CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
______________________
THE XXXXXXX TRUST
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptence; and Furnishing of
Documents
II. A. Appointment of Custodian. 5
II. B. Acceptance of Custodian. 5
II. C. Documents to be Furnished. 5
II. D. Notice of Appointment of Dividend and Transfer 5
Agent.
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys. 6
III. B. Delivery of Securities. 6
III. C. Payments for Shares. 6
III. D. Duties Upon Receipt. 7
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. 7
IV. B. Segregation of Redemption Proceeds. 7
IV. C. Disbursements of Custodian. 8
IV. D. Payment of Custodian Fees. 8
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund. 8
V. B. Segregation of Non-Cash Assets. 9
V. C. Securities in Bearer and Registered Form. 9
V. D. Duties of Custodian as to Securities. 9
V. E. Certain Actions Upon Written Instructions. 10
V. F. Custodian to Deliver Proxy Materials. 11
V. G. Custodian to Deliver Tender Offer Information. 11
V. H. Custodian to Deliver Security and Transaction 12
Information.
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 12
VI. B. Sale of Securities. 13
VI. C. Delivery Versus Payment for Purchases and Sales. 14
VI. D. Payment on Settlement Date. 14
VI. E. Segregated Accounts. 14
VI. F. Advances for Settlement. 16
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings. 17
VII. B. Advances. 18
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 18
VIII. B. Actions not Required by Custodian. 20
VIII. C. No Duty to Collect Amounts Due From Dividend 21
and Transfer Agent.
VIII. D. No Enforcement Actions. 21
VIII. E. Authority to Use Agents and Sub-Custodians. 22
VIII. F. No Duty to Supervise Investments. 22
VIII. G. All Records Confidential. 23
VIII. H. Compensation of Custodian. 23
VIII. I. Reliance Upon Instructions. 23
VIII. J. Books and Records. 24
VIII. K. Internal Accounting Control Systems. 24
VIII. L. No Management of Assets by Custodian. 24
VIII. M. Assistance to Trust. 25
ARTICLE IX - Termination
IX. A. Termination. 25
IX. B. Failure to Designate Successor Trustee. 26
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 27
XI. B. Limitation of Personal Liability. 27
XI. C. Authorization By Board. 28
XI. D. Custodian's Consent to Use of Its Name. 28
XI. E. Notices to Custodian. 29
XI. F. Notices to Trust. 29
XI. G. Amendments In Writing. 29
XI. H. Successors and Assigns. 29
XI. I. Governing Law. 29
XI. J. Jurisdiction. 30
XI. K. Counterparts. 30
XI. L. Headings. 30
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the _____ day of
__________, 1998, by and between The Xxxxxxx Trust, an Ohio business trust (the
"Trust") and Star Bank, National Association, (the "Custodian"), a national
banking association having its principal office at 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx, 00000.
WHEREAS, the Trust and the Custodian desire to enter into this Agreement
to provide for the custody and safekeeping of the assets of the Trust as
required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Trust and the Custodian agree as follows:
Definitions
The following words and phrases, when used in this Agreement, unless the
context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended.
1934 Act - the Securities and Exchange Act of 1934, as amended.
Authorized Person - any person, whether or not any such person is an
officer or employee of the Trust, who is duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and as
amended from time to time by resolution of the Board of Trustees, certified by
an Officer, and received by the Custodian.
Board of Trustees - the Trustees from time to time serving under the
Trust's Agreement and Declaration of Trust, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart O
of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFT Part 350, or in
such book-entry regulations of federal agencies as are substantially in the form
of Subpart O.
Business Day - 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 any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose trust
company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of 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 provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent appointed,
from time to time, pursuant to a written agreement between the dividend and
transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside of
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any additional
series added pursuant to Proper Instructions. A series is individually referred
to as a "Fund" and collectively referred to as the "Funds."
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and received by the
Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Trust's then currently effective prospectus and Statement
of Additional Information, as filed with and declared effective from time to
time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock, preferred
stock, options, financial futures, bonds, notes, debentures, corporate debt
securities, mortgages, 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 interest therein, or any similar property or assets, including
securities of any registered investment company, that the Custodian has the
facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United States of
America.
Shares - with respect to a Fund, the units of beneficial interest issued
by the Trust on account of such Fund.
Trust - the business trust organized under the laws of Ohio which is an
open-end diversified management investment company registered under the Act.
Written Instructions - communications in writing actually received by the
Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Mutual Fund Custody Department.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Trust at any time during the term of this Agreement.
II. B. Acceptance of Custodian. The Custodian hereby accepts
appointment as such custodian and agrees to perform the duties thereof as
hereinafter set forth.
II. C. 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:
1. A copy of the Declaration of Trust of the
Trust certified by the Secretary.
2. A copy of the By-Laws of the Trust certified
by the Secretary.
3. A copy of the resolution of the Board of
Trustees of the Trust appointing the Custodian, certified by
the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary
of the Trust setting forth the names and signatures of all
Authorized Persons.
II. D. 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.
ARTICLE III
Receipt of Trust Assets
III. A. Delivery of Moneys. During the term of this Agreement, the
Trust will deliver or cause to be delivered to the Custodian all moneys to
be held by the Custodian for the account of any Fund. The Custodian shall
be entitled to reverse any deposits made on any Fund's behalf where such
deposits have been entered and moneys are not finally collected within 30
days of the making of such entry.
III. B. Delivery of Securities. During the term of this Agreement,
the Trust will deliver or cause to be delivered to the Custodian all
Securities to be held by the Custodian for the account of any Fund. The
Custodian will not have any duties or responsibilities with respect to such
Securities until actually received by the Custodian. The Custodian is
hereby authorized by the Trust, acting on behalf of the Fund, to actually
deposit any assets of the Fund in the Book-Entry System or in a Depository,
provided, however, that the Custodian shall always be accountable to the
Trust for the assets of the Fund so deposited. Assets deposited in the
Book-Entry System or the Depository will be represented in accounts which
include only assets held by the Custodian for customers, including but not
limited to accounts in which the Custodian acts in a fiduciary or
representative capacity.
III. C. Payments for Shares. As and when received, the Custodian
shall deposit to the account(s) of a Fund any and all payments for Shares of
that Fund issued or sold from time to time as they are received from the
Trust's distributor or Dividend and Transfer Agent or from the Trust itself.
III. D. Duties Upon Receipt. The Custodian shall not be responsible
for any Securities, moneys or other assets of any Fund until actually
received.
ARTICLE IV
Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. The Trust shall furnish to
the Custodian a copy of the resolution of the Board of Trustees of the
Trust, certified by the Trust's Secretary, either (i) setting forth the date
of the declaration of any dividend or distribution in respect of Shares of
any Fund of the Trust, the date of payment thereof, the record date as of
which the Fund shareholders entitled to payment shall be determined, the
amount payable per share to Fund shareholders of record as of that date, and
the total amount to be paid by the Dividend and Transfer Agent on the
payment date, or (ii) authorizing the declaration of dividends and
distributions in respect of Shares of a Fund on a daily basis and
authorizing the Custodian to rely on Written Instructions setting forth the
date of the declaration of any such dividend or distribution, the date of
payment thereof, the record date as of which the Fund shareholders entitled
to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by
the Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held
for the account of the Fund so that they are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon receipt of Proper
Instructions so directing it, the Custodian shall segregate amounts
necessary for the payment of redemption proceeds to be made by the Dividend
and Transfer Agent from moneys held for the account of the Fund so that they
are available for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a Certificate
directing payment and setting forth the name and address of the person to
whom such payment is to be made, the amount of such payment, the name of the
Fund from which payment is to be made, and the purpose for which payment is
to be made, the Custodian shall disburse amounts as and when directed from
the assets of that Fund. The Custodian is authorized to rely on such
directions and shall be under no obligation to inquire as to the propriety
of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written
Instructions directing payment, the Custodian shall disburse moneys from the
assets of the Trust in payment of the Custodian's fees and expenses as
provided in Article VIII hereof.
ARTICLE V
Custody of Trust Assets
V. A. Separate Accounts for Each Fund. As to each Fund, the
Custodian shall open and maintain a separate bank account or accounts in the
United States in the name of the Trust coupled with the name of such Fund,
subject only to draft or order by the Custodian acting pursuant to the terms
of this Agreement, and shall hold 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 by the Fund in accordance with Rule 17f-3 under
the Act. Moneys held by the Custodian on behalf of a Fund may be deposited
by the Custodian to its credit as Custodian in the banking department of the
Custodian. Such moneys shall be deposited by the Custodian in its capacity
as such, and shall be withdrawable by the Custodian only in such capacity.
V. B. Segregation of Non-Cash Assets. All Securities and non-cash
property held by the Custodian for the account of a Fund (other than
Securities maintained in a Depository or Book-entry System) shall be
physically segregated from other Securities and non-cash property in the
possession of the Custodian (including the Securities and non-cash property
of the other Funds) and shall be identified as subject to this Agreement.
V. C. Securities in Bearer and Registered Form. All Securities
held which are issued or issuable only in bearer form, shall be held by the
Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Custodian, any sub-custodian appointed in
accordance with this Agreement, or the nominee of any of them. The Trust
agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold, or deliver in proper form for transfer, any Securities
that it may hold for the account of any Fund and which may, from time to
time, be registered in the name of a Fund.
V. D. Duties of Custodian as to Securities. Unless otherwise
instructed by the Trust, with respect to all Securities held for the Trust,
the Custodian shall on a timely basis (concerning items 1 and 2 below, as
defined in the Custodian's Standards of Service Guide, as amended from time
to time, annexed hereto as Appendix D):
1.) Collect all income due and payable with
respect to such Securities;
2.) Present for payment and collect amounts
payable upon all Securities which may mature or be called,
redeemed, or retired, or otherwise become payable;
3.) Surrender interim receipts or Securities in
temporary form for Securities in definitive form; and
4.) 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, including any foreign taxing authority, now
or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon receipt of a
Written Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as may be
designated in such Written Instructions proxies, consents,
authorizations, and any other instruments whereby the
authority of the Trust as beneficial owner of any Securities
may be exercised;
2.) Deliver any Securities in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger,
consolidation, or recapitalization of any corporation, or the
exercise of any conversion privilege;
3.) Deliver any Securities to any protective
committee, reorganization committee, or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization, or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery;
4.) Make such transfers or exchanges of the assets
of any Fund and take such other steps as shall be stated in
the Written Instructions to be for the purpose of
effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust; and
5.) Deliver any Securities held for any Fund to
the depository agent for tender or other similar offers.
V. F. Custodian to Deliver Proxy Materials. The Custodian shall
promptly deliver to the Trust all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any
Securities or give any consent, waiver or approval with respect thereto
unless so directed by Written Instructions.
V. G. Custodian to Deliver Tender Offer Information. The Custodian
shall promptly deliver to the Trust all information received by the
Custodian and pertaining to Securities held by any Fund with respect to
tender or exchange offers, calls for redemption or purchase, or expiration
of rights as described in the Standards of Service Guide attached as
Appendix D. 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.
V. H. Custodian to Deliver Security and Transaction Information.
On each Business Day that the Federal Reserve Bank is open, the Custodian
shall furnish the Trust with a detailed statement of monies held for the
Fund under this Agreement and with confirmations and a summary of all
transfers to or from the account of the Fund. At least monthly and from
time to time, the Custodian shall furnish the Trust with a detailed
statement of the Securities held for the Fund under this Agreement. Where
Securities are transferred to the account of the Fund without physical
delivery, the Custodian shall also identify as belonging to the Fund a
quantity of Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the Custodian's account
on the books of the Book-Entry System or the Depository. With respect to
information provided by this section, it shall not be necessary for the
Custodian to provide notice as described by Article XI Section F. Notices to
Trust; it shall be sufficient to communicate by such means as shall be
mutually agreeable to the Trust and the Custodian.
ARTICLE VI
Purchase and Sale of Securities
VI. A. Purchase of Securities. Promptly after each purchase of
Securities by the Trust, the Trust shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money Market
Securities, Written Instructions, and (ii) with respect to each purchase of
Money Market Securities, Proper Instructions, specifying with respect to
each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and accrued
interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through which,
the purchase was made,
7.) the name of the person to whom such amount is payable, and
8.) the Fund for which the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable, to the person named therein. The Custodian shall not be under
any obligation to pay out moneys to cover the cost of a purchase of
Securities for a Fund, if in the relevant Fund custody account there is
insufficient cash available to the Fund for which such purchase was made.
With respect to any repurchase agreement transaction for the Funds, the
Custodian shall assure that the collateral reflected on the transaction
advice is received by the Custodian.
VI. B. Sale of Securities. Promptly after each sale of Securities
by a Fund, the Trust shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, Written
Instructions, and (ii) with respect to each sale of Money Market Securities,
Proper Instructions, specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued interest,
if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which,
the sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made.
The Custodian shall deliver the Securities against receipt of the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable.
VI. C. Delivery Versus Payment for Purchases and Sales. Purchases
and sales of Securities effected by the Custodian will be made on a delivery
versus payment basis. The Custodian may, in its sole discretion, upon
receipt of Written Instructions, elect to settle a purchase or sale
transaction in some other manner, but only upon receipt of acceptable
indemnification from the Fund.
VI. D. Payment on Settlement Date. On contractual settlement date,
the account of the Fund will be charged for all purchased Securities
settling on that day, regardless of whether or not delivery is made.
Likewise, on contractual settlement date, proceeds from the sale of
Securities settling that day will be credited to the account of the Fund,
irrespective of delivery.
VI. E. Segregated Accounts. The Custodian shall, upon receipt of
Proper Instructions so directing it, establish and maintain a segregated
account or accounts for and on behalf of a Fund. Cash and/or Securities may
be transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any
agreement among the Trust, the Custodian, and a broker-dealer
registered under the 1934 Act, and also 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, the Commodity
Futures Trading Commission, any registered contract market,
or any similar organization or organizations requiring escrow
or other similar arrangements in connection with transactions
by the Fund;
2.) for purposes of segregating cash or Securities
in connection with options purchased, sold, or written by the
Fund or commodity futures contracts or options thereon
purchased or sold by the Fund;
3.) for the purpose of compliance by the Fund with
the procedures required for reverse repurchase agreements,
firm commitment agreements, standby commitment agreements,
short sales, or any other securities by Act Release No.
10666, or any subsequent release or releases or rule of the
SEC relating to the maintenance of segregated accounts by
registered investment companies;
4.) for the purpose of segregating collateral for
loans of Securities made by the Fund; and
5.) for other proper corporate purposes, but only
upon receipt of, in addition to Proper Instructions, a copy
of a resolution of the Board of Trustees, certified by an
Officer, setting forth the purposes of such segregated
account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
VI. F. Advances for Settlement. Except as otherwise may be agreed
upon by the parties hereto, the Custodian shall not be required to comply
with any Written Instructions to settle the purchase of any Securities on
behalf of a Fund unless there is sufficient cash in the account(s)
pertaining to such Fund at the time or to settle the sale of any Securities
from such an account(s) unless such Securities are in deliverable form.
Notwithstanding the foregoing, if the purchase price of such Securities
exceeds the amount of cash in the account(s) at the time of such purchase,
the Custodian may, in its sole discretion, advance the amount of the
difference in order to settle the purchase of such Securities. The amount
of any such advance shall be deemed a loan from the Custodian to the Trust
payable on demand and bearing interest accruing from the date such loan is
made up to but not including the date such loan is repaid at the rate per
annum customarily charged by the Custodian on similar loans.
ARTICLE VII
Trust Indebtedness
VII. A. Borrowings. In connection with any borrowings by the Trust,
the Trust will cause to be delivered to the Custodian by a bank or broker
requiring Securities as collateral for such borrowings (including the
Custodian if the borrowing is from the Custodian), a notice or undertaking
in the form currently employed by such bank or broker setting forth the
amount of collateral. The Trust shall promptly deliver to the Custodian
Written Instructions specifying with respect to each such borrowing: (a) the
name of the bank or broker, (b) the amount and terms of the borrowing, which
may be set forth by incorporating by reference an attached promissory note
duly endorsed by the Trust, or a loan agreement, (c) the date, and time if
known, on which the loan is to be entered into, (d) the date on which the
loan becomes due and payable, (e) the total amount payable to the Trust on
the borrowing date, and (f) the description of the Securities securing the
loan, including the name of the issuer, the title and the number of shares
or other units or the principal amount. The Custodian shall deliver on the
borrowing date specified in the Written Instructions the required collateral
against the lender's delivery of the total loan amount then payable,
provided that the same conforms to that which is described in the Written
Instructions. The Custodian shall deliver, in the manner directed by the
Trust, such Securities as additional collateral, as may be specified in
Written Instructions, to secure further any transaction described in this
Article VII. The Trust shall cause all Securities released from collateral
status to be returned directly to the Custodian and the Custodian shall
receive from time to time such return of collateral as may be tendered to
it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of
the loan. The Custodian may require such reasonable conditions regarding
such collateral and its dealings with third-party lenders as it may deem
appropriate.
VII. B. Advances. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in
the Fund incurring an overdraft at the end of any Business Day, such advance
shall be repayable immediately upon demand made by the Custodian at any
time.
ARTICLE VIII
Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. Except as otherwise
provided herein, the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its negligence
or willful misconduct. The Trust, on behalf of the Fund and only from
assets of the Fund (or insurance purchased by the Trust with respect to its
liabilities on behalf of the Fund hereunder), shall defend, indemnify and
hold harmless the Custodian and its directors, officers, employees and
agents with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising or alleged to arise from or relating to
the Trust's duties hereunder or any other action or inaction of the Trust or
its Trustees, officers, employees or agents, except such as may arise from
the negligent action, omission, willful misconduct or breach of this
Agreement by the Custodian, its directors, officers, employees or agents..
The Custodian shall defend, indemnify and hold harmless the Trust and its
trustees, officers, employees or agents with respect to any loss, claim,
liability or cost (including reasonable attorneys' fees) arising or alleged
to arise from or relating to the Custodian's duties as specifically set
forth in this agreement with respect to the Fund hereunder or any other
action or inaction of the Custodian or its directors, officers, employees,
agents, nominees, or Sub-Custodians as to the Fund, except such as may arise
from the negligent action, omission or willful misconduct of the Trust, its
trustees, officers, employees, or agents. The Custodian may, with respect
to questions of law apply for and obtain the advice and opinion of counsel
to the Trust at the expense of the Fund, or of its own counsel at its own
expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with the advice or opinion of
counsel to the Trust, and shall be similarly protected with respect to
anything done or omitted by it in good faith in conformity with advice or
opinion of its counsel, unless counsel to the Fund shall, within a
reasonable time after being notified of legal advice received by the
Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees, agents, nominees or Sub-Custodians, but
not for any special, incidental, consequential, or punitive damages;
provided, however, that nothing contained herein shall preclude recovery by
the Trust, on behalf of the Fund, of principal and of interest to the date
of recovery on Securities incorrectly omitted from the Fund's account or
penalties imposed on the Trust, in connection with the Fund, for any
failures to deliver Securities. In any case in which one party hereto may
be asked to indemnify the other or hold the other harmless, the party from
whom indemnification is sought (the "Indemnifying Party") shall be advised
of all pertinent facts concerning the situation in question, and the party
claiming a right to indemnification (the "Indemnified Party") will use
reasonable care to identify and notify the Indemnifying Party promptly
concerning any situation which presents or appears to present a claim for
indemnification against the Indemnifying Party. The Indemnifying Party
shall have the option to defend the Indemnified Party against any claim
which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel
chosen by the Indemnifying Party and satisfactory to the Indemnified Party
and the Indemnifying Party will so notify the Indemnified Party and
thereupon such Indemnifying Party shall take over the complete defense of
the claim and the Indemnifying Party shall sustain no further legal or other
expenses in such situation for which indemnification has been sought under
this paragraph, except the expenses of any additional counsel retained by
the Indemnified Party. In no case shall any party claiming the right to
indemnification confess any claim or make any compromise in any case in
which the other party has been asked to indemnify such party (unless such
confession or compromise is made with such other party's prior written
consent. The provisions of this section VIII. A. shall survive the
termination of this Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the
generality of the foregoing, the Custodian, acting in the capacity of
Custodian hereunder, shall be under no obligation to inquire into, and shall
not be liable for:
1.) The validity of the issue of any Securities
purchased by or for the account of any Fund, the legality of
the purchase thereof, or the propriety of the amount paid
therefor;
2.) The legality of the sale of any Securities by
or for the account of any Fund, or the propriety of the
amount for which the same are sold;
3.) The legality of the issue or sale of any
Shares of any Fund, or the sufficiency of the amount to be
received therefor;
4.) The legality of the redemption of any Shares
of any Fund, or the propriety of the amount to be paid
therefor;
5.) The legality of the declaration or payment of
any dividend by the Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on
behalf of the Trust or any Fund, using Securities as
collateral;
7.) 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.
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer
Agent. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Trust from any Dividend
and Transfer Agent of the Trust nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Trust of any amount
paid by the Custodian to any Dividend and Transfer Agent of the Trust in
accordance with this Agreement.
VIII. D. No Enforcement Actions. Notwithstanding Section D of Article
V, the Custodian shall not be under any duty or obligation to take action,
by legal means or otherwise, to effect collection of any amount, if the
Securities upon which such amount is payable are in default, or if payment
is refused after due demand or presentation, unless and until (i) it shall
be directed to take such action by Written Instructions and (ii) it shall be
assured to its satisfaction (including prepayment thereof) of reimbursement
of its costs and expenses in connection with any such action.
VIII. E. Authority to Use Agents and Sub-Custodians. The Trust
acknowledges and hereby authorizes the Custodian to hold Securities through
its various agents described in Appendix C annexed hereto. In addition, the
Trust acknowledges that the Custodian may appoint one or more financial
institutions, as agent or agents or as sub-custodian or sub-custodians,
including, but not limited to, banking institutions located in foreign
countries, for the purpose of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or
activities of such agents or sub-custodians. Any such agent or
sub-custodian shall be qualified to serve as such for assets of investment
companies registered under the Act. The Funds shall reimburse the Custodian
for all costs incurred by the Custodian in connection with opening accounts
with any such agents or sub-custodians. Upon request, the Custodian shall
promptly forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist trustees of registered
investment companies to fulfill their responsibilities under Rule 17f-5 of
the Act.
VIII. F. No Duty to Supervise Investments. The Custodian shall not be
under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Trust are such as properly
may be held by the Trust under the provisions of the Declaration of Trust
and the Trust's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat all
records and other information relating to the Trust and the assets of all
Funds as confidential and shall not disclose any such records or information
to any other person unless (i) the Trust shall have consented thereto in
writing or (ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled
to receive and the Trust agrees to pay to the Custodian, for the Fund's
account from the Fund's assets only, such compensation as shall be
determined pursuant to Appendix E attached hereto, or as shall be determined
pursuant to amendments to Appendix E as approved by the Custodian and the
Trust. The Custodian shall be entitled to charge against any money held
by it for the accounts of the Fund the amount of any loss, damage, liability
or expense, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement as determined by
agreement of the Custodian and the Trust or by the final order of any court
or arbitrator having jurisdiction and as to which all rights of appeal shall
have expired. The expenses which the Custodian may charge against the
account of a Fund include, but are not limited to, the expenses of agents or
Sub-Custodians incurred in settling transactions involving the purchase and
sale of Securities of the Fund.
VIII. I. Reliance Upon Instructions. The Custodian shall be entitled
to rely upon any Proper Instructions if such reliance is made in good faith.
The Trust agrees to forward to the Custodian Written Instructions confirming
Oral Instructions in such a manner so that such Written Instructions are
received by the Custodian, whether by hand delivery, telex, facsimile or
otherwise, on the same Business Day on which such Oral Instructions were
given. The Trust agrees that the failure of the Custodian to receive such
confirming instructions shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by the
Trust. The Trust agrees that the Custodian shall incur no liability to the
Trust for acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions.
VIII. J. Books and Records. The Custodian will (i) set up and
maintain proper books of account and complete records of all transactions in
the accounts maintained by the Custodian hereunder in such manner as will
meet the obligations of the Fund under the Act, with particular attention to
Section 31 thereof and Rules 3la-1 and 3la-2 thereunder and those records
are the property of the Trust, and (ii) preserve for the periods prescribed
by applicable Federal statute or regulation all records required to be so
preserved. All such books and records shall be the property of the Trust,
and shall be available, upon request, for inspection by duly authorized
officers, employees or agents of the Trust and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian shall
send to the Trust any report received on the systems of internal accounting
control of the Custodian, or its agents or sub-custodians, as the Trust may
reasonably request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian performs
only the services of a custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities or other assets
from time to time owned by any Fund. The Custodian is not a selling agent
for Shares of any Fund and performance of its duties as custodian shall not
be deemed to be a recommendation to any Fund's depositors or others of
Shares of the Fund as an investment. 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.
VIII. M. Assistance to Trust. The Custodian shall take all reasonable
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust's independent accountants, with
respect to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N- IA, Form N-SAR, or other annual reports to
the SEC.
ARTICLE IX
Termination
IX. A. Termination. Either party hereto may terminate this Agreement
for any reason by giving to the other party a notice in writing specifying
the date of such termination, which shall be not less than ninety (90) days
after the date of giving of such notice. If such notice is given by the
Trust, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary of the Trust, electing to
terminate this Agreement and designating a successor custodian or custodians
each of which shall be a bank or trust company having not less than
$100,000,000 aggregate capital, surplus, and undivided profits. In the
event such notice is given by the Custodian, the Trust shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of the
Board of Trustees of the Trust, certified by the Secretary, designating a
successor custodian or custodians to act on behalf of the Trust. In the
absence of such designation by the Trust, the Custodian may designate a
successor custodian which shall be a bank or trust company having not less
than $100,000,000 aggregate capital, surplus, and undivided profits. Upon
the date set forth in such notice this Agreement shall terminate, and the
Custodian, provided that it has received a notice of acceptance by the
successor custodian, shall deliver, on that date, directly to the successor
custodian all Securities and monies then owned by the Fund and held by it as
Custodian. Upon termination of this Agreement, the Trust shall pay to the
Custodian on behalf of the Trust such compensation as may be due as of the
date of such termination. The Trust agrees on behalf of the Trust that the
Custodian shall be reimbursed for its reasonable costs in connection with
the termination of this Agreement.
IX. B. Failure to Designate Successor Trustee. If a successor
custodian is not designated by the Trust, or by the Custodian in accordance
with the preceding paragraph, or the designated successor cannot or will not
serve, the Trust shall, upon the delivery by the Custodian to the Trust of
all Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Trust) and moneys then owned by the Trust, be
deemed to be the custodian for the Trust, and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the Book-Entry
System, which cannot be delivered to the Trust, which shall be held by the
Custodian in accordance with this Agreement.
ARTICLE X
Force Majeure
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires;
floods; wars; civil or military disturbances; sabotage; strikes; epidemics;
riots; 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, shall use its best efforts to ameliorate the effects of
any such failure or delay.
ARTICLE XI
Miscellaneous
XI. A. Designation of Authorized Persons. Appendix A sets forth the
names and the signatures of all Authorized Persons as of this date, as
certified by the Secretary of the Trust. The Trust agrees to furnish to the
Custodian a new Appendix A in form similar to the attached Appendix A, if
any present Authorized Person ceases to be an Authorized Person or if any
other or additional Authorized Persons are elected or appointed. Until such
new Appendix A shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the then current Authorized Persons as set forth in the last
delivered Appendix A.
XI. B. Limitation of Personal Liability. No recourse under any
obligation of this Agreement or for any claim based thereon shall be had
against any organizer, shareholder, officer, trustee, past, present or
future as such, of the Trust or of any predecessor or successor, either
directly or through the Trust or any such predecessor or successor, whether
by virtue of any constitution, statute or rule of law or equity, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
agreed and understood that this Agreement and the obligations thereunder are
enforceable solely against the assets of the Trust, and that no such
personal liability whatever shall attach to, or is or shall be incurred by,
the organizers, shareholders, officers, or trustees of the Trust or of any
predecessor or successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
XI. C. Authorization By Board. The obligations set forth in this
Agreement as having been made by the Trust have been made by the Board of
Trustees, acting as such Trustees for and on behalf of the Trust, pursuant
to the authority vested in them under the laws of the State of Ohio, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees,
Officers, agents or holders of shares, personally, but bind only the Trust
and then only to the extent of the assets of the Trust.
XI. D. Custodian's Consent to Use of Its Name. The Trust shall obtain
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including
advertising material) specifically mentioning the Custodian (other than
merely by name and address).
XI. E. Notices to Custodian. Any notice or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the Custodian and
mailed or delivered to it at its offices at Star Bank Center, 000 Xxxxxx
Xxxxxx, X. X. 0000, Xxxxxxxxxx, Xxxx 00000, attention Mutual Fund Custody
Department, or at such other place as the Custodian may from time to time
designate in writing.
XI. F. Notices to Trust. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid
and addressed to the Trust at its office at 00000 Xxxx Xxxxxxx, Xxxxx Xxxxx,
Xxxx 00000 or at such other place as the Trust may from time to time
designate in writing.
XI. G. Amendments In Writing. This Agreement, with the exception of
the Appendices, may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of
Trustees of the Trust.
XI. H. Successors and Assigns. This Agreement shall extend to and
shall be binding upon the parties hereto, and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable
by the Trust or by the Custodian, and no attempted assignment by the Trust
or the Custodian shall be effective without the written consent of the other
party hereto.
XI. I. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
XI. J. Jurisdiction. Any legal action, suit or proceeding to be
instituted by either party with respect to this Agreement shall be brought
by such party exclusively in the courts of the State of Ohio or in the
courts of the United States for the Southern District of Ohio, and each
party, by its execution of this Agreement, irrevocably (i) submits to such
jurisdiction and (ii) consents to the service of any process or pleadings by
first class U.S. mail, postage prepaid and return receipt requested, or by
any other means from time to time authorized by the laws of such
jurisdiction.
XI. K. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XI. L. Headings. The headings of paragraphs 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, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the
day and year first above written.
WITNESS: TRUST:
The Xxxxxxx Trust
Xxxxxx Xxxxxxx ___________ By: Ramesh Jhaveri_____________
Title: President___________
WITNESS: CUSTODIAN:
Star Bank, N.A.
Xxxx Dowling________________ By: Xxxxx Xxxxx ____________
Title: Vice President___________
