaction
ACH Transaction .105
ACH Monthly Maintenance 60.00
ACH Additions, Deletions, Changes 6.00
ACH Stop Payment 5.00
ACH Debits - Received .12
ACH Credits Received .08
Deposited Items Returned 6.00
International Items Returned 10.00
NSF Returned Checks 27.50
Stop Payments 27.50
Data Transmission per account 130.00
Drafts Cleared .18
Lockbox Maintenance 85.00
Lockbox items Processed .38
Miscellaneous Lockbox items .12
Account Reconciliation 60.00
Per Item .06
Positive Pay 75.00
Per Item .015
Invoicing for Service Charge 15.00
Wires Incoming
Domestic 11.00
International 11.00
Wires Outgoing
Domestic International
Repetitive 14.00 Repetitive 35.00
Non-Repetitive 13.00 Non-Repetitive 40.00
PC - Initiated Wires:
Domestic International
Repetitive 10.00 Repetitive 25.00
Non-Repetitive 11.00 Non-Repetitive 25.00
Customer Initiated 9.00
UNCOLLECTED CHARGE U.S. BANK PRIME RATE AS OF FIRST OF MONTH PLUS 4%
OTHER AVAILABLE CASH MANAGEMENT SERVICES ARE PRICED SEPARATELY.
34